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Italy is now ‘in the abyss’ – and the Vatican will not escape this disaster

Italy is facing its worst crisis since the Second World War

By on Friday, 11 November 2011

Berlusconi has lead Italy into an economic abyss Photo: Dan Kitwood/PA Wire

Berlusconi has lead Italy into an economic abyss Photo: Dan Kitwood/PA Wire

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.

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.

  • Anonymous

    I sincerely hope that the advice of sensible people will not be heeded. Italy’s abyss consists of its inability to export more than it imports because its currency is shackled to a wild animal that is out of control. This imbalance is reflected in the excess of government expenditure over tax receipts. Sensible people would exacerbate this problem and cause a default in BTPs.

    Ordinary Italians, unlike their Anglo Saxon cousins, save more than they spend, which they invest in BTPs. Any default would not only affect the Vatican, but also millions of ordinary Italians.

    If Italy left the hubristic structure of the Euro, Italy would be able to honour its obligations to ordinary Italians and the Vatican, but French and German bankers would sustain huge losses on their speculative positions in BTPs as the value of the new Italian currency fell.

  • Anonymous

    The problem goes wider. Haven’t we in the UK been living in a credit-fuelled illusion of ‘prosperity’? You can’t do that for ever.

    We like to blame the politicians but would we have elected them if they hadn’t promised more of the same?

  • Anonymous

    “presumably this money [money in the Vatican bank] is invested in things like government bonds. Might the IOR be badly exposed to an Italian debt default?”

    Aside from gratuitous potshots at the Italian people, you base your whole article on a presumption? 

  • Mariano Barrientos

    No wonder the Vatican wants one goverment for the whole world

  • Liam Ronan

    E ‘finita, amico mio. La Banca centrale europea organizzerà un tranquillo colpo di stato in Italia. Non più democrazia.

  • David Lindsay

    The force that supplanted Christian Democracy in Italy is no more. After the time-honoured manner of the British Conservative Party, it was the vehicle whereby the local machines of traditionalist, religious, agrarian and related politics were taken over by committed Liberals and their voters told that they had nowhere else to go. Those Liberals were of the fiercely secular, “free”-marketeering type normal on the Continent and exemplified in Britain by Nick Clegg, and were therefore, as the heirs to the unification of Italy, closely allied to the overtly Fascist National Alliance, Berlusconi’s coalition partner. Extreme nationalism as interwoven with extreme secular liberalism has of course been routine from nineteenth-century Germany and Italy, though the era of the great dictators, to Geert Wilders and to the present Israeli Cabinet.
    National co-ordination was in the hands of Sandro Bondi, a former Communist Party stalwart. Thus was the Berlusconi movement located firmly within the international phenomenon of a Marxism which had merely changed its ending so that the bourgeoisie won, but which had retained intact its Marxist dialectical materialism, its Leninist vanguard elitism and identification of religious or other interests as “Useful Idiots”, its Trotskyist entryism and belief in the permanent revolution, and yet also its Stalinist belief that the dictatorship of the victorious class should be built in a superstate and exported, including by force of arms, throughout the world while vanguard elites owe allegiance to that superstate rather than to their own countries. Berlusconi and his court comprised one such vanguard elite.
    Others included the Partido Popolar, the Irish Progressive Democrats, ACT New Zealand, and the Australian Liberal Party as reconceived by John Howard, to name but a few. At the centre was the faction that made George Bush its brainless Manchurian Candidate within the Republican Party while paying feudal tribute to the Clintons within the Democratic Party. Remind me, how are they all doing these days? Even the takeover of Gaullism by Sarkozy and of German Christian Democracy by Merkel would now seem to be in serious trouble.
    Nevertheless, the archetype of bourgeois secular-capitalist insurgency in all its nastiness, Likud, is not only going strong, but in a classic coalition with the secular “free” marketeers who want to strip both an ethnic and a religious minority of their citizenship.
    The present Irish Deputy Prime Minister and Foreign Minister has never left Official Sinn Féin, nor has it ever left him, instead simply following and then leading it as it renamed itself the Workers’ Party, which renamed itself Democratic Left, and which then took over the central organisation and ideology of the Irish Labour Party, all the while with no confirmed decommissioning of arms until 8th February 2010, within the last 24 hours of the existence of the Independent International Commission on Decommissioning. The ailing Fine Gael, humiliated at the recent Presidential Election, is clearly now in the sights of these Leninist gangsters. They have already succeeded in turning into what was once called “the Bishops’ Party” into a vehicle for the most militant anti-Catholicism, even preparing to break by force of law the Seal of the Confessional, as only the regimes most violently hostile to the Faith have ever done.
    And the present President of the European Commission was just such a figure when he was Prime Minister of Portugal: a rabidly “free”-marketeering supporter of Bush foreign policy who had previously been a Maoist. Yes, a Maoist. Indeed, he is still just such a figure today, busily staging coups in Italy, Greece, and others yet to come.
    But will any such coup be necessary in Britain? Our vanguard elite was comprised of all three of New Labour, the Notting Hill set, and the Orange Book Tendency. If David Cameron had secured an overall majority, or if David Miliband had won the Labour Leadership, then all three of those would now be in government. As it is, two of them are in government while the third spends its time undermining and destabilising the Opposition in the Government interest. Should that present Opposition become the Government, then action against that ascendancy of anti-euro Keynesians might very well be forthcoming.
    Not that that ascendancy need be without allies and friends, notably among those whom this whole process had previously dispossessed. Most of the Italian Left has been subsumed into the Democratic Party, which has elected as its President Rosy Bindi, late of Azione Cattolica and Democrazia Cristiana. Her election, together with that of her preferred candidate for Leader, is an immensely positive sign, and she herself deserves much credit for having reached out in this way, when we consider that she lost at least one close friend to the Red Brigades. Their erstwhile supporters exist on the fringes of her major new party. But its internal electoral results leave no doubt as to where its centre of gravity lies, as to what is its mainstream.
    The Italian Democrats sit with the British Labour Party in the European Parliament, in a Group which has changed its name in order to accommodate, especially, those Democrats with Christian Democratic backgrounds. Let us hope that this fraternity will have a significant impact on the party famously “owing more to Methodism than to Marx”, the historic British vehicle of Social Catholicism, and still the preferred electoral choice of the clear majority of British Catholics.
    Many post-War Italian Christian Democrats identified strongly with the Attlee Government’s domestic programme, although they also wished to see an Italy outside both NATO and the Soviet Bloc, a bridge between East and West. Domestically and internationally, and complete with the strong admiration for British Labour at home, such was also Jacob Kaiser’s post-War vision for a reunited Germany. A vision, sadly, never realised. Not yet, anyway.

  • Jacques

    The politics who allowed the debt to grow up to crazy levels are liars and criminals. When the debt of a humble american family becomes unsustainable with respect to the father’s and mother’s incomes, their bankers will block their accounts until the debt is reimbursed otherwise they will be tried and eventually jailed.
    These mad men should be judged for treason and jailed immediately.

  • Wolfgang Munster Schnozle

    Did the apostles have pooled bank account for themselves? 

    The vatican has billions slushed away and in assets and has an industry making it through various ruses. The fact it may have invested in some dubious stock ventures with the possibility existing of it loosing money therefore does not, I suggest, rank high in most people sympathies or cares. Can I suggest the splendour and wealth the pope and his cardinals live in are voluntarily curtailed to reflect the humble and austere life Jesus and his apostles lived.

  • Wolfgang Munster Schnozle

    Seems on the right track to me as the vatican is on record as being an avid supporter of the communist entity the EU which is nothng more than another German inspired attempt at european domination.

    With this type of un- Christian ideology, one has to ask what the real purpose of the roman church is?

  • Alcuin the Outraged

    Perhaps, the next Italian government should end Vatican State altogether.  Premier Monti might wish to consider seizing the Vatican bank and countless art treasures and other loot.  Then the pope and his cardinals can retreat to some remote caves and do penance for the rest of their days.

  • Anonymous

    @ wolfgang Schnozle:   wow, just where do you think all the vatican money is?  According to John Allen the Vatican finances are less yearly than many major American universities.  As far as the art and the Basilicas – that belongs to the people.   The registered value of the Pieta by Michaelangelo is $1.00.  That is because it can never be sold.  Don’t go inside the Vatican to see huge amounts of wealth (outside of churches that is).