As a study in political ascendance, it is hard not to be impressed by the rise of Italy's new prime minister, Matteo Renzi (President invites Renzi to form Italian government, 18 February). More concerning is the task which could face Mr Renzi: succeeding where many others have failed and turning round an economy which has shrunk 9% in the past six years.
It is tempting at such times to think that Italian politicians, whether left or right, are essentially incompetent – and, in some cases, worse. But a more plausible explanation for Italy's dire economic situation is that the policies of recent governments have made little difference.
As a member of the European Union, Italy has little space for manoeuvre on the fiscal side, and even less on the monetary side. The previous prime ministers, Mario Monti and Enrico Letta, failed to convince EU partners, Germany in particular, to support policies aimed at stimulating output and employment.
Mr Renzi has a monumental task and must change course from his predecessors. He should explain to his EU partners that Italy has a plan B and could leave the euro area if his government cannot improve output and employment through new fiscal and monetary policies.
This would be a once-in-a generation decision, but if he fails, Mr Berlusconi, fervently anti-Merkel and anti-EU, lurks in the background ready to return. Plus ça change … moins ça change?
Emiliano Brancaccio
University of Sannio, Italy
Giuseppe Fontana
University of Leeds and University of Sannio, Italy
source Guardian
No comments:
Post a Comment