Tuesday, May 29, 2018

The Italian Quagmire

With the decision of the Italian President, Sergio Mattarella, not to allow the formation of an M5S-Lega coalition government, the Italian crisis has only deepened. Whatever Mattarella's intent, the winners of this latest move are likely to be the far-right Lega. Yanis Varoufakis in the Guardian notes, with understandable outrage:
"Had Mattarella refused Salvini the post of interior minister, outraged by his promise to expel 500,000 migrants from Italy, I would be compelled to support him. But, no, the president had no such qualms. Not even for a moment did he consider vetoing the idea of a European country deploying its security forces to round up hundreds of thousands of people, cage them, and force them into trains, buses and ferries before sending them goodness knows where.
No, Mattarella chose to clash with an absolute majority of lawmakers for another reason: his disapproval of the finance minister designate. Why? Because the said gentleman, while fully qualified for the job, and despite his declaration that he would abide by the EU’s rules, had in the past expressed doubts about the eurozone’s architecture and has favoured a plan of EU exit just in case it was needed. It was as if Mattarella declared that reasonableness from a prospective finance minister constitutes grounds for his or her exclusion from the post.
What is so striking is that there is no thinking economist anywhere in the world who does not share concern about the eurozone’s faulty architecture. No prudent finance minister would neglect to develop a plan for euro exit. Indeed, I have it on good authority that the German finance ministry, the European Central Bank and every major bank and corporation have plans in place for the possible exit from the eurozone of Italy, even of Germany. Is Mattarella telling us that the Italian finance minister is banned from thinking of such a plan?
Beyond his moral failure to oppose the League’s industrial-scale misanthropy, the president has made a major tactical blunder: he fell right into Salvini’s trap. The formation of another “technical” government, under a former IMF apparatchik, is a fantastic gift to Salvini’s party.
Salvini is secretly salivating at the thought of another election – one that he will fight not as the misanthropic, divisive populist that he is, but as the defender of democracy against the Deep Establishment. He has already scaled the moral high ground with the stirring words: “Italy is not a colony, we are not slaves of the Germans, the French, the spread or finance.”"
What a mess. But that's what you get when elites support policies that produce two lost decades for the Italian economy. Per capita GDP in Italy today is no higher today than it was when Italy initially joined the Eurozone in 1999. Youth unemployment is 35 percent. No wonder outsider forces are running the table and, unfortunately, the savviest of those forces appear to be the Lega.
Note: for more useful info and analysis, see David Broder's lengthy article in the Jacobin on "Salvini's Triumph" and Thomas Fazi's essay on "Italy's Organic Crisis" in American Affairs.
About this article
Sergio Mattarella’s defence of the status quo has ensured the success of racist and populist policies, writes former Greek finance minister Yanis Varoufakis

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