I would except that view in relation to Greece - it should never have been allowed to join the Euro. There was and is a lack of economic development and integration which means it was never part of an EZ optimal common currency area.

However I see less justification for that view in relation to Italy. It needs to be trading with the rest of the Eurozone on a wide front of products and services and the lack of currency barriers assist that.

A 132% Dept/GDP is a problem no matter what the currency, and would only be exacerbated, in the short term by devaluation. Low EZ interest rates - not always appropriate - can also assist in keeping debt servicing costs down.

But I am a sceptic when it comes to financial/monetary engineering solutions to deep structural problems and inefficiencies - the presence of large bureaucracies which increase costs and fail to add much value, the rentier mentality of much of the service sector.

Just as the EU was a convenient bogeyman for the British national elite to avoid accountability for their own failings, I see a danger that the Euro will fulfil a similar role for Italian demagogues.

QE and low interest rates gave the Italian economy every opportunity to recover. The fact that it hasn't done so as well as other (less favoured) economies is not the fault of the Euro.  And trying to leave the Euro could be even more damaging for all parties than Brexit.

Index of Frank's Diaries