Tackling the free rider problem in the EMU does not have to be a zero-sum game: Italy’s budget deficit case

Italy’s government and the European Commission continue to be locked in a standoff over the Italian budget. Corrado Macchiarelli writes that while the budget plan is badly designed and must be addressed, there is also clearly a need for euro area reforms and more mutual recognition. Ultimately the Economic and Monetary Union is facing a political problem and the current approach to the Italian crisis is not going to aid the popularity of either the EU or the single currency.