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The eurozone is having an identity crisis and Italy will bear the brunt

Rather than rethink their busted economic model, European leaders will drive Italy into an unmanageable situation

By Ashoka Mody  

Matteo Salvini, Italian Deputy PM. Photo: NurPhoto NurPhoto/SIPA USA/PA Images

We may be living through the making of another eurozone crisis. As with all crises, there are two central elements: the history and the tragedy itself.

The history is clear. The eurozone was an ill-conceived project from the start: for a motley group of countries, one monetary policy was a case of one-size-fits none. In particular, Italy needed the crutch of continuous currency devaluation, which became impossible once it gave up the lira. Italy is now stuck with ultra-low…

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