The summoning by the Italian president of an ex-IMF director, nicknamed 'Mr Scissors,' to the presidential palace, in defiance of voters who wanted an end to austerity, shows democracy is put on hold when the 'markets' demand it.
Just imagine that Jeremy Corbyn's Labour Party won a general election in Britain on a program of spending £100bn-plus in order to stimulate the economy after years of government cutbacks and under-investment. Corbyn, wearing his very best suit, went to Buckingham Palace to meet the Queen, but Her Majesty, after having the PM-elect served with tea and biscuits, informed him that she would not accept his proposed chancellor of the exchequer, John McDonnell, and instead put forward alternative names.
Savona is a veteran Eurokeptic and has said that joining the euro was a "historic error" for Italy. President Sergio Mattarella vetoed Savona because he believed his economic program could threaten Italy's membership of the euro. It's true that the proposed €100bn-plus spending program would smash the EU's three percent budget deficit ceiling, but that tells us as much about the budget ceiling and how restrictive it is as it does about the merits of Savona's program.
Cuts in public spending have increased unemployment, which in turn has increased the deficit, which has led to more cuts, and so on and so on. Italy's National Debt is now 132% of its GDP. Although growth rates are now positive, its average annual rate of growth from 1999-2016 was zero. With 31.7% youth unemployment, La Dolce Vita and Ryan Paris's catchy song, is a long distance memory.
The tragedy is that it was all so predictable. One man who warned what Europe was letting itself in for in the rush to squeeze as many countries as possible into the Eurozone, was the late Labour politician Peter Shore, the UK's secretary of state for economic affairs from 1967-69 and trade minister from 1974-6.
The problem is not that the idea of a single currency for European countries is a bad one. It's the way the whole thing was implemented. Perhaps the architects of the Maastricht Treaty thought that with the demise of the Soviet Union they could restructure Europe's economies to be more banker-friendly. The center-left meanwhile could be bought off with 'add-on' measures such as the 'Social Chapter.' But what's the use of the 'Social Chapter' if you don't have a job to go to in the first place?
By blocking the appointment of Savona, Italian President Mattarella, appeared – at least earlier in the week – to have made matters a whole lot worse from a Europhile perspective. On Tuesday, the euro dropped to its lowest level against the dollar for 10 months. But the Milan stock market did rise 1 percent on Wednesday, with reports emerging that Five Star and the League could yet form a government, albeit without Savona.
The words of Donald Tusk and Jean-Claude Juncker have been more emollient, and Oettinger himself has apologized for what he said, but you could say the damage has already been done. If Italy's voters were Euroskeptic before last week, they're even more so now.
The date of Shore's letter? December 14, 1993.