It is easy to feel gloomy about Italy’s prospects. The International Monetary Fund expects the country to grow the slowest of the advanced economies, including the US, this year and next. Italy’s budget and trade position are poor; it has huge public debt, rising inflation and dreadful over-regulation. Market prices reflect general pessimism – the spread between Italy’s and Germany’s 10-year bonds widened on Tuesday to 52 basis points, more than double last year’s average.

Is the gloom exaggerated? Last weekend’s election victory by Silvio Berlusconi’s alliance is clearly a mixed blessing. But there are reasons for optimism on the economic front.