Italy: Domestic versus International Origins of Currency Crises

Abstract

Italy, unlike France, was never able to pass off the cost of devaluation to other countries. Though the size of the Italian economy was roughly in the same league as that of the French, Italy never assumed a similar leadership position within the EC. On the contrary, Italy was typically on the receiving end of devaluation request, though this has not been problematic. Participation in monetary integration was uncontroversial, and the Italian government had been willing and able to devalue its currency upon request without fear that rival parties would exploit it to make the government appear incompetent.