A sense of humour in adversity can be attractive, but it is not always useful. Confronted by the worst recession in their country since the 1930s and the possible implosion of Europe’s single currency, the people of Italy have decided to avoid reality. In this week’s election a quarter of the electorate—a post-war record—did not even bother to show up. Of those who did, almost 30% endorsed Silvio Berlusconi, whose ruinous policies as a clownish prime minister are a main cause of Italy’s economic woes. And a further 25% voted for the Five Star Movement, which is led by a genuine comedian, Beppe Grillo. By contrast, Mario Monti, the reform-minded technocrat who has led Italy for the past 15 months and restored much of its battered credibility, got a measly 10%. This result is a disaster for Italy and for Europe. In Rome the centre-left coalition headed by Pier Luigi Bersani, the pre-election favourite who ended up getting only a whisker more of the vote than Mr Berlusconi, is now struggling to form a government: it is unlikely to be stable or durable (see article). Meanwhile, financial markets across Europe swooned on the news. Share prices fell sharply almost everywhere. Sovereign-bond yields jumped across the Mediterranean countries, to levels touched three months ago, even as they fell in Germany, bringing the euro crisis back to centre-stage.
In fact the danger is less of break-up than of stagnation. This was the week, history may conclude, when Europeans made clear that they were not interested in reform. Nine months after the French ran away from change, the Italians sprinted past them. As many as two-thirds of Italians rejected not only German-imposed austerity but the entire reform agenda that was designed to improve their economy’s dismal record of near-zero growth. Follow that path, and it leads to the economic paralysis and political decline that Japan has endured for the past 20 years.
The election result is scarily reminiscent of the most recent occasion when the centre-left governed Italy, in 2006. Then a ramshackle coalition under Romano Prodi stuttered on, only to expire after less than two years. Mr Bersani could try to form a “grand coalition” bringing together elements from the centre-left and the centre-right, though that means dealing with Mr Berlusconi. Mr Bersani might do better to form a minority government with Mr Monti, sustained from outside by Mr Grillo’s Five Star Movement, a formula that has more or less worked in Sicily. The “grillini”, as Mr Grillo’s new deputies and senators are known, need to decide whether to be purely negative in seeking to overturn the entire political order, or whether to be responsible and support sensible reforms.
To complicate things, the new parliament also has to elect a replacement for the president, Giorgio Napolitano. The best candidate is a former centre-left prime minister, Giuliano Amato. But whoever is chosen, and whatever government is cobbled together, Italy will struggle to avoid a fresh election later this year. It would be better if that election were fought with new political leaders and under a new electoral system that makes a repeat of today’s gridlock less likely.
Full Article: Italy’s election: Send in the clowns | The Economist.