BRUSSELS (Reuters) – European policymakers should be asking themselves “who lost Italy” after a grassroots revolt against austerity, unemployment and the political elite caused an electoral earthquake in the euro zone’s number three economy.
Instead, most are insisting that their policy mix to fight the currency area’s debt crisis is right, even though the latest EU forecasts have pushed any prospect of meaningful economic recovery in southern Europe back into the middle distance.
A surge in support for anti-euro populist Beppe Grillo and the surprise resurrection of former Prime Minister Silvio Berlusconi on an anti-austerity platform in last week’s election have plunged Rome into political deadlock.
Italy, which had been governed by respected technocrat Mario Monti for 15 months since Berlusconi’s last government fell, is far from the worst affected by the three-year-old debt crisis.
Unemployment there stands at 11.7 percent, less than half the rate of Greece and Spain, where one of every two young people is without a job.