1. The problems of economic policy in Italy at the present moment must be examined within the wider international, and especially European context. Now, as never before, the direction, the intensity and the timing of internal policies has come to depend on external variables. But such variables are not entirely “acts of God”; they are to a large extend due to international economic policies and to domestic policies in other countries. I wish to concentrate on how this interdependence of national and international policies has worked. I submit that it has worked perversely and that such perversity could, and perhaps still can, be avoided.