Many 'Experts' agree that leaving the Euro would have catastrophic consequences for a country like Italy. In particular, (foreign) debts would explode bankrupting the state, banks and companies with debts denominated in Euros.
But a simple solution is overlooked - Italy, or any other country - could simply re denominate these debts as it can do it with any internal debts. There would be an outcry but extreme situations call for extreme solutions.
And anyone who arranges his financial affairs in a way so as not to take this possibility into account can only blame himself. Quite a few years ago - and before the Financial Crash - we said that a narrow spread of BTP to Bunds of just 15 bp or so was not viable and any investor was foolish to hold on to the Italian paper.
So you have been warned!
The New Deal’s False Promise
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[ Note: This article was originally published on March 10, 2025 by Scott
Sumner at his substack under the title “False Dawn: George Selgin on the
New De...
3 hours ago