The Price of Watching Prices: Italy’s Slow Slide from Markets to Management
If regulators could make markets behave simply by watching them more closely, Italy would be about to crack the code.
Instead, the Italian government’s latest energy measures suggest something else: when prices rise, the instinct is not just to subsidize costs, but to supervise how those costs flow through the system—down to how firms bid, price, and earn margins. The result looks less like market oversight and more like a slow drift toward price control, dressed up as “pass-through” enforcement.
That shift matters. It reflects a broader belief that competition can be fine-tuned from above by monitoring costs, constraining pricing, and scrutinizing margins. The two decrees at the center of Italy’s response—the Decreto Carburanti and the Decreto Bollette—put that belief into practice.