Democracies rarely make difficult decisions without great leadership to guide them. The Italian elections of February 24-25 are just the latest example. The question before the electorate was whether to continue the austerity program put in place by the government of Mario Monti, a program meant to assure Italian prosperity within the eurozone. The answer was an unresounding no. No, because Monti was firmly rejected, and unresounding because the voters did not settle on anyone to replace him.
Pier Luigi Bersani’s center-left coalition came in first in the Chamber of Deputies, barely, but it lost the Senate. It will not find it easy to form a government. Monti did too poorly to offer himself as a governing partner. Beppe Grillo, the ex-comedian who founded a new political party and won a whopping 25 percent of the vote, is more comfortable in opposition than in the government. The likeliest bet is ex-prime minister Silvio Berlusconi, who did rather well for a man forced out of office, but he is poison to most of Bersani’s voters. Expect a new election in the not-too distant future.
The outlook is frustrating and dangerous. Italy is the eurozone’s third largest economy. It has the power to bring down the euro and, with it, to shake the world. We in the United States are hardly immune. Recently, American investors have been lulled into thinking that all’s well with the euro. Yet all of the reassurances of the European Central Bank and its president, Mario Draghi, are put into question by the unwillingness of the electorate to do the hard thing when needed. And since continued liquidity and buying of Italian debt is dependent upon a sound government obeying ECB diktats, Italy is in trouble.
You can hardly blame the Italian electorate, however, for not wanting to maintain austerity in a recession and an era of unemployment. Only superb leadership could have convinced them, but no such talent was on offer. A survey of the four leading candidates makes that clear.
Monti is an ex-professor and it showed. He had neither the rhetorical skill nor the common touch needed to make an austerity program popular. Besides, his program was disappointing. He was chosen to lead a so-called technical government in 2011 after the policies of the Berlusconi government caused a debt crisis.
Italians hoped that Monti would restore Italy’s ability to borrow money on good terms and liberalize the Italian job market. He achieved the first goal but only by enacting major new taxes. He made little progress with jobs. The result left many people angry and frustrated.
After Monti, Italians were expected to turn left. Bersani offered a kinder, gentler version of Monti’s austerity but it was no sale. An uninspiring veteran of the Italian political scene, Bersani offered nothing new.