Italy will need a bailout argue the doomsayers and superficial analysts of the economic media. Actually Italy has always had debts. Large debts, but stable. After all, it has to carry the under-developed South and it can hardly divest itself of half its own terrain - that would be geopolitical madness even if it would instantly get rid of the debt problem. Same with Greece vis a vis Europe. Debt is the cost of territory, essential territory for European security.
Italy doesn't really need a bailout but it would be a political game-changer if it used these superficial economic arguments to take one. The conditionality demanded by the European Central Bank would wipe out the entire political programme of the Partito Democratico, that unpleasant alliance of aging communists and their trade union masters, socialists and Shirley-Williamsy former Christian Democrats, LGBT activists, and social pressure groups with partial and idiosyncratic agendas.
After the bailout there would be no anti austerity programme, no alternative route to growth, no going back to the berlusconian free for all and no holds barred (sorry, didn't mean to be vulgar). Italy has already been given an outline of what is required, in August 2011, by Trichet, countersigned by the incoming ECB president. Monti has concentrated on putting public finances in some sort of order. He has already said that next must come the 'social forces' and the reconciliation of their demands with economic necessity. A bailout would be the ideal backdrop to dealing with 'the social forces'.
Angels expects the advancing of the German model of the Grand Coalition, in Italy as well as in Germany, for next year's parliamentary elections. And the German model integration of trade unions into business and government; but if so, it's the death knell for the wilder shores of Italian politics and practise.
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I read elsewhere that some of the Italian (and Spanish) regions may have something to say about all this.
Plus, I remain to be convinced that the Bundesbank, the German Government, and the people would be willing without a fight to cede their political and fiscal sovereignty to the Grand Project being overseen by a bunch of self-appointed and unelected bureaucrats in Brussels.
Spain has autonomous regions doesn't it? Italy only has Sicily and another, Piedmont? Trieste? in the north. Not sure. You are right, there has been trouble with Sicily (surprise, surprise) but they are having fresh elections as the last lot were made to resign by the central government. Usual thing, corruption, association with the mafia, 'borrowing' , ie with no intention and/or capacity to pay back. Monti has actually abolished great tracts of provincial government - it was just jobs for the boys - so perhaps Spain's regions are causing trouble but not Italy's, after all they've just been awarded all the provincial governance that didn't go to the cities and towns.
As for the German court, the government seems very sure they can't put the kibosh on bond buying. And at the next elections the SDP may well go into coalition with the CDU, and the Chancellor remains for another four years. After all, from the elites' viewpoint, what's not to like about the Project? It was just a bit of a shock for them at first that it applied to Germany too, in all its aspects.
I wonder why Weber didn't take the ECB. Then they could have had a Europe-wide Bundesbank. Now the B is looking a bit diminished, a bit knuckled-under. I don't think they meant that to happen, the German politicians telling them they're only the central bank of a member-state, not the government of Germany.
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