Italy's economy is back in recession

Italy's economy is back in recession. This is its third dip downward since the 2008 financial crisis:

(Istat/Goldman Sachs)

The continued Italian crisis brings into question the Italian government's focus on spending cuts and austerity measures. The theory pushed by champions of austerity is that government spending cuts will make the market feel more confident, and therefore grow the economy. And so the government has continued to hemorrhage jobs and spending even while Italy's youth unemployment rate remains above an eye-watering 40 percent.

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But the Italian economy — as well as the broader picture across the eurozone — remains firmly on a downward spiral.