When an anti-austerity, anti-establishment internet-based political movement with few policies and led by a comedian, gets 25% of the vote in a general election, you know for sure that the political system is travelling on a one-way ticket to disintegration.
Beppe Grillo's Five Star Movement (M5S) won 54 seats and cashed in on Italians’ hatred for a corrupt, incompetent state that has cut their pensions, living standards and left record numbers of young people out of work.
Deadlock is what the markets didn’t want. That’s why Mario Monti was appointed by the European Central Bank to head a caretaker government 15 months ago as
debt mountain threatened to overwhelm the euro. But given half a chance, the
electorate rejected his policies.
The ex-Goldman Sachs banker only got 10% of the vote when he put his austerity programme to the electorate. And with Silvio Berlusconi also raging against
and promising everyone a tax cut, many voters backed a man who has somehow
As a result there is no immediate prospect of a stable government to manage
Europe’s third largest
economy. And the markets don’t like the stalemate at all. After initial polls
showed the centre-left alliance winning, the markets rallied.
Then when the electoral deadlock was confirmed, black turned to red on trading screens around the world. Italian bonds were sold off, trading in the major banks was suspended, the stock markets plunged and the euro crisis returned with a vengeance.
“This looks like a recipe for total gridlock,” commented Nicholas Spiro, a sovereign debt analyst. “On current projections, financial markets are facing the worst of both worlds in
Italy: a full-blown political
crisis in the eurozone’s third largest economy and a severe setback for the liberal
economic agenda championed by Mr Monti.”
Enrico Letta, deputy leader of the Democrat party, concluded that the “absolute majority of Italians have voted against austerity measures, the euro and
Europe,”. This, he claimed, sent a “a very clear signal
to Brussels and Frankfurt”.
But is anyone listening at the headquarters respectively of the European Union and the European Central Bank? No they’re not. The EU and the ECB is desperately to prop up a weak currency and austerity, austerity and yet more austerity is the mantra. No matter that it doesn’t work. They have no alternative.
Spending your way out of the crisis is no good because it’s a global economic recession that is already dependent on large-scale printing of money to prevent a full-blown depression. It’s not just the political system that’s broken.
Grillo’s Five Star Movement is hostile to
Brussels and the indecently corrupt Italian
establishment. It wants to reform parliament by halving its size and a new
electoral law based on proportional representation. Other than that, it has
little to say.
Grillo – called everything from “sans-culotte satirist” to “populist, extremist and very dangerous” – hands it back with interest. His nickname for Berlusconi is “the psycho-dwarf”, while he refers to the technocrat Monti as “rigor Montis”.
Grillo told the Financial Times last year: “We are occupying a void, which in other places like
Greece has been
filled by Nazis and extremists. We are a response to government ‘parasitism’,
corruption, a system of political diarrhoea.” Recent scandals include arrests at
the top of state-controlled Finmeccanica to corruption probes into the Eni and Italy’s
Grillo does not appear on television or take part in debates. His movement – it’s definitely not a party – is driven by the use of social media. He runs
most-read blog and the M5S organises on two levels – internet and local
He used the social network “meetup”, which was already active in
Italy, to set
up local support groups across the country. There are now more than 700 such
meetup groups, with more than 100,000 members.
too, the establishment and the state is also mired in a variety of scandals.
The old politics is dying right across Europe
and further afield as the recession coincides with a crisis at the top.
A new politics, a democratic transformation of political systems, is not only possible – it’s absolutely necessary.