Italy Says NO to Blank Checks for Ukraine
The political mood across Europe is beginning to shift, and even governments that have strongly backed Ukraine are discovering that public opinion has its limits. Italian Prime Minister Giorgia Meloni has reportedly argued that Rome must place the soaring cost of living, particularly energy and fuel
Source: Armstrong Economics
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DW NOTE
Meloni faces the same arithmetic as every European leader: energy subsidies to offset higher fuel costs are being paid for with debt raised at rates that reflect markets pricing in permanent fiscal expansion. The cost-of-living crisis isn't a political mood—it's the bill for holding the yield curve down while running fiscal deficits to cushion populations from energy price shocks that haven't fully reversed despite oil falling 36.8% from its peak.