The argument from @scmallaby here that Italy's growing debt-to-GDP ratio since 1999 is mainly due to profligate state spending and an absence of market discipline is flawed... washingtonpost.com/opinions/italy… 
...first, here's the debt-to-GDP picture. Yes, as he says, up significantly in France and Italy. & big contrast with Germany, where its been falling since 2012....:
...but is Italy's debt ratio due to vast budget deficits in Italy, as he implies? Actually, Italy has had lower annual deficits than the rest of the G7 since 2000 (as has France)...:
...and look at the Italian government's budget position minus interest payments (primary). Surpluses in every year except 2009...:
...by this primary surplus metric Italy has been almost as disciplined as Germany - indeed more so during the first decade of the euro...:
....so if Italy's actually been relatively fiscally disciplined since 2000 why has its high debt to GDP ratio gone even higher? The answer - something entirely missing from Mallaby's piece - is an utter GDP growth disaster for the country...:
...in other words it's the DENOMINATOR of the Italian debt/GDP ratio which is responsible for the surge, not profligate government spending....
....Back in the depths of the eurozone crisis officials and commentators repeatedly blamed excessive state spending for spiking debt to GDP ratios in countries like Spain and Ireland even though those countries had been running government budget surpluses before 2008...
....this seems to be one of @paulkrugman 's cockroach arguments then: “No matter how many times you flush them down the toilet, they keep coming back”.
...an addendum. To what extent might Italy public austerity - under pressure from the rest of the EU - have actually contributed to its GDP disaster? An imperfect measure is the IMF's estimate of annual CHANGES in state structural borrowing as a percent of potential GDP...
....it's imperfect because the IMF doesn't actually know what potential Italian GDP is. But, that aside, here's the IMF estimate, showing that deficits cuts exerted a serious drag on Italian output in 2012 & 2013...
....so not only is there good evidence that Italy has been pretty fiscally responsible within the euro, but that it might well have been TOO responsible, with excessive deficit contraction holding back GDP growth in an ultimately self-defeating manner....
...None of this, of course, means that the Italian political establishment has been economically blameless over the past two decades. They have balked at countless necessary supply side reforms. But let's blame them for the right things - and fiscal profligacy isn't one of them.
