This time, it's Italy. Zero Hedge:
In Rome, the main post office is in a majestic old building with imposing architecture. It was a procession just to buy a few stamps. Stand here, stand there. Take this ticket, fill out this form, print that form. What should have taken 10 seconds took 10 minutes; the process it took to get there was a real eye opener. They have all these fancy IT systems, but we get the sense that this ‘technology’ just gives the post office a veneer of modernity and sophistication without actually being necessary or adding any value. This is typical of bureaucracy: take a simple task, make it unnecessarily complicated, then spend a bunch of money on technology that makes it even more complicated. Given this experience, Italy has clearly mastered the art of unnecessarily complicating the simple. It’s no wonder they have serious problems paying the bills. Moreover, the country’s demographic challenges indicate the country’s fiscal situation cannot improve. Robust economies are productive… and productivity is typically not associated with the elderly. Italy has one of the world’s oldest populations concurrent with one of the lowest birth rates. This trend drives an unsustainable fiscal quandary: bloated public sector bills with lots of old people to pay pensions to, coupled with a rapidly shrinking population devoid of young workers to pay taxes.
At this point, there can be little doubt that Italy will exit the eurozone... most likely voluntarily. A return to the lira means the Italian government (probably to be headed by Berlusconi once again)(ugh) would be free to print currency at will. This is the only reasonable solution remaining. When will it happen? Probably sooner than we think.
In Rome, the main post office is in a majestic old building with imposing architecture. It was a procession just to buy a few stamps. Stand here, stand there. Take this ticket, fill out this form, print that form. What should have taken 10 seconds took 10 minutes; the process it took to get there was a real eye opener. They have all these fancy IT systems, but we get the sense that this ‘technology’ just gives the post office a veneer of modernity and sophistication without actually being necessary or adding any value. This is typical of bureaucracy: take a simple task, make it unnecessarily complicated, then spend a bunch of money on technology that makes it even more complicated. Given this experience, Italy has clearly mastered the art of unnecessarily complicating the simple. It’s no wonder they have serious problems paying the bills. Moreover, the country’s demographic challenges indicate the country’s fiscal situation cannot improve. Robust economies are productive… and productivity is typically not associated with the elderly. Italy has one of the world’s oldest populations concurrent with one of the lowest birth rates. This trend drives an unsustainable fiscal quandary: bloated public sector bills with lots of old people to pay pensions to, coupled with a rapidly shrinking population devoid of young workers to pay taxes.
At this point, there can be little doubt that Italy will exit the eurozone... most likely voluntarily. A return to the lira means the Italian government (probably to be headed by Berlusconi once again)(ugh) would be free to print currency at will. This is the only reasonable solution remaining. When will it happen? Probably sooner than we think.
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