Again I disagree (also with you next tweet after this) and again this is going to be a thread (apologies, I'm not good at brevity). 1/
You say 2011 was economic and 2018 is political. I think the economic fundamentals in 2011 did not warrant the sudden stop that materialised. Besides the relatively strong external position, IT did not have a private credit/housing boom, had run relatively prudent fiscal 2/
What IT had in 2011 - and still has - was an enormous public debt coupled with a government who had zero international credibility and was perceived as fiscally irresponsible (remember Berlusconi backtracking on the fiscal austerity package after ECB started buying bonds?) 3/
So what got us in 2011 was contagion, which we drew upon us by means of bad politics more than bad economic fundamentals. This is a risk we are still facing today, I think. You argue that comparison with programme countries is misplaced because IT did not have a programme 4/
This looks like a post hoc fallacy to me. You'll remember that we got very close to getting a programme in 2011, and the reason we eventually did not need it was that Berlusconi IV was replaced by a technocratic government that was perceived as more credible and responsible 6/
Would that changeover have been sufficient to save our bottoms, had we had worse economic fundamentals? probably not, we can't say because we don't have a counterfactual. But the fact remains that the 'solution' to the 2011 crisis was political 7/
More generally, all your points are relevant but they essentially pertain to a different question, i.e. the likelihood that Italy may face a BoP crisis like 2011, now. Which is an important question, obviously, but not the focus of the piece you are discussing. 8/
Even with small NIIP and CA surplus, as long as part of your debt is foreign owned you still need to find an alternative if foreigners walk away when you are doing more fiscal deficit. This can be more or less feasible, and this is the question we look at in the piece.
