Date of Award
The COVID-19 pandemic in Italy is the latest event following the 2010 European sovereign debt crisis and the 2015 European migrant crisis to expose the limitations of the euro. While the worst of the COVID-19 pandemic is over in Italy, the Italian economy faces a new dilemma. Italy finds itself in a potential deadlock as other countries outside and inside the Economic and Monetary Union (EMU) are able to mitigate the impact of the pandemic through greater fiscal relief measures. Therefore, the fate of Italy’s economic woes lies in the hands of the European Central Bank (ECB) and the Economic Commission. The difficulty, however, is that the EMU and its governing institutions not only are predicated on neoclassical economics that strips away vital monetary and fiscal policy space for member states during a crisis but also lacks an autonomous fiscal policy mechanism on the supranational level that can act decisively in a health crisis which asymmetrically affects Eurozone countries. Provided an appropriate policy response from the ECB and European Commission, everything would be alright in Italy, or as they say, “Andrà tutto bene.”
Johnsson, Madeleine, "The Limitations of the Euro: A Case Study of the COVID-19 Pandemic in Italy" (2020). Theses - Graduate Programs in Economic Theory and Policy. 28.