Welcome to the Euro Intelligence Podcast. I'm Wolfgang Munchau and with me are Susanna Monsenk and Jack Smith.

Today we would like to talk about fiscal policy.

Fiscal policy in Europe, the differences between countries, not just in terms of fiscal deficits,

so this is not just another discussion about who's got the worst or the best deficits, but about fiscal procedures.

There is, in fact, Italy, a country that has actually implemented procedures that are far more advanced than some of the procedures we see in, say, Germany or France over the years.

And this is to do with the fact that Italy's hit its economic problems or fiscal problems

long before others

did and reacted accordingly. So it is worthwhile now that Germany is passing a very messy budget.

We wrote about it in your intelligence today. It's an unbelievable mess in terms of the

overspend, in terms of unbudgeted items that are likely to hit them in the face in the next few years.

Germany is a country that had a lot of fiscal rules and, you know, talked a lot of virtual signaling,

fiscal virtual signaling. But Germany never really implemented procedures that would ensure that

once there is sort of a shock to the system, as there has been,

as there have been many, that there would still have a procedure that would keep them on some

sustainable path. Jack, you've written about Italy, the Italian budget. Italy is out of the

spotlight of the bond market vigilantes. Italy is not in crisis. I always joke it's like hopeless but not serious.

Nothing has changed much in Italy.

The situation is really unchanged on what it was like five years ago or ten years ago.

But at least it's not in crisis.

But they're doing the budget procedure seems to be working in Italy better than it does in other countries.

I think that's fair to say. Of course, Italy still has a very high debt burden relative to the size of its economy, at least compared to other large European countries. In fact, it's still the highest of the

large European economies, although France is doing its level best to try and catch up. But the issue that has really kind of fundamentally caused that, I think, contrary to some

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