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Europe's Slow-Motion Crisis
The Fat Lady Sings for Italy?

The Rome Opera House was paying its orchestra and chorus “16 months” per year to work a 28-hour week—and that was before you got into the really ludicrous union rules. So earlier this month, after months of fighting with the union, its board simply fired them all.

Because Italy writ large will not do the same, Nicholas Farrell writes in the Spectator, it “is doomed”:

Italy can’t blame all its problems on monetary union, however. The euro did not cause the catastrophe, but it deprived Italy of a means to combat it and exposed its fatal structural weaknesses.

The youth unemployment rate here is 43 per cent — the highest on record. That figure doesn’t factor in the black market, which is so big that the Italian government now wants to include certain parts of it — prostitution, drug dealing and assorted smuggling — into its official GDP figures. The contribution is thought to be sizeable enough to take the country out of its third recession in six years.

We should remember that Italian companies get state money to pay workers to do nothing and not sack them — currently about half a million workers are in what is known as ‘cassa integrazione’. So the real unemployment rate in Italy must be at least 15 per cent, and that does not include all those who have given up trying to find work. Just 58 per cent of working-age Italians are employed, compared with an average 65 per cent in the developed world.

Italy is the world’s 8th-largest economy, and the geopolitical consequences of its problems may prove to be significant. For an entertaining last look at a great and cultured country’s bitter decline, read the whole thing.

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  • George Armstrong Custer

    Wrong opera tradition. There are no fat ladies in Italian opera – that’s Wagner. Mimi and Violetta (Puccini and Verdi), the quintessential Italian opera heroines, are thin, sickly and die from tuberculosis.

  • Pete

    One of the things that is depressing wages in the U.S. is that, due to globalization, there are now hundreds of millions more workers in the world from China, India, Brazil, etc. which our labor has to compete against.

    And if that hurts the U.S. workforce, imagine the effect this new competition will have on the lazy Europeans, especially the southern European countries whose culture is lackadaisical and soft. It is problematic if countries like Italy, Spain, Greece, and perhaps even France will ever pull out of their downward trajectory.

    • Tom

      Their cultures aren’t lackadaisical and soft so much as they are extremely hardcore about all of the wrong things to be hardcore about once you get to an industrial economy.

  • Jacksonian_Libertarian

    The Big Government welfare states of Europe are all going down, Greece, Spain, Italy, etc… are just going first as they’re the weakest and most dysfunctional. The Europeans seem to have lost sight of the fact that the Government Monopoly doesn’t create wealth it consumes it. As the burden of the Government Monopoly on the wealth creating free market grows beyond the ability of the free market to support, bankruptcy and decline are the inevitable result.

  • Corlyss

    “The euro did not cause the catastrophe, but it deprived Italy of a means to combat it and exposed its fatal structural weaknesses.”

    I say dump the silly euro and bring back Italy’s means to combat the catastrophe and the fatal structural weaknesses. That way the financial market can deal with Italy appropriately and stop having to waste time and money going thru the bloody 52 legged committee that only delays the inevitable.

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