In September 1996 a diplomatic incident ruffled feathers between Spain and Italy. A few days after the annual meeting between the governments of both countries, which was held that year in Valencia, Jose Maria Aznar revealed to the Financial Times that the Italian Prime Minister, Romano Prodi, had suggested to him that Spain and Italy jointly delay joining the currency union in order to be able to meet with less suffering all round the three conditions of the Treaty of Maastricht: low inflation, a maximum deficit of three percent and a public debt ceiling of 60 percent of GDP.

In his characteristic tone, Aznar told the FT that Spain was in perfect shape and need not wait for anyone. Prodi, overwhelmed by the austerity policy imposed on Italy by the Convergence Programme, was left with no choice but to deny those statements and tighten the screws with the extraordinary and unpopular ‘euro tax’. In 1997, Italy crossed the threshold of Maastricht (with Helmut Kohl turning a blind eye where public debt was concerned), and after a few months, Prodi lost his majority in Parliament. The Italians went back to their big-spending dreams, and businessman Silvio Berlusconi tempted them onwards.

Fast-forward to September 2011, and the two countries are back on a collision course over the euro. Spain is just getting underway with an accelerated reform of its Constitution while Italy is skulking about a labyrinthine approval of its adjustment plan, of which three versions have been drafted in recent weeks against a backdrop of immense political turmoil and a robust union response. The Italians were served notice this summer through the Corriere della Sera of the specific requirements set out by the European Central Bank. In Spain, meanwhile, the government continues to deny that a letter has arrived in Madrid from the ECB threatening intervention. But this letter is indeed there in the in-box.

Italy is putting up stiffer resistance

Spain is easier to bring to heel than Italy, and we're seeing evidence of that these days. Despite Spain’s inveterate pride, the country does whip into line when things turn serious. Spain is a less complicated country than Italy, unions are not very strong and the 15-M movement is a rebellion without direction – a spasmodic outbreak. Elections are on the horizon, too. A cycle is drawing to a close, and José Luis Rodríguez Zapatero is determined somehow to salvage his place in the history books. Feeling vulnerable during this disaster that’s overtaken the PSOE, and knowing what stuff the far right is made of, he has decided to protect himself.

Italy is putting up stiffer resistance to the ECB, falling back on the catenaccio system in football that stresses defence. Italy is the land of cities, of family businesses, unions, societies that are more or less secret, and acquired rights. Its economy is more self-contained. There is little foreign penetration into industry and banking and public debt is concentrated in domestic saving books. Berlusconi is on the way out, but no alternative to him is marching over the horizon just yet. Italy moves to its own rhythm, and a precipitous collapse of its internal balances could be catastrophic for Europe. The South of Italy is a tinderbox. Remember the 2008 movie Gomorrah? The Germans know the film, and that’s why they regard a little iron discipline for the Iberian Peninsula as absolutely essential. And that helps to explain some of the pressure on Spanish Parliamentarians to reform the Constitution with some alacrity.

Translated from the Spanish by Anton Baer