Matteo Renzi has a heretical idea. The new leader of Italy’s centre-left grouping and the likely next prime minister, has suggested Rome could break the euro zone’s fiscal rules with a higher fiscal deficit.
The limit of 3 per cent of GDP has been sacrosanct. The country only just brought its deficit below the bar in 2012 after a brutal austerity drive. The result is fiscal credibility, helping Italy borrow at similar rates to less-indebted Spain.