Queuing on the south side of the San Gottardo tunnel in Switzerland surrounded by Dutch and German cars, I wonder whether my fellow travellers have been convinced by their summer sojourns in Italy that their southern neighbour is changing. Myself, I cannot see it. Italy is miserable from the cuts that have been going on for years. But structurally the story is the same. In this respect, Mario Monti appears to be a continuation of Silvio Berlusconi, minus the bunga bunga.
What has Monti done? A labour law that no one in Italy believes is more liberal than the old one. Nothing to simplify legislation, the tax regime, or the bureaucracy. And absolutely nothing to create a functioning, more efficient judicial system. Just budget cuts. In sum: Berlusconi 2.0.
I am sitting in a German petrol station pondering this when I realise I have to get out of my car to fill it up with LPG. Unlike in Italy, there is no law in Germany that mandates that only a petrol station employee can fill a car up with gas. I glance wistfully over my shoulder, recognising that feudalism has its upside.
Mr Market, meanwhile, is feeling quite sanguine, having convinced himself that Frau Merkel is readying her cheque-book to bail Italy out. Or at least being ready to let Flexible Mario at the ECB write the cheque. The ECB is to announce the latest terms of its support for so-called ‘peripheral’ countries later this week.
Mr Market, methinks, underestimates Frau Merkel. Italians have been asking for 20 years for a northern European mamma who will put the kibosh on their bad habits, and I suspect they are to be rudely surprised by getting what they wished for. One way or another, with the failure of Monti, a bunch of Germans and IMF folk are going to end up moving to Rome to oversee the structural reforms that Italy requires. Either that, or it’s out of the Euro.
Why Super Mario is made of paper. As his 2012 budget foretold. My own cunning plan to solve the Italian debt crisis. How the buck stops in Paris. The global picture of what we are dealing with. Why you should never listen to the Brits about Europe.