The Italian election: eurozone crisis 2.0?

Political paralysis looms. Financial markets tank.

by Valentina Vezzani and Erica Alini

Update: Sadly, the Italian election unfolded as our graphic novel (see below) predicted. Italians, tried by the recession and wary of more austerity, delivered a “protest vote” that produced no clear winners.

The country is simply “ungovernable,” as Italian business columnist Stefano Folli put it. According to the exit polls published by his Il Sole 24 Ore newspaper, Italy’s centre-left coalition, lead by Pierluigi Bersani, and the centre-right alliance headed by former prime minister Silvio Berlusconi are neck-and-neck, having seized about 30 per cent of the vote each. A razor-thin advantage on Berlusconi means the centre-left will be able to at least control the lower chamber, where Italy’s electoral law awards 55 per cent of seats to the party that wins a relative majority. There are utterly no winners in the senate, though, where seats are awarded strictly on a proportional basis.

Voters who shunned Italy’s two long-standing political coalitions, didn’t turn to reformist Prime Minister Mario Monti, the former European commissioner who’s been leading the country since November 2011. His newborn party — the darling of international financial elites, eurocrats and Germany’s Angela Merkel — seized only about 10 per cent of the ballots. Instead, most of those who voted against the ancient regime of Italian politics put their faith in the hands of Italian comedian-turned-politician Beppe Grillo, whose anti-establishment party conquered a startling 25 per cent of the vote in the lower house.

Uncertainty about Italy’s political outlook sent the S&P on the biggest one-day dive since November. The yield (interest rate) on Italian bonds rose to 4.48 per cent from an earlier low of  4.17 per cent, a sign that holders of Italy’s debt are once again getting nervous. The Euro fell 1.1 per cent against the greenback. Italy desperately needs political stability to enact productivity-boosting reforms that will restore to growth and ensure it can continue to pay for its massive public debt.

What happens next is anyone’s guess. Italy’s President Giorgio Napolitano will have to consult political leaders to see whether a governing coalition can be formed. If that can’t be done, Italians might have to head right back to the polls.

If all this sounds familiar, it’s because it would be exactly what happened in Greece less then ten months ago.

Erica Alini

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Valentina Vezzani is a Milan-based cartoonist and designer. You can find a selection of her work here and here.

*Illustrations: Valentina Vezzani. Idea and texts: Erica Alini.




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The Italian election: eurozone crisis 2.0?

  1. A country that was once in the forefront of western thought and science…..Galileo, Vanini, Michaelangelo, Da Vinci……..has been reduced to Berlusconi, the Mafia and the Vatican.

    A long sad fall and they haven’t hit bottom yet.

  2. This is a 8-panel comic strip! That would barely qualify as 2 pages of a comic book. Graphic novel my foot. What a crock!

    Thanks Maclean’s for ruining what would otherwise have been a great comic strip.

    • Or you could have read:

      *Illustrations: Valentina Vezzani. Idea and texts: Erica Alini.

  3. What exactly are these “bold economic reforms Italy needs to return to growth?” Austerity measures? I think it’s been proven beyond a shadow of a doubt that austerity measures in a slump are self-defeating. That’s because they *kill* economic growth and jobs in a vicious cycle. That’s what’s certainly happening in countries like Greece and Spain. The UK has undergone deep austerity measures and is now falling into a triple-dip recession — the worst slump in a century.

    Fact is Western countries were in a similar debt crisis after WW2. But they didn’t implement harsh austerity measures to try and pay down debt. They embraced expansionary fiscal and monetary policy which produced phenomenal GDP growth. That allowed countries like Canada to pay down debt from 100% to 17% by the mid-1970s (now 85%); the US paid its down from 135% to 35% (now 103%.)

    So like science, economics is often counter-intuitive. Austerity is like taking a cut in wages in order to pay down debt. It makes no sense. A country needs to be able to work in order to pay its bills.

    • Old saying…..’Ya gotta spend money to make money’

      I don’t know why we’ve forgotten it.

    • Politicians should start trying to get themselves referred to as “awesome-crats”, because who wouldn’t want to vote for an awesomecratic government.

      • Lol. Yeah, the title of “technocrat” has absolutely no meaning. Same with terms like “job creation”, “growth” and “prosperity.” That is con artistry 101: always give a dog a good name…

        • Actually technocrat does have a meaning. It is governance by science and mathematics. The UN and the EU are technocratic. They believe in using statistics, mathematical theory and science to form policy rather than democracy and following the will of the people.

          • Kind of like how the Democratic People’s Republic of North Korea believes in allowing people a free vote.

          • Any organization or nation that includes the word Democratic and Peoples’ is really marxist in nature.

          • That’s because the ‘will of the people’ kept them warring for centuries.

          • Technocracy founded on austerity in a slump is the opposite of rule by evidence. The real problem is that so many technocrats are charlatans pretending their field is based on science..

            No doubt, it’s time that macroeconomics was developed into a science. The first step is exposing the quacks with political agendas. Presently, there are many zombie economic policies shambling along despite having been killed by overwhelming evidence.

          • I can agree with that one.

  4. I disagree that a democratic minority government is not necessarily able to implement bold economic reforms. However, in a state where a majority, or even a large enough minority, receives more in benefits from the state (in wages and welfare) than they pay in taxes, then it is in their best interests to continue the current state of affairs indefinitely, even until bankruptcy. So they will vote that way.

    However, in general, and throughout history, democracies have been perfectly capable of implementing bold economic reforms.

  5. Totally confusing picture globally. The IMF intervenes in Greece, Spain, Italy, Portugal and Ireland along with the EU and tells them all they have to impose “austerity” and “reform” using appropriate “tools” handed to them by the self same organization. The IMF shows up in Britain and Canada and tells us we should drop austerity for growth. Methinks the IMF is totally out to lunch or is so committed to the Euro project that it has to agree with everything the EU Commission wants. Strangely enough German newspapers report Germany is now saying Italy’s election is going to cost Germany “their” Euro.

  6. This a very misinforming article: Italy is not only about Berlusconi ,Monti and Bersani, it also is very much about the M5S of Bebbe Grillo , who you, in your obvious,ignorance of the Italian elections results, have totally ignored and listed as ” others” …..are you blind? It is the first party in Italy ( not a coalition)….yes Mafia is a problem here , like the total persecution of the First Nation people and Baby Seal killings are in Canada…get a life and be a reputable magazine…

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