Financial markets and ratings agencies, the everyday harbingers of economic turmoil, have reacted negatively to concerns that despite a deep recession, much-needed reforms will not continue in the euro-zone's third-largest economy.
With the center-left and center-right now pitted against each other, there is little to indicate that economic progress will be made in Italy. But that hasn't stopped appeals from European leaders for politicians to consider the consequences for the euro crisis, which many fear could now return.
Italy is an uncertain and polarized country rife with fear, resignation and anger.The election results must be a political alarm for Europe. Europe can no longer afford for the euro zone's third-largest economy to be ungovernable for an extended period of time.
A race is taking place in Europe between those backing austerity and reform policies on the one side and the populists on the other and one thing we know for sure is that a stable government in Italy is important to the euro zone. To pull Europe from an economic quagmire, stable politics are required, also Italy should not give in to populism.
Right now, the populists are leading by a nose. Political leaders in particular must be shuddering with fear after the Italian elections. Yes, it may be true that Italy was already considered to be ungovernable even before the crisis. It's not unusual that the country is already talking about the prospects of new elections. The difference this time is that the country's political stability has become far more important since the introduction of the common currency.
The Italian election made one thing certain: European economies will continue drifting apart and their ability to compete will not equalize at a good level. Great uncertainty weighs on this currency union once again.
The Italian election result is a disaster for Italy and for Europe. Whether they voted for the Christian Democrats, the Communists, Berlusconi or the reform-minded left, little changed in the bloated, ineffective and corrupt state -- except that taxes rose. Earlier, their frustrations with their own country led Italians to turn toward Europe. No other country showed as much enthusiasm for the EU. But Brussels is no longer seen as a lifeline. Rather, it is seen as a lead weight that is pulling Italy into the abyss.
If a new government in Rome, regardless of whether it is liberal or conservative, refuses necessary reforms in the long term, it will also have effects on the entire euro zone. Mariano Rajoy in Spain and François Hollande in France, both under enormous public pressure, could try to further soften their austerity and reform goals. And even Greece, which withstood a popular uprising by the skin of its teeth, could waver (on reforms). Last but not least: The EU fiscal pact (requiring countries to implement a so-called debt brake in their constitution to limit annual deficit spending) would be worth less than the paper.
Europe can't afford for Italy and other Mediterranean economies to be strangled by tough austerity measures, leaving an entire generation of young people from Malaga to Athens without a future. Shrill alarmism also won't help, as it only serves to accelerate the downward spiral on the markets. Instead, measures must be taken to give the lost generation prospects for the future. Only then will the EU have a chance to survive, both economically and politically.
Crashing head-on is the fate that awaits not just Italy, but the euro zone too. Italy faces a political deadlock. Either Europe changes course, or it's headed straight into a wall.
By Guylain Gustave Moke
Photo-Credit: Wikipédia: Pier Luigi Bersani