As the economic crisis that affects the Eurozone, and probably all the western countries, keeps taking its toll, one feature of the whole situation seems to represent the real threat for Europe’s integrity: the growing distance between the “northern”, and the “southern” countries. This, which may appear as the same old story of differences and distances between two “blocks”, comes to be the biggest reasons for the politician’s anxieties just now. The indicators tell us that this is the first time in the post-1989 history that the Old Continent faces such deep gaps in terms of unemployment rates, inflation and loss of appeal for investors. So we have France, Benelux and Germany (of course) on a side, and Greece, Spain and Italy, which have paid the highest prices, on the other one.
Among the last three countries, which definitely represent the most consistent part of Southern Europe in terms of population, surface and economical potential, one seems to be like an open bet at the moment, more than the other two: Italy. Clearly it’s impossible to forget the importance that Greece has had during the years 2011 and 2012 in Europe’s political and economical scenarios, as the key role that Spain will play in building a safer and a more stable Eurozone in the next months, but Italy now seems to be the country everyone’s looking at for one main reason: the elections.
Of course we can start saying that a poll is always a crucial point of analysis for the Union, as that can really change the assets at any time, but there are several reasons why the Italian elections in February could turn into a real challenge for the Euro, which can possibly kick the crisis a little bit further, or open a new phase of uncertainty. First of all because of the assets that were made during the last year; we are now used to the Merkel-Hollande-Monti formation, with the “Draghi” overall direction which really influenced the global economy during the last months. Well, everybody can now spot the differences, according to his points of view and beliefs, that allegedly exist between the Merkel-Sarkozy-Berlusconi disposition. Same team? Ok, don’t think so. Even if somebody may think that a better job was done, nobody can even start saying that the results were the same. So we can now highlight the first reason why the Italian elections will determine the rise of a different asset, or the progress of an experimented one, for the next times.
This situation leads to another point of discussion: who’s the man? The situation will definitely be different with each candidate for the Premiership. Pierluigi Bersani is the leader of the Democratic Party (PD), and the candidate for the Italian centre-left wing, supported by Nichi Vendola’s radical left Party and surely closer to the labor unions’ convictions. According to the recent polls and the chats in front of an aperitivo in the Peninsula’s cafes, he is the most likely next Italian Prime Minister. Bersani seems to be oriented to proceed with the “Monti’s medicine” to find the right way to rebalance the highest ratio of sovereign debt to GDP in Europe (bar Greece), and not changing the strategies about the pension reform that was made by Monti’s ministers and about foreign affairs. Of course nothing will remain still, considering that we are talking about a centre-left oriented formation, with pulsing promises to the population’s poorest classes and, as said, to the labor unions.
Then we have an old and well-recognized player: Silvio Berlusconi. As everybody knows he has finally decided to “enter the field” again, and to be the leader of the right-oriented wing for the campaign. Or to try, at least. Italy’s right-oriented block no longer appears as it used to do a couple of years ago, with a lot of uncertainty around it. The North League will probably run on its own, both for the national election and for the regional elections in Lombardy (both to be held in February). And this is no little thing, if we consider that the radical federalist and regionalist party was Berlusconi’s strongest ally. Berlusconi’s program is not yet clear, as he seems to be concentrate in trying to regain a strong public approval and to convince the audience of the integrity of his party, Il Popolo della Libertà (The People of Freedom) too often hit by scandals. Il Cavaliere seems not to be as politically strong as he used to be in the past, and not really appealing for potential allies, but as an incredibly experienced communicator and an extremely rich media tycoon, he still represents an important figure in the Italian political scenario.
Finally we have the “Centre coalition” which revolves around Pier Ferdinando Casini’s party (Unione Di Centro, a catholic-oriented centre party) and which is giving the audience the real piercing surprises (Berlusconi won’t be happy about this) and the deepest turmoil. And who’s the man here? Mr. Mario Monti. Ok, il Professore have not completely declared “I will run for the Viminale”, but this is actually what everyone expects to happen. Now, what are Monti’s chances? Monti’s government wins more plaudit from the markets than the public, as said recently by more analysts, and he is facing a consistent loss of popularity, which was inevitable. The indicators say that the rate of unemployment has jumped from a 8.8% a year ago to 11.1% (for young people there’s a good Christmas gift: a dramatic 36% rate), that the amount of taxes has raised significantly, that workers will retire later, and a lot of other things that immediately run to the people’s stomachs. But there are some other things to consider. Monti’s persona is quite widely appreciated in the Country and people seem to consider the whole thing. The spread between Italian BTP and German Bund has come today to 287 points (from a 550+ of late 2011), for example, which was one of Monti’s big challenges. Moreover investors seem now to look towards Italy with a more faithful eye, and last but not least, so does Europe.
Bersani seems to be the people’s man, even though the very first choice for Italian electors now is abstention; Monti seems to be Europe’s man, with the Old Continent’s leaders silently supporting him and hoping for a long era of integrity under his control; Berlusconi could be a surprise, with nobody really forecasting his victory but with a lot of analysts predicting a fast-growing importance for him in the next Italian Parliament. Who will be Italy’s next prime minister? How Europe will deal with him? Will things remain as they currently are?
This is the political scenario of the Bel Paese, but several are the situations which might come from the election. Italy, the third economy of the Euro Zone, can really be the country that will bring back faith to Southern European markets in the next two years or can be the crazy engine which can lead the train towards uncertain fields. The challenge is open, the time is close.