Renewed trouble in Italy is yet another reminder that the rigidities built into the system that underpins the Euro may be becoming increasingly unsustainable. The country’s budgetary deficit is expanding with Bush-style brio, but more important than that is this via the Daily Telegraph:

“Unit labour costs have soared compared to northern Europe, leaving Italy trapped inside the currency bloc with an exchange rate over-valued by some 20pc.”

And there’s nothing much it can do about it.