"What Italy needs today is competition, privatisation of grossly inefficient state-sponsored utilities, deregulation of the financial system and changes in labour laws. Such reforms can be hard to implement even in a booming economy. In a stagnant or declining one, they will become impossible.

To make matters worse, Italy will be tightening its budget at the same time as Germany implements the biggest tax increases in its modern history — also in deference to the Maastricht Treaty, if not under quite such direct compulsion from the EU. These simultaneous fiscal blunders in Italy, Germany and Eastern Europe will almost mean another “lost year” for the euro zone, with economic performance falling far behind America, Britain and Japan. But the long-term consequences could be more far-reaching.

At some point the people of Europe will realise that there is something rotten in a political system that leaves them forever in the world economy’s slow lane — and which cannot be changed by any democratic process, regardless of how people vote."