Italy is facing its worst crisis since the Second World War

Emma Marcegaglia, the head of Confindustria, which represents the giants of Italian industry, sounds like a very sensible woman. She said recently: “The country is now in the abyss. The situation is untenable. Efforts will be in vain if we do not manage to restore the credibility we’ve lost in the eyes of the international institutions. We must do so immediately, within hours.”

La dottoressa Marcegaglia has in fact been saying more or less the same thing for months, but has anyone been listening? Well, not quite the same thing: until recently, she said Italy stood at the edge of the abyss. Now it is in the abyss. There is a difference.

It is also interesting to see that she talks of the necessity of immediate action. But this is Italy – so don’t hold your breath. Last time the UK had an election, there was a long wait for a new government, of, I seem to remember, two or three days, instead of the usual few hours. But in Italy they like to take things slowly and do things properly. First Berlusconi will have to resign. Then the President of the Republic will have to invite all the leaders of political parties to the Quirinal Palace for consultations: Italy has a lot of political parties, so that will take days. Then the President will ask someone to form a government, which will lead to a further round of protracted negotiations. Everyone seems agreed that Italy needs a new technocratic government, and thy even seem agreed on who will lead it, but Mario Monti is unlikely to be sworn in much before Christmas. By which time, I confidently predict, dottoressa Marcegaglia will have pulled her hair out in rage and frustration.

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For anyone who knows Italy, the fact that the stark warnings of someone of Marcegaglia’s stature can be ignored and ignored for so long, comes as no real surprise. Italy is used to crises. Is this one different? Won’t it survive this time as it has always survived? Surely things will limp on much as before?

There are a few signs that the glacial process of creating a new government may move up a gear. Mario Monti has already been created a member of the Senate. If we get a Monti government by next week, the it will be a sign of nothing short of a political earthquake.

One thing that no newspaper has yet examined is the question of how this will affect the Vatican and its finances. The Vatican Bank, properly called the Institute for Religious Works (Istituto per le Opere Religiose), has had its difficulties in the past. All religious orders have to bank with the IOR (Italians love acronyms), and presumably this money is invested in things like government bonds. Might the IOR be badly exposed to an Italian debt default? If the unthinkable happens, and Italy does not get itself out of the abyss, how might this be felt on the other side of the Tiber? Is there a nightmare scenario that keeps those responsible for the Vatican bank awake at night? Let us hope not – and let us hope too that the sensible people in Italy will prevail, their advice be heeded, and the country emerge from the abyss it currently finds itself in.

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