Political uncertainty, and mainly the lack of any realistic political way out, is not only causing turbulence in Italy, but it is also shaking up all of Europe. By all accounts, not only will the populist and anti-European current represented by the Northern League and the Five Star Movement not recede, but rather it will grow in the run-up to expected elections.
As in Greece in 2015, the real dilemma in the elections will be yes or no to the euro. The new, particular nationalism that has been developing over the last years in Europe will dominate a country that is of great significance for the future of European unification, overturning any planned changes.
We find ourselves once again faced with a new period of instability, with many unpredictable variables, especially for a country like Greece, which is preparing to leave the bailout regime and to cover at least part of its borrowing needs from the markets.
Already, the signals are catalytic regarding the course of Greek bonds. With that in mind, the return to the markets, to fill out the cushion that we need in the post-bailout era, is for the time being prohibitive.
It is not by chance that, confronted by this situation, even Mr. Tsipras, who has raised the banner of a clean bailout exit, in addressing the Hellenic Federation of Enterprises (SEV) underlined that after recent developments, “everyone understands that the decisions we shall take must correspond to the challenges and needs of the period”.
“When you take a patient out of intensive care, you do not make him run a hundred yard dash,” he said.
We shall soon learn precisely what the PM had in mind. Yet, it is obvious that the warnings that we have heard for some time about the need to obtain a precautionary credit line were well-founded. The credit line may not have fit into the political planning of the PM’s office, but reality is often quite different than one’s designs.
The Italian crisis and its repercussions prove once again that political leaderships, if they want to confront the challenges of the times, are obliged to look at developments not with partisan blinders of the moment, but rather based on the broader interests of the country, the economy, and society.