BTP-Bund Spread and Crash Probability

The rise in the  likelihood of a disorderly dissolution (“crash”) of the Parliament , that I estimate to have risen from 0.52 to 0.65 since Friday last week following PdL ministers and MPs threat of resignations, is already affecting the BTP-Bund spread (today the spread opened around 290bp). If we assume that probability of an […]

The Consensus for The Letta Government Is Crumbling

The consensus for the Letta government is crumbling. Political shocks are adding to paralysis and economic stagnation. Shocks On July 30th the Supreme Court (Corte di Cassazione) will have the last say on Berlusconi’s recourse against the Appeal Court which sentenced the ex Prime Minister to four years in prison and to a five/three years […]

The Monti Legacy

Today I gave a talk at the Conference RENCONTRES ECONOMIQUES 2012 “L’ajustement des déséquilibres en zone euro” at the Ministry of Finance in Paris. I discussed the legacy of the Monti government, the positive and negative aspects of the economic reforms,  and some implications of the current governmernt crisis. I was very surprised to see […]

Mario Monti, the Politician

President Napolitano today appointed Mario Monti, the President of Bocconi University and Ex European Commisioner, to the honor of Life Senator. It was a shrewd political move. As of today, Mr Monti is no longer a “technocrat”, representing the “masonic and “plutocratic” vested interests of “financiers”. He is a Senator of the Republic (albeit a […]