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It’s the last day of the Italian election today, and results will start coming in just after 9 AM ET.Paul Krugman devotes his column today to the broader significance of the election, explaining why so many people in Europe and in financial circles care about the result.
Basically, he notes, it’s the first real referendum on austerity.
Italy has played everything by the book, dutifully cutting spending, raising taxes, and so forth, just as the ECB and Germany have demanded.
And what has Italy gotten for it? A weaker economy and the prospect that radicals, clowns, and comedians could come to power. That’s note a joke. The man who managed all of the austerity, Mario Monti, is currently running in fourth place behind anti-bank comedian Beppe Grillo.
Outside observers are terrified about Italy’s election, and rightly so: even if the nightmare of a Berlusconi return to power fails to materialise, a strong showing by Mr. Berlusconi, Mr. Grillo, or both would destabilize not just Italy but Europe as a whole. But remember, Italy isn’t unique: disreputable politicians are on the rise all across Southern Europe. And the reason this is happening is that respectable Europeans won’t admit that the policies they have imposed on debtors are a disastrous failure. If that doesn’t change, the Italian election will be just a foretaste of the dangerous radicalization to come.
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