Welcome to the Euro Intelligence Podcast. I'm Wolfgang Munchau and with me, I'm Zanemunshank and Jack Smith.

Today we talk about the toxic interaction between falling productivity and fiscal deficits.

At Eurointelligence here, we cover European countries, we cover the UK, we cover the countries in our immediate neighbourhood.

And one of the things we noted in our coverage is that we get versions of the same story.

You have a problem clearly. France has been a big news item.

And there's clearly a problem with a rising deficit that was underestimated and also not particularly

prioritized by the political system.

You have Germany going from a fiscal hawk to a very profly good fiscal country within a very

short period of time.

You see this in the UK right now, and these are countries on which we will talk about in greater depth in the second half of our podcast.

In the first half, we will want to talk about the phenomenon, the broader European-wide phenomenon, the Western phenomenon,

of why every country is, why this is happening to pretty

much everybody. Jack, you've, you've written about Italy, you've written about the UK,

you've written about Spain. Clearly, this can't be coincidence, Kenneth.

No, this can't be coincidence. And I think it's important to kind of point out that there are some of these common problems coming up in these different European countries, despite, you know, and these are longer term problems, despite their shorter term economic and fiscal situations. Of course, in some of these countries, the kind of acuteness of the situation varies. So on one end of the spectrum,

you have France and to a certain extent the UK. On the other end of the spectrum, you maybe

have Germany and to a certain extent Spain with Italy being somewhere in the middle. But in the

longer term, you start to see similar issues pop up, right? So first, if we're coming to Italy and

talking about that, there's been, of course, a real contrast

politically in terms of the Italian government's willingness to consolidate fiscally, not just

in the short term, but over the longer term, and correspondingly a difference in terms of deficits.

Of course, Italy's debt to GDP ratio is still higher than France's, but in terms of the deficit, the trajectory

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