Italy’s partners in Europe are angered by Rome’s apparent inability to bring its debt mess into order. Silvio Berlusconi’s failures and a state of political paralysis have allowed the country to slide to the center of the European financial crisis. The opposition appears to be powerless and many wonder if the Italians are still capable of solving their problems on their own.
That statement glosses over a phenomenon that is already occurring. There have indeed been protests in Italy — and when the whole world followed the lead of Occupy Wall Street, the demonstrations in Rome turned violent — and unions are threatening to carry out a general strike. While politicians around the world praise various measures taken — the haircut of Greek debt, the increase in funds to the euro safety net known as the European Financial Stability Facility (EFSF) and a commitment to better capital ratios for banks — as steps in the right direction, nothing has changed on the Italian front of the European financial crisis. The interest rates the country will have to pay in order to refinance its €1.9 trillion ($2.7 trillion) national debt remain at drastic levels.
Italy has seemed incapable of moving forward for months, primarily because its prime minister is not only entangled in his own private affairs, but also heads a coalition in danger of collapsing at any moment.