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1. Is the Euro up for Grabs? Evidence from a Survey Experiment

Author:
Lucio Baccaro, Bjorn Bremer, and Erik Neimanns
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The COVID-19 pandemic may lead to a resurgence of the euro crisis. In this context, Italy seems particularly vulnerable: support for the euro is lower than in most other eurozone countries, and a possible exit could have serious consequences for the common currency. Based on a novel survey experiment, this paper shows that the pro-euro coalition is fragile in Italy and preferences are malleable. They are heavily dependent on the perceived costs of continued membership, as a majority of Italians would opt for Italexit rather than accepting a bailout plan requiring the implementation of austerity policies. Individuals who feel they have not benefited from the euro are most likely to support exit when faced with the prospect of austerity. This suggests that, differently from Greece, where voters were determined to remain in the euro at all costs, the pro-euro coalition may crumble if Italy is exposed to harsh conditionality.
Topic:
Public Opinion, Crisis Management, Voting, Survey, COVID-19, and Euro
Political Geography:
Europe and Italy

2. Has the “External Constraint” Contributed to Italy’s Stagnation? A Critical Event Analysis

Author:
Lucio Baccaro and Massimo D'Antoni
Publication Date:
07-2020
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Has the strategy of the “external constraint” (voluntarily limiting the country’s policy-making discretion by tying it to the European mast) contributed to Italy’s stagnation over the past twenty-five years? The existing literature is divided on this question. The dominant interpretation is that Italy’s stagnation is due to insufficient liberalization, and that the external constraint has had no negative and even a positive influence. An alternative interpretation emphasizes the demand compression and supply-side effects of the external constraint. Based on three case studies of public debt management, privatization, and labor market policy, this paper reconstructs the process by which the external constraint has affected outcomes. It argues that it has had a negative impact, but more as a necessary condition than as a sufficient one. In other words, it would probably have been possible to manage the external constraint differently to produce better outcomes, but without the external constraint, the stagnation would likely have been less deep.
Topic:
Economics, Political Economy, and Euro
Political Geography:
Italy and North America