In recent years, recession and financial turmoil have felled governments throughout Europe as voters looked for change in an era of economic distress. Now, experts are asking whether politicians are capable of promoting plans that offer a way out of the malaise — or whether they could be elected if they did. After its voters this week denied any party enough backing to form a credible government, Italy joined Greece in preventing establishment parties from achieving the mandate required to push through painful reforms, inviting new financial instability. That dynamic is quite familiar to Americans, who have watched President Obama and the Republican-controlled House of Representatives lock horns over the debt ceiling, the so-called fiscal cliff and now sequestration in what many experts consider the biggest threat to the economy. “The governing parties tilt ever more toward populism instead of making decisions that are important but unpopular,” said Eckhard Jesse, professor of political systems and institutions at the Chemnitz University of Technology in Germany. “The room to maneuver has gotten tighter, but the expectations have risen.”
In Italy, the surprise success of the Five Star Movement, founded by the comedian Beppe Grillo, has dashed hopes that the recent calm in financial markets was anything but a brief pause. “We will change everything,” said Nicoletta Febbraro, 57, a self-described “flower child” and follower of Mr. Grillo’s, elected to the regional council in Lazio outside Rome.
The uncertain outcome of the election in Italy is only the latest illustration of how a sclerotic system has become increasingly fragmented, leaving fragile multiparty coalitions incapable of bold gestures and holding the reins of power only tentatively.
The question remains whether the phenomenon, in countries with high debt, aging populations and slower growth, is a natural outgrowth of the financial crisis and its aftermath or representative of a permanent shift, driven by demographic changes that have forced difficult policy choices, new technologies that have put the quick formation of mass movements within reach and an electorate with no patience for missteps or difficult reforms.
Full Article: Vote in Italy Invites New Wave of Financial Instability – NYTimes.com.