Bitcoin Around the World: Italy
LONDON (InsideBitcoins) – All roads lead to Rome. Or so they used to say. Italy has often been the odd man out in Europe. The third largest economy in the Eurozone, it also ranks 8th in the world in terms of nominal GDP; a highly developed economy by any standards, it is often to the surprise and dismay of its euro partners that Italian politics are a mess.
A country cursed by creative accounting
It’s easy to point a finger at outgoing President Berlusconi but in fact the real crisis in politics reached a peak in 2011 as the ramifications of the sovereign debt woes hit the peninsula with hurricane-level force. The Maastricht treaty of 1992 had, amongst other things, been designed to place limits on the amount of deficit spending governments within the union could partake in. No nation actuallybroke these agreements but a combination of creative accounting, off balance transactions and the securitization of future government revenues led to a direct, deliberate obfuscation of what was really occurring.
And no nation was being more creative than Italy. By 2010 its sovereign debt was at 127% of GDP making it the third worst in the world on this measure; only the disastrous economies of Japan and Greece ranked lower. In 2011 Berlusconi’s center right government rushed no fewer than three bills through parliament in a vain attempt to stem hemorrhaging balance sheets by curbing public expenditures. It was too little too late. Berlusconi, beset from all sides by allegations of felonies ranging from fraud to sexual improprieties, lost his parliamentary majority, resigned and took democracy with him.
This post was published at Inside Bitcoins on Feb 23, 2015.