Why are the odds on the breakup of the Euro zone rated so much higher than the odds of the breakup of Italy?
If you were a voter in Lombardy, why would you prefer to stay with an Italy in a tailspin that had been expelled from the Euro, rather than sticking with the Euro and letting the southerners fend for themselves?
And what ratio of debt-devolution to the regions of Italy would you guess is the indifference point for the median Italian voter – that is to say, how much of Italy’s sovereign debt would need to stay with Padania and how much with a rump non-Euro Italia for both north and south to say: breaking up on these terms is fair?
I ask this question because this, it seems to me, is the key difference between Italy and Spain, even more important than the atrocious personality of Silvio Berlusconi. Catalonia would be eminently viable separate from Spain, but it wouldn’t take most of the Spanish economy with it if it separated. The northern European reluctance to bail out southern Europe is replicated in northern Italy’s desire to stop having to bail out southern Italy. If the Euro is in danger of breaking up largely because Germany prefers that, and the chaos that would follow, to fiscal union and the resultant permanent drain on its treasury, why isn’t Italy in danger of breaking up for the same reason?