THE ITALIAN MIRACLE
Now that the euro has been launched, it is a good moment to step back and remember just how European economic and monetary union (EMU) came into being. Fearing that German reunification would jeopardize the "Rhenish" balance on which Europe had rested until then, French President Francois Mitterrand and German Chancellor Helmut Kohl decided in 1990 that the only credible guarantee of an ongoing German allegiance to European unity would be the immolation of the deutsche mark -- and with it the almost totemic reverence it elicited from the citizens of the Federal Republic -- on the altar of a common European currency. To this effect, a committee chaired by the president of the European Commission, Jacques Delors, unearthed a long-forgotten report drafted in the early 1970s by the prime minister of Luxembourg and made the recommendations ultimately leading to the adoption of EMU in the 1992 Maastricht Treaty. It was a laborious compromise that the central bankers, with the German Bundesbank in the vanguard, did not welcome at all. They eventually resigned themselves to it, but only on one condition: the crossbar that EMU candidates needed to vault would be set so high that it would be inaccessible to those not blessed with a strong and stable currency. Thus EMU was effectively conceived as a dress made to measure for a hard core of virtuous states: Germany, France, Luxembourg, and the Netherlands. But it was precisely the crossbar's prohibitive height that made the countries doomed to exclusion aware of the depth of the pit in which they would be left to vegetate -- and prompted them to make extraordinary efforts to drag themselves out.
The effort made by Italy was more than just extraordinary; it was superhuman. It could not have been otherwise, given the gulf between the Maastricht requirements for budget deficits, national debt, and interest rates on one side and the corresponding indicators in that most fiscally profligate of European states on the other. But the Italians
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