If starting positions differ so much, a stabilization fund might not result in ex-ante fair risk-sharing, but in a quasi-permanent one-way transfer system. Therefore, any further increase in public risk-sharing is only desirable if it is accompanied by a significant risk reduction. This however requires a further transfer of sovereignty; a policy that is equally controversial in many Member States.
Economic and social policy in Italy has set objectives which are generally consistent with these needs; it is pursuing them amidst the difficulties posed by a society many of whose members are reluctant to recognize the paths of the future. In the short run the problem is to lift firms’ investment decisions from the shoals, so that they drive a recovery of demand.