Italy's Renzi must bring back the lira to end depression

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It is an incontrovertible fact that Italy's 14-year disaster coincides with EMU membership. This does not prove causality. It suggests that EMU set off a very destructive dynamic for Italy's particular circumstances, and is strong evidence that EMU now prevents the country from breaking out of the trap... a damning report [shows] how Italy's productivity growth and competitiveness faltered each time it pegged its currency to Germany over the past 40 years. It roared back with each devaluation.

... The country does not suffer from excess debt in any fundamental sense. Mortgage debt is very low. Aggregate debt is around 270pc of GDP, much lower than France, Britain, Spain, Japan, the US, Sweden or the Netherlands. The root problem is an exchange rate misalignment that creates an unnecessary public debt crisis through the perverse mechanisms of EMU.