Italy’s Silvio Berlusconi offers to leave office

“There is no alternative….”

Margaret Thatcher

According to the New York Times, Italy’s battered and irrelevant Prime Minister Silvio Berlusconi:

…offered a conditional resignation on Tuesday, agreeing to step down but only after Parliament passes an austerity package — before the country will go to early elections, government sources said on Tuesday evening.

The move comes in the face of an escalating debt crisis that has hobbled Greece, threatens Italy and could infect the rest of Europe.

Infect? Italy’s national crisis is also a significant component of the Eurozone’s system crisis. It is not an agent external to the Eurozone. Italy is Europe’s third largest economy. Because of Italy’s size and importance, it should come as no surprise that:

Speaking after a meeting of European Union finance ministers in Brussels on Tuesday, Olli Rehn, European commissioner for economic and monetary affairs, said Italy’s economic and financial position was “very worrying.” He added that the European Commission was “concerned about the situation and we following the situation very closely.”

Ironically:

“‘The problem in Italy is not primarily the real data,” Germany’s finance minister, Wolfgang Schaüble, said in Brussels on Tuesday. “The debt is high, the deficit is not — economic data are not that bad. The problem is a lack of trust from the financial markets and that of course is a realistic situation. And this trust has to be strengthened.”

It is a matter of “trust,” and thus, in the first instance, “a political crisis as much as an economic crisis,” as David Dayen points out. Finance capitalists across the world just do not trust Italy to resolve its problems, to solve them, in other words, to their satisfaction. This mistrust is contagious. The economic crisis is a political crisis because Italy’s sovereign debt crisis, like those found in Greece, Spain, Portugal, Ireland, etc., ineluctably threatens the core institutions of the Eurozone system. Whence the Euro, we might wonder, when so many national economies collapse?

To be sure, Italy’s sovereign debt crisis will not spare Italy’s political institutions and political culture. The imposition of an austerity regime on Italy will necessarily modify its political institutions, and thus kinds of politics Italians can feasibly give themselves in the future. Alterations of this sort are features of the austerity project. They amount to an economic and political constraint placed on Italy’s democratic institutions.

From the part to the whole: The Eurozone’s political crisis — will it exist tomorrow, the day after? — also helps to determine its financial crisis. After all, imposing austerity regimes on Italy and Greece will fail to resolve the Eurozone’s economic problems. It will, at best, transform them into a diminished quality of life for many living in those countries now suffering sovereign debt crises. This ‘best case’ outcome will, in turn, merely create another political problem for the Eurozone and, naturally, for those countries forced to endure an austerity regime. Europe’s transnational institutions and some of its national institutions will appear less than sufficiently rational and thus able to provide in the future an acceptable standard of living for many living in the Eurozone. In fact, this rationality deficit has already appeared as such: The Europeans and the G-20 have no answers, according to Barry Eichengreen. Consequently, “[t]he republic of the centre [in Europe] has institutions and media behind it, but it is tottering,” according to Serge Halimi. Armies await their orders, for civil order — Which civil order? Whose civil order? — must be kept intact even if the new transnational order demolishes the lives of millions.

Chairs moving around the deck

According to a New York Times report:

After crisis talks on Sunday night, Prime Minister George Papandreou and his main rival agreed to create a new unity government in Greece that will not be led by Mr. Papandreou, according to a statement released Sunday night by the Greek president, who mediated the talks.

Mr. Papandreou and the opposition leader Antonis Samaras agreed to meet again on Monday to hammer out the details. The name of the new prime minister is not expected until then.

The new government is intended to govern for several months to put in place a debt agreement with the European Union, a step European leaders consider crucial to shoring up the euro. Then it is to hold a general election and dissolve.

The new government will unify around imposing a new austerity regime on Greece. It will exist only to serve that end. To be sure, this will not be an all-inclusive political settlement. After all, the government will not include representatives of the Greek protesters who have made their will known on this matter. It will merely be a unified Greek elite who will stand alongside of European Union political elite.

Quote of the day

Alexander Cockburn avers:

I’ve no doubt that if by chance the left in Greece today were to evict the local political agents of the international banks, it would not be long before a NATO intervention, covert and then overt, was under way, using the usual arsenal of assassination, drone attacks and armed support for whatever security forces do not defect to the left.

Quote of the day

Greece remains roiled by the imposition of an austerity regime on the country. This regime has been and will continue to be harsh medicine for most Greeks. Greece’s political elite have shown themselves to be impotent when confronting the crisis, as Patrick Cockburn illustrated in this report:

The general strike and the parliamentary vote on reforms demanded by international creditors came before a European Union leaders’ summit, when Greece should receive €8bn — without it, the country will run out of money by November. In parliament the Finance Minister Evangelos Venizelos told MPs that Greece had no choice but to accept fresh hardships. “We have to explain to all these indignant people who see their lives changing that what the country is experiencing is not the worst stage of the crisis,” he said.

“It is an anguished and necessary effort to avoid the ultimate, deepest and harshest level of the crisis. The difference between a difficult situation and a catastrophe is immense.”

But for many Greeks, the catastrophe has already happened and protests increasingly involve the well-educated middle class. The strike yesterday involved air-traffic controllers, tax officials, pharmacists and doctors — as well as taxi drivers, dock workers and garbage collectors. Schools were closed and hospitals were only open for emergency cases. Every street in Athens has a heap of rotting rubbish on it despite a court order to the public service union to end its strike.

What Mr. Venizelos seems unable to understand is the nature of the disturbance in the streets of Athens. The strikes and street fighting are not features marking the final phase of Greece’s political crisis. They are manifestations of an insurgency that spans the globe and promises to endure long into the future.

Quote of the day

Writing for In These Times, Michelle Chen reports:

Everyone knew it was a losing battle, but everyone showed up anyway. In an uprising virtually unprecedented in its size, scope and diversity, malcontents united across Greece to push back against the government’s assault on working people.

This week’s 48-hour strike drew workers from both public and private sectors, students, the unemployed — just about everyone about to get smacked with the austerity measures that the Parliament has approved under pressure from IMF and Eurozone officials. With tens of thousands of civil service jobs to be downsized, pensions and wages to be gutted, and labor and civil rights under siege, the people’s upheaval has proven as severe and persistent as the fiscal butchery that politicians keep ramming down their throats.

People took to the streets because they had nothing to lose. As one protester, civil engineer Vagelis Filezis, told CNN, “We have no hope. The only hope we have is the strength of the people.”

Greeks defend their society against the EU

A General Strike in Greece

Quote Of the day

Mark Weisbrot, a co-Director of the Center for Economic Policy Research, recently took to task the United States and the European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF). The United States is the key member of the IMF and is thus responsible for its actions. Weisbrot criticized them because “They were trying to force the Greek parliament to adopt measures that would further shrink the Greek economy and therefore make both their economic situation and their debt problem worse, while inflicting more pain on the Greek electorate.” But it is not just the Greek economy which is in crisis. “The threat from the Troika,” Weisbrot argued, “was putting the whole European financial system at risk, since it raised the prospect of a chaotic, unilateral Greek default.”

What we are seeing here, then, is a triumph of ideology and interest over reason and solidarity.

Weisbrot drew an obvious conclusion from his analysis:

The “European debt crisis” is misnamed; it is not so much a debt crisis as a crisis of policy failure. There are always alternatives to a decade without growth, trillions of dollars of lost output, and millions of unemployed that the European authorities are offering to the people of Spain, Portugal, Ireland, Greece and now Italy. All that is lacking is the political will and competence to change course.