John Lloyd

The pace of European disintegration continues to quicken. Recession deepens in the 17-member euro zone; it is now the longest downturn since the currency was launched in 2000. In Italy, a new left-right government, launched on an anti-austerity program, finds the neighborhood more austere than it had hoped. In France, Maurice Levy, boss of the advertising giant Publicis, did a survey showing that northern Europeans – Poles, Germans, Brits – were moderately optimistic while southerners – Spaniards, Italians, Greeks and the French – were deeply pessimistic. France dipped into recession earlier this month, for the third time in four years. The union is pulling apart.

Nothing brings relief. In the Netherlands, a TV show persuaded the country’s deputy finance minister, Frans Weekers, to watch clips of Bulgarians boasting about how they had defrauded his country’s government of welfare benefits. Bulgarians and Romanians, the poorest members of the European Union, will be able to move to any state in the EU next year. What had been presented to the poor as a new freedom is now an imposition for the rich.

Those who have been most enthusiastic for the union now proclaim that it is in grave danger. In an interview earlier this month the financier and philanthropist George Soros said European leaders, in trying to find exit routes from the crisis, have “generated political dynamics that are leading toward the EU’s disintegration.”

“Euro-skepticism” – Euro-fury is more like it – has grown. A survey by the pro-EU European Council on Foreign Relations (ECFR) shows that:

“[S]ince the beginning of the euro crisis, trust in the European Union has fallen from +10 to -22 percent in France, from +20 to -29 percent in Germany, from +30 to -22 percent in Italy, from +42 to -52 percent in Spain, from +50 to +6 percent in Poland, and from -13 to -49 percent in the United Kingdom.”

Let’s begin with two glimpses of the workings of the Italian state.

First, it was announced last week that passengers would be required to mount a bus only at the door in the front, and pay the driver on entry. The present system, in which tickets are bought in cafes and other shops and stamped at machines on the bus after entry from any one of several doors, has resulted in such widespread evasion that it’s calculated that only a minority of riders buy tickets on publicly owned buses. In Naples, three out of 10 play by the rules. The wonder is that three bother to pay.

Second, the ruins of Pompeii, buried by lava from the volcano Vesuvius in 79 AD and thus preserved as a Roman town, is one of the world’s wonders. It is also among its worst-preserved wonders. The Italian authorities have taken such poor care of it that several buildings have collapsed, and much-needed European Union money has been withheld because of the bureaucratic chaos.

The Italian state is one of the most swollen in the democratic world. It has some 330,000 police officers in a dozen different agencies, more than any other country in the EU and twice the number in the UK, which is slightly bigger in population. The private sector in health, education and welfare is tiny. The administrations, at district, city, provincial, regional and national levels, have their own councils, bureaucracies and, in many cases, police forces.

Jim O’Neill, head of Goldman Sachs Asset Management, thinks Beppe Grillo and his Five Star Movement is a greater threat to Europe and the euro than the trials of little Cyprus. That’s because Grillo received more than a quarter of the votes in February’s election in Italy and has since gridlocked the political system by refusing any dealings with the established parties. A government can’t be formed.

O’Neill warned that if growth does not come soon to the euro zone’s third-largest economy, stalled for longer than any other in Europe, even more people will start to support Grillo’s movement and its call for a referendum on membership of the euro zone. What, he asked, does Grillo think? His response: “Does anyone really know?”

I do, Jim.

Grillo and his collaborator, the slightly mystic Gianroberto Casaleggio, believe that the Web is the new form of democracy, infinitely superior to the representative parliamentary kind in which, they say, leaders frame the politics and politics fail the people. The Five Star Movement, said Casaleggio in a recent book, believes the word leader “is a word from the past, a dirty word that leads you astray. Leader of what? It means that you attribute intelligence and the power of decision making to others, so you aren’t even a slave, you’re an object.”

In a parliamentary election this week, a majority of Italian voters – some 60 percent – chose parties that even a cursory glance could tell had no coherent idea of how to run an advanced and complex state (let alone Italy). Forty percent voted for two groups that have a recognizably sensible approach to governance, the largest of which is mainly made up of the Democratic Party, heirs to the former Communist Party of Italy. In one of the smaller ironies of the election, these heirs of an anti-capitalist, anti parliamentary revolutionary ideology were regarded, especially by investors, bankers and politicians of both the center-right and center-left, as Italy’s greatest hope for constitutional and market stability. 

Just under 30 percent of the vote went to the coalition put together by Silvio Berlusconi, a man not exactly proven at being able to govern Italy well. He is yesterday’s but also tomorrow’s man, who saw his run for office – once regarded as something of a joke – embraced as he promised to return, in cash, citizens’ payments of a property tax for which his party had voted; asked a young woman how often she climaxed; and remarked, on Holocaust Remembrance Day, that former dictator Benito Mussolini, whose racial laws condemned thousands of Italian Jews to concentration camps and death, had done some good things in his time. He didn’t win, but nearly did; which means he remains a major power in the land.

Tim Parks, the British writer who has married and lived for most of his life in Italy, wrote of his adopted people that “nonchalance is perhaps their greatest (talent)”, and continued: “Berlusconi’s political instincts mesh perfectly with the collective determination (of Italians) not to face the truth, which again combines with the deep fear that a more serious leader might ask too much of them. … Only in a country where tax evasion is endemic can one appeal to evaders at the expense of those who pay taxes.” 

Storms in the Mediterranean, calmed in the latter half of last year, now whip up again. Greece’s woes hardly surface in the rest of the world now, but they’re deep and the people remain restive. Seamen struck last week over unpaid wages and extended the strike this past Sunday. The strike cuts off the many islands around the country, and limits exports and imports. For a country so defined by the sea and shipping, it takes on an iconic quality. A 24-hour general strike has been called for Feb. 20: Golden Dawn, the far-right party that targets immigrants and that stands third in the polls, held a thousands-strong rally in Athens on Saturday. No one can say whether the lid will stay on until matters improve – or, indeed, if matters will improve.

Greece’s recent history makes its troubles largely discounted internationally. But along the world’s most famed stretch of water, from which both European and Middle Eastern civilizations drew their inspiration, is Spain, a much larger economy, a weightier state, one whose Spexit could not be contemplated, which is why its failing banks received special care and attention from the European Central Bank to stay in business.

Mariano Rajoy, Spain’s prime minister, had been neatly packaged by the news media as “dull but honest” – one who would apply himself with patience and a clean conscience to the hard grind of leading Spain out of its post-bubble miseries. That narrative was brought to an end last week with the publication in the daily El Pais of details of the parallel accounts that one of Rajoy’s former colleagues, the onetime treasurer of the center-right People Party (PP), Luis Barcenas, had kept. These purport to show that Barcenas had paid out generous and secret amounts, from a Swiss-based slush fund, to senior party officials, including Rajoy. Barcenas, treasurer from 1990 to 2008, had already resigned because he appears implicated in a separate scandal involving kickbacks to PP officials in return for public contracts.

Truly, Britain is not just a bad European, but a very annoying one. David Cameron half-admitted as much in his speech in Davos Wednesday, when he quipped, “frustrated as [our European partners] no doubt are by Britain’s attitude.”

The U.K. joined the European Union late, spending more than a decade after the end of the World War II arrogantly believing that Europe was too small for it. When it did join under a Conservative government, the next Labour government under Harold Wilson demanded a renegotiation and a referendum on membership – which produced a fairly convincing yes.

Another Conservative government was elected in 1979, under Margaret Thatcher. It brought endless conflict with Brussels. Thatcher lost her leadership, partly because of a battle within the Conservative Party over Europe. Her successor, John Major, took the UK into the European Exchange Rate Mechanism – then abruptly left it in 1992. Labour came back in 1997 with a European Union enthusiast, Tony Blair, as leader – but wouldn’t adopt the euro. These days, the Tories are back and are deeply skeptical. This week their leader, Prime Minister David Cameron, took a leaf out of Wilson’s book, demanding a renegotiation and then a referendum on membership.

In today’s Europe, no political leader is charismatic. Not one.

Francois Hollande ascended to the French presidency by deliberately proposing himself as “Mr. Normal” after the excitements of Nicolas Sarkozy. Mario Monti was persuaded to take the post-Berlusconi premiership because he was one of the cleverest and most responsible men in Italy. He proves it, by giving press conferences that last for hours, to the exhaustion of the Italian press corps, laying out fact upon fact. Mariano Rajoy of Spain prefers to be as near to invisible as a prime minister can be: a portrait of him last month in the left-leaning El Pais described him as “keeping as low a profile as possible.” Donald Tusk, prime minister of Poland, is popular and a feisty debater: but he’s generally described as a “pragmatic centrist,” and is out-charmed and out-looked by his foreign minister, the British-educated Radoslaw Sikorski.

David Cameron manifests an occasional flash of raffish charm. But these are austere times, and the champagne lifestyle in which he indulged at Oxford’s Bullingdon Club for the Well-Heeled Drinking Man is never on show.

The capstone of this band of modest men is a woman, Angela Merkel, chancellor of Germany, one for whom the grand rhetorical gesture, the striking phrase, the public display of temperament, seem alien – a legacy, perhaps, of her upbringing as a Lutheran pastor’s daughter in the dourly Communist state of East Germany, where the lower the profile, the better. As the de facto leader of Europe, Merkel relies on her country’s power and her own, so far excellent, political instincts and maneuvers.

Germany is the economic hegemon of Europe ‑ not a position it has sought, but a greatness thrust upon it by its own industrial efficiency and cautious financial policies. The weakness of (especially) the southern European states also helped, as did those states’ years’ long binge fueled by cheap credit that Germany, among other states, provided. Now, as with all binges, there is regret, huge headaches and New Year’s resolutions never to be much better in the future.

Angela Merkel, the careful, modest first-woman chancellor is the most obvious symbol of the new hegemon. In Europe, newspapers and some politicians of the left and right stoop so low as to lard their journalism and allusions to her with increasingly overt reference to “Panzers” and “Third Reich.” In her own country, presently, the reverse: She rides high in the polls, far above any other figure, so much so that it seems as if there is no alternative – a phrase once used by that other first-woman leader, Margaret Thatcher.

Merkel’s stature has grown in a way that is rare for leaders other than U.S. presidents. She’s powerful because of what she does beyond her country’s borders. She has ridden the waves and storms of the past two years and has struck a middle course – pressing radical change on the debtor countries, largely in Europe’s south, but supporting them (crucially, the ailing Greece) when required. She has reminded the electorate at home that Europe must be saved if Germany is to prosper but has appeared hard enough in her demands for restructuring of the economies of debtor states to deserve the soubriquet of the Iron Chancellor. Her Christian Democratic Union party is also far ahead of the Social Democratic Party, at some 41 percent.

The great Italian caricaturist Altan had a cartoon on the front of La Repubblica last week, in which an Italian is sinking below the waves, shouting: “I’m drowning!” On the beach, a fat man whose swimsuit sports the German national colors, says: “Zat is how you learn, zpendthrift!”

This in a left-of-center daily that is supportive of the crisis plan of Italian Prime Minister Mario Monti and has set its face against anti-German populism. The press of the right has been less restrained: A recent front-page photo of German Chancellor Angela Merkel showed her with a hand upraised, perhaps to wave — but vaguely reminiscent of Adolf Hitler’s minimalist Nazi salute, with the headline “Fourth Reich.” The article claimed that two world wars and millions of corpses were “not enough to quiet German egomania”. This in Il Giornale, a Milan daily owned by the Berlusconi family.

I smiled at the Altan cartoon on an Italian beach, where I was last week, looking about for signs of desperation. They were not dramatic, but observable. Simply, fewer people came. The soaring cost of petrol, which went over the 2-euro mark for a liter, was generally held to be the main culprit for the reduction in the annual hunt for the sun. It was little problem to hire a beach umbrella, to book a table for dinner, even to park. While most summers the political news is absent or silly, this year the Italian papers chronicled, daily, the fever chart of the Italian and European economy, and it was febrile indeed — now a spurt of optimism, now a stab of doom.

The great Italian caricaturist Altan had a cartoon on the front of La Repubblica last week, in which an Italian is sinking below the waves, shouting: “I’m drowning!” On the beach, a fat man whose swimsuit sports the German national colors, says: “Zat is how you learn, zpendthrift!”

This in a left-of-center daily that is supportive of the crisis plan of Italian Prime Minister Mario Monti and has set its face against anti-German populism. The press of the right has been less restrained: A recent front-page photo of German Chancellor Angela Merkel showed her with a hand upraised, perhaps to wave — but vaguely reminiscent of Adolf Hitler’s minimalist Nazi salute, with the headline “Fourth Reich.” The article claimed that two world wars and millions of corpses were “not enough to quiet German egomania”. This in Il Giornale, a Milan daily owned by the Berlusconi family.

I smiled at the Altan cartoon on an Italian beach, where I was last week, looking about for signs of desperation. They were not dramatic, but observable. Simply, fewer people came. The soaring cost of petrol, which went over the 2-euro mark for a liter, was generally held to be the main culprit for the reduction in the annual hunt for the sun. It was little problem to hire a beach umbrella, to book a table for dinner, even to park. While most summers the political news is absent or silly, this year the Italian papers chronicled, daily, the fever chart of the Italian and European economy, and it was febrile indeed — now a spurt of optimism, now a stab of doom.