The Italian Election: Will it Save or Destroy the Euro Zone?

The Italian elections are drawing ever nearer and the fate of the euro crisis appears to rest largely on its outcome. Though the euro zone appears to showing some signs of recovery—budget deficits are smaller, for example—unemployment and slow growth remain a major concern. Recession continues across Europe. However, despite being less evident than in countries such as Greece and Spain, Italy’s failures are, in fact, very grave indeed. Its public debt it around 130% of is GDP, and it is one of two countries in the euro zone where real GDP per head has decreased since the introduction of the euro. [1] According to The Economist, “in the global league table of growth in GDP per head, it comes 169th out of 179 countries over the period since 2000, beating only a handful of basket-cases such as Haiti Eritrea and Zimbabwe.” [2]

In short, Italian elections will determine whether the euro zone falls apart. To prevent calamity, the new Italian prime minister must implement broad reforms to create jobs and promote growth. [2] He must instill competitiveness. [2] On whom, then, will these responsibilities fall?

Undoubtedly the most well known of the three front-runners is Silvio Berlusconi, the former prime minister of Italy who resigned in 2011, after serving three times since 1994. Berlusconi, a media mogul, has never particularly attempted to push through reform, nor does he propose to this time around. [1] Seemingly miraculously, he is making a minor comeback. Though he holds only a small portion of the vote, the mere fact that his chances of winning progressed from impossible to extremely unlikely, is a frightening feat in and of itself. A Berlusconi victory would be nothing short of disastrous not only for Italy, but for the entire euro zone. [3]

Berlusconi’s replacement, economist Mario Monti, is also in the running, albeit with only 15 per cent of the vote. Monti has already instituted some reforms that have helped restore Italy’s credibility. However, it is very unlikely that he will win the election. [3]

More likely is a victory for poll-leader Pier Luigi Bersani, a former Communist now on the center-left. Bersani served as a minister under former prime minister Romano Prodi, instituting some reforms in the pharmaceutical industry. [1] Should he win, it is likely that he will team up with Monti, placing him in charge of the economy in order to win a Senate majority. This seems to be the best possible outcome for Italy, though still not ideal. [3]

It is crucial that Bersani win the election. However, victory is not ensured due to a general Italian apathy towards politics coupled with the unpredictability of the county’s elections. As such, Europe, and indeed the whole world, will await the results with bated breath.

[1] http://www.economist.com/news/briefing/21571884-how-italians-are-going-vote-not-clear-result-will-matter-both-future

[2] http://www.economist.com/news/leaders/21571891-europes-most-sluggish-economy-needs-more-mario-montis-reforms-who-can-save-italy

[3] http://world.time.com/2013/02/20/surprise-frontrunner-in-big-name-italy-election/

6 thoughts on “The Italian Election: Will it Save or Destroy the Euro Zone?

  • February 21, 2013 at 3:18 pm
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    Don’t forget the Bongo Bongo parties!

    Reply
  • February 21, 2013 at 3:18 pm
    Permalink

    Don’t forget the Bongo Bongo parties!

    Reply
  • February 21, 2013 at 3:18 pm
    Permalink

    Don’t forget the Bongo Bongo parties!

    Reply
  • April 7, 2013 at 11:15 pm
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    Chloe, you are a very talented writer. Your witty and engaging prose is quite simply magnificent. I sometimes wonder if you are writing under the pseudonym of some literary great like Faulkner or some technocrat like Thomas Domilon. YOU ARE SUCH A TALENT, A GEM, KEEP ON WRITING, MY DEAR, FOR THE WORLD IS YOURS WITH SUCH AMAZING TALENTS!

    Reply
  • April 7, 2013 at 11:15 pm
    Permalink

    Chloe, you are a very talented writer. Your witty and engaging prose is quite simply magnificent. I sometimes wonder if you are writing under the pseudonym of some literary great like Faulkner or some technocrat like Thomas Domilon. YOU ARE SUCH A TALENT, A GEM, KEEP ON WRITING, MY DEAR, FOR THE WORLD IS YOURS WITH SUCH AMAZING TALENTS!

    Reply
  • April 7, 2013 at 11:15 pm
    Permalink

    Chloe, you are a very talented writer. Your witty and engaging prose is quite simply magnificent. I sometimes wonder if you are writing under the pseudonym of some literary great like Faulkner or some technocrat like Thomas Domilon. YOU ARE SUCH A TALENT, A GEM, KEEP ON WRITING, MY DEAR, FOR THE WORLD IS YOURS WITH SUCH AMAZING TALENTS!

    Reply

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