Euro at risk from Italy&#39;s financial and political crisis

There are mounting questions over whether Italy might leave the euro. Unlike Germany, Italy has suffered a disastrous economic performance since the euro's introduction, and with mounting migration concerns and with the belief the EU left it to cope on its own has changed Italian attitudes to the EU. The new Italian government wants radical changes but their programme is a full assault on EU orthodoxy. Furthermore, Moody's warns it will cut Italy's credit rating, making it harder to service its debts. If Italy falls into a debt crisis it is big enough to throw the entire eurozone into disarray.

You might think that it would be fitting if the European Union were to come to a sticky end because of Italy. After all, the agreement that established the entity that we now call the European Union was signed in Rome.

For several decades after that 1957 treaty, Italy was one of the strongest supporters of the European project.

Having endured first fascism and then, after the war, unstable and ineffectual government, it suffered none of the angst about the loss of sovereignty that plagued British debates about joining the European Community. Moreover, in the early years of the union, Italy prospered. At one point its GDP overtook the UK's, an event that was widely celebrated in Italy as "il sorpasso", the surpassing, or, if you like, the overtaking.

But the overtaking did not last long. Indeed, since the euro was formed in 1999, the Italian economy has grown by a mere 9 per cent, or less than 0.5 per cent per annum. Over the same period, the UK economy has grown by 42 per cent.