In the broad sweep of things, the resignation of yet another Italian prime minister would barely seem to warrant a headline. Italy changes its governments with the same frequency that others change their socks. Berlusconi survived longer than most. In lasting less than a year, Romano Prodi is just a return to form.
Seeming paralysis in government is matched by a growing sense of despair about the economy. The public finances are now completely out of control, with total public debt well over 100 per cent of GDP. Structurally, the country has totally failed to prepare for globalisation, leaving its manufacturing sector cruelly exposed to Far Eastern competition, and its business services industries so far behind Britain and other post- industrial societies that it is hard to see how they might catch up.
More so than perhaps anywhere in the eurozone, Italy needs galvanising political leadership and radical structural reform. Berlusconi was ineffective and only in it for his own good. Romano Prodi has proved little better. Given the constraints of the political system, which makes winning a clear mandate all but impossible, it is hard to see where salvation may come from. Italy still has la dolce vita, for which there is much to be said, but for how much longer given the current outlook for the economy?
It is amazing how Italy is always approaching the economic or political abyss but never actually seems to get there.
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