The euro crisis has now claimed a centre-left Prime Minister in Greece and a centre-right one in Italy. Leftist Spain is keeping a low profile, trying very hard not to be noticed – almost certainly in vain.
Yet it would be a mistake to write off the Mediterranean economies as “all the same”. Greece is a true basket case, a welfare state in the literal sense – a state dependant on welfare – underwritten mainly by the Germans. Italy, however, is in many ways a strong economy, at least in parts, with lots of viable businesses and an understanding of the need for international marketing. The present crisis is all about past deficits rather than future prospects.
Italy’s underlying problems go back a long way: weak governments since the beginning of the Republic encouraged structural inefficiencies. As a result, public sector debt has grown out of control under governments of both left and right. This could be ignored in the years of growth, but not since 2008.
Silvio Berlusconi attempted some reforms, but half-heartedly and largely without success. So the markets rose a little on the news of his resignation – only to fall dramatically when realisation set in: If Berlusconi cannot deliver reform, who can?
There is no one in Italian politics with anything like Berlusconi’s power and personal dynamism. Although he has lost the high approval ratings he once enjoyed, the fact that he ever had such large majorities makes him almost unique among the Republic’s Prime Ministers, and he still has a larger block of parliamentarians and voters loyal to him than any other Italian politician. He might object to the comparison, but he was the most powerful Italian leader since Mussolini. He delivered an unparalleled period of relative stability in Italian politics. If he must share some of the blame for some of Italy’s failure to reform, he also deserves at least part of the credit for her recent prosperity.
Largely portrayed in the English speaking media as a buffoon, he is nevertheless a self-made multi-millionaire and understood business – unlike the career politicians and bureaucrats of the European Establishment, who never embraced him. His clowning led many to underestimate him: his road to power was over their political graves. He was a product of the openly corrupt Italy of the 70s, but he did not create the system that made him and which he exploited so skilfully. An unelected technocrat is unlikely to succeed where he failed.
Many Italians say openly that only a Mussolini can sort their country out. The EU seems keen to take on that role. For all his many, many faults, Silvio Berlusconi may yet go down as having been the last, best hope of Italian democracy.
At the very least, the eurozone will weaker without him – and a lot duller.