The Writing's On The Wall

We've travelled to mainland Europe a couple of times in recent months. In Spain we drove to three major cities and more recently we went to one of the larger Greek islands. And one thing about the eurozone was staring us in the face. The writing was literally on the walls. The amount of graffiti, compared with anything you see in the UK these days, was off the scale.

It was the same - actually probably worse - when we went to Italy last year, though we did fly into Naples.

My explanation couldn't be more simple. Compared with the UK, youth unemployment in all those countries is also off the scale*. So what else to do but paint the walls, if you're climbing up them with frustration.

So now Italy stumbles into a crisis because its president will not risk appointing a government that might be eurosceptic enough to threaten Italy's presence in the euro and maybe even the EU. Thereby risking an even more eurosceptic government resulting from new elections, as electorates don't like to be told they got it wrong, try again.

Actually the underlying problem is that the euro - still not a fully, properly honest currency - has proved to be a source of misery for many of the southern European states. Why should anyone be surprised that Italy should be deeply unhappy when it's growth has been zero since the creation of the euro. That's right, zilch, nowt, nothing at all in the way of growth since 1999. (An average annual growth rate of zero, to be more precise).

Some authors have tried to argue that this is because of structural problems in the Italian economy that predate the creation of the euro. After all France has had an average annual growth rate of 0.84% and Spain all of 1.08%**. But the euro is set up to benefit the Germans, who want to sell German products but don't want to face up to the broader financial consequences.

I will return to the Italian job at some point. But for now all I can make out is the frustrated doodlings of a generation of graffiti artists. I'm not surprised they and their parents are angry and ready to lash out by voting for change even if it entails risk. After all, if it's broken why not break it properly?

* It's actually 44% in Greece, 36% in Spain, 32% in Italy - and even 21% in France. The EU average is 16% and the GB figure is 12%. See https://www.statista.com/statistics/266228/youth-unemployment-rate-in-eu-countries/
**Bruegel.org, Italian economic growth and the euro, 26 July 2017