Italy's adoption of the euro in 1999 was hailed as a major political achievement and an opportunity to secure macroeconomic stability and push through reforms which domestic institutional and political weaknesses would otherwise have made difficult. At the same time, it was clear that the single currency would bring significant challenges: exchange rate adjustments could no longer be used as a quick fix in the event of competitiveness losses and the fiscal authorities would have to respect the discipline imposed by the Stability and Growth Pact. A decade after the creation of the Economic and Monetary Union (EMU), Italy is still adjusting to the new policy environment created by the euro. This book assesses Italy's experience in EMU to date, identifies the main challenges ahead, outlines key policy issues that will continue to shape the economic debate, and highlights how Italy's experience offers lessons for other current and prospective euro area members. Bringing together contributions from policymakers, academics, international organisations and the market, this book is essential reading for all interested in the economic challenges facing Italy and EMU more widely.
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