In reality, Italy should never have joined the euro, but it can now no longer leave the euro zone. What consequences?

As Italy is not correcting its cost competitiveness disadvantage and has a very high public debt ratio and a need to monetise its public debt, it should in reality never have joined the euro. But the huge size of Italy’s gross external debt, which is mainly in euros, prevents Italy from pulling out of the euro and devaluing. So it seems to us that Italy - which it does not understand for the time being - is doomed to: Conduct an internal devaluation (reduction in labour costs) to restore its cost competitiveness; Conduct a restrictive fiscal policy to prevent its interest rates from rising.