Ordinarily we ought to be rejoicing that even Berlusconi's backers realize the game is up. Since he took control of the Italian government a decade ago, Italy's economy has stagnated. No surprise there because he ran the country with the sole purpose to avoid prosecution. He rewarded the most wealthy Italians with an end to the inheritance tax, but allowed the culture of graft and silly regulations that prevents business growth to continue unimpeded. It is a classic case of an elected oligarchy that cannot bring itself to rule with enlightened self-interest, he and his cronies seemed to have believed that they can get away with legally lining their own pockets (and a few other perks). This attitude postponed much needed reform and certainly prevented anything like shared sacrifice on the Italian political scene. While Greece has no functioning state bureaucracy, the Italian state is a classic case of rent-seeking by well connected insiders (from all political parties--it has extremely generous pensions for the lucky few). Even so, we live in sad times: in moments of crisis the political establishment turns to Eurocrats (recall this post). While Mario Monti's track-record is quite decent as an anti-trust officer, the choice for him exhibits one of the core problems of European politics: elite mistrust of the populace. As a consequence the culture of deceit widens and -- as tough decisions hit the powerless worst -- the risk of European political catastrophe worsens.
Recent Comments