In his showdown with Silvio Berlusconi this week, Italy's prime minister, Enrico Letta, invented his own indicator of political risk. Since 1992, he noted, there had been 14 governments in Italy, while Germany had seen just three chancellors. This "spread", as Mr Letta put it, helps to explain the spread in the yields between Italian and German debt. Between 1968 and 1992, Italy had 24 governments, and the public debt more than doubled "as electoral support was bought by loosening the state's purse-strings". Successive Italian governments have been too short-lived to institute lasting reforms, fearing unpopularity in the short term.
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