Fleeing from Italy (project syndicate)

https://www.project-syndicate.org/commentary/capital-flight-from-italy-by-carmen-reinhart-2016-11?utm_source=Project+Syndicate+Newsletter&utm_campaign=9b077e3a0b-shiller_trumps_revolution+_27_11_2016&utm_medium=email&utm_term=0_73bad5b7d8-9b077e3a0b-93854061

...Yet it may be the fact that Italy’s three opposition parties all favor exiting the euro that explains why Prime Minster Matteo Renzi has promised to resign if voters reject the reforms....

...Within the eurozone, such reserve losses are automatic under Target2, the real-time gross settlement system for the euro. If a country has run out of reserves, its central bank automatically borrows to maintain the intraeuro peg. For a country experiencing capital flight (as much of the eurozone periphery has at various points since 2008), this implies a progressively more negative Target2 balance. As of September (the most recent data available), Italy’s Target2 deficit is above 20% of GDP – its worst reading to date (see figure). By some of the standard definitions, these are crisis-level reserve losses (shaded in the figure).