SINOGRAPH China can fiddle as Rome
burns By Francesco Sisci
ROME - Is there any chance that Italy, as
we have known the country since the end of World
War II, will survive the current crisis? I don't
think so, and the consequences of this could
reverberate as far as to China.
Italy as a
political unit is an invention of the 19th
century. Before that, it was the center of the
Roman empire with the then capital of the world,
Roma caput mundi, squeezed between the
Gauls of the north and the Greeks of the south;
during the Renaissance, it was a was a motely
group of very rich and very belligerent states,
and for 2,000 years, it was the more or less
chaotic geographical space around the Holy See.
Before 1945, Italy was united as an
extension and the ideal
framework of the Savoy
dynasty, a semi-French statelet, developed largely
outside the historical mainstream of the
Peninsula.
Now, Italy could turn back into
its former political entity - and in the aftermath
of the huge crisis sweeping Europe, that is
possible to occur.
In fact, there are only
two options on the table, and both lead to a
radical restructuring of the country.
After June 17, the date of the Greek
elections, the Germans will decide whether to
remove Greece from the eurozone.
If they
do so, the euro crunch would likely intensify and
Italy might also be ejected from the euro. Then
inflation, debt, capital flight, unemployment, and
violent social protests could soon turn the
country into a new version of Argentina in the
late 1990s - or worse.
If conversely the
Germans keep Greece in the euro, Italy would also
be safe. Yet Italy, like Greece, will have to be
made safe, that is the Germans and other Europeans
must be assured that Italians and Greeks will pay
their debts, and thus some of Rome's political
powers will have to be transferred to Brussels.
In fact, Italian Prime Minister Mario
Monti is not managing and would not - or could not
- do what had been called on to do: radically cut
costs and dramatically shrink the debt by
decreasing public expenditures, reducing for
instance the salaries of MPs, and privatizing
large state assets.
So, six months after
Monti took office, Italy is now in practice in the
same position as a year ago, during the Silvio
Berlusconi government. Surely, something has been
done - the country is more presentable - but
meanwhile the crisis in Europe has deepened and
the risks have increased. Therefore the results of
these six months are barely sufficient to bring
Italy back to where it was.
Then with
option 1 (that Italy will exit the euro), social
chaos will sweep the old economic and political
establishment. This could bring to power comic
actor turned radical politician Beppe Grillo (he
scored a major victory in recent local elections)
or a character more fundamentalist than him,
because the crowd once aroused often devours its
own ring-leader.
With option 2 (Italy
remains in the euro, but Brussels takes the
reins), the Italian establishment will also be
upset because it is not possible for an Italian MP
to have a salary higher than his German colleague
- the Italian will have to take, say, half as much
as a German MP. Germany or Brussels could require
a drastic program of privatization and a major
reduction of the Italian, Greek or Spanish
bureaucracy.
Certainly option 2 is better
than the first because in the second there's the
hope that something will remain of the old order.
In the first scenario, Greece, Spain or Italy
could become a sort of tabula rasa. But
option 2 is not easily accomplished because the
devolution of powers from Rome to Brussels must be
consensual, and it is not possible to think that
Brussels will send a military governor to take
charge of Rome, Madrid or Athens.
To
obtain option 2 instead of option 1, there is not
much time - actually only a few weeks. On June 28,
an EU summit will deliberate on the fate of euro
and after that most stock traders will go on
holiday. It will be a time when a few trade
movements can create significant volatility in the
markets. It was the summer stock exchange that
brought down Berlusconi last year.
At this
juncture, Monti is failing, no matter why or how,
he should push his way forward, but he doesn't, he
can't because he lacks the necessary mettle or is
being continuously obstructed by all the forces
trying to salvage the old status quo. The
political parties behind him are even worse
failures, as they try to save themselves and not
the country. Then the result could easily be that
Italy will follow Greece into the hell of social
and political chaos, which mirrors the confusion
of the southern shore of the Mediterranean.
But Italy is not Greece or Spain, and
chaos in Italy means the near certainty of an
economic crisis worse than that of 2008, which was
sparked by the bankruptcy of Lehman Brothers.
Italy is far more important than Lehman. This
chaos, which could have a devastating effect on
the US economy, it would also undermine the
possibilities for the re-election of Barack Obama
in America and further undercut the already
fragile political fortunes of chancellor Angela
Merkel in Germany. Moreover, the specter of
Grillo, perhaps the modern movement that most
resembles old fascism, shakes the confidence of
many well meaning Italians.
The economic
and political chaos in southern Europe would
create spaces for previously unthinkable new
geopolitical competition. Russia could come to the
rescue of Greece and create an axis of the
Orthodox faith that embraces Athens and reaches up
to Belgrade, standing then in the heart of the
Mediterranean, a place she always wanted but
always failed to reach.
Moreover, Saudi
Arabia, Qatar or their satellites could help Spain
in exchange for transforming the deserted
skyscrapers of the local busted real-estate bubble
into minarets. This could lay the foundations for
a Muslim re-conquest of Catholic Spain, half a
millennium after the devout Christian kings of the
peninsula wrested the place from Islam. The
political geography of Europe could revert to what
it was nine centuries ago, before the Norman's
invasion of Southern Italy. Then Islam had reached
the Pyrenees, the Byzantine Orthodox empire held
the Eastern front of Europe, the ancestors of the
western powers, the Germans and Franks, were
clasped north of the Alps and Italy was the
battleground of all forces, with Islam in Sicily,
Greek orthodox up to Naples and from Rome
northward a flimsy Germanic control.
All
of this could be spiced up by cautious yet
effective Chinese investment. Beijing dreads
chaos, thus thinks that it is necessary to
intervene early for stabilization, without
considering that this could be an opportunity for
expansion.
These perspectives perhaps are
not in the interests of Obama and Merkel - or even
France and the UK. Here serious economic problems
can become even more serious political issues.
Then an immediate intervention by Americans or
Germans on fragile Greeks, Spaniards and Italians
is possible. But across the Atlantic, there are
also those who hope that global economic
difficulties will cause Obama to lose the
election. And in this, there is a China angle that
carries the most serious consequences worldwide.
America, hit by the backlash of a European
economic default, without the continuity of the
Obama administration and without easy, short-term
solutions, might be tempted to find shortcuts,
engaging in wars that could, as traditionally wars
do, remove outstanding debts. Washington may be
hot toward Iran, or more or less cold against its
new challenger, China.
A clash between the
US and Iran, along with deepening US-China
friction, would also be useful to the two possible
beneficiaries of the chaos of Europe: Russia and
Saudi Arabia, both of which would then have a
freer hand in Europe and the Middle East.
Washington should then choose to leave
Asia to China and regain Europe and the Middle
East, or vice versa. Fighting on all fronts would
be very difficult.
In view of this, to
avoid dire consequences locally and globally, a
strong Italian commitment is essential. Given the
challenges in the coming hours and days, will the
Italians up to the task? Without a strong hand,
the situation may require a semi military
US-Anglo-Franco-German intervention to impose a
massive reorganization of the Italian finances
granting Brussels with many of Rome's powers. Will
they do it?
Will these powers look for
somebody else, besides Monti, to carry out these
plans as their proconsul on the north shore of the
Mediterranean? Will this be Grillo or will it be
somebody else? According to recent opinion polls
Grillo could get over 20% in an election, plus
over 30% of Italians would not go to the ballots
and abstain from voting. More than 50% of the
Italian population is strongly dissatisfied with
the present political situation, but the
traditional parties are unable to respond. In
addition, ruling Greece or Italy is not easy, but
this is a long-term problem, while there are
short-term issues to be addressed today.
In any case, the old Italy with its old
esoteric alchemy of small competing powers is
finished. The Italians - or better those who will
soon be the heirs of the men and women who up to
now call themselves "Italian" - should perhaps
already be thinking about the immediate, pressing
future.
Francesco Sisci is a columnist for the Italian daily Il Sole 24 Ore and can be reached at fsisci@gmail.com.
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