Italy’s Perfect Political Storm

In the aftermath of Italy’s recently concluded election, no one knows who can and will govern the country. In fact, the best solution looks like an orderly one-year interregnum – marked by a couple of important reforms – and then a new vote in the spring of 2014.

MILAN – In the aftermath of Italy’s recently concluded election, no one knows who can and will govern the country. In fact, the best solution looks like an orderly one-year interregnum – marked by a couple of important reforms – and then a new vote in the spring of 2014.

The first reform to be enacted is a big cut in the number and income of national and regional politicians and of top civilian and military bureaucrats, who in many cases are the best paid in the world. The savings would not be huge, but the moral significance would be, for the recent divided vote delivered a clear verdict on at least one issue: the public’s loathing for the country’s elites.

But can Italy afford another year without an effective government? The initial reaction by international observers and investors has been one of deep concern, with the interest-rate spread on Italian debt relative to German debt widening sharply. With no parliamentary majority possible, a weak caretaker government is inevitable.

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