June 17, 2018
The change of government in Italy calls into question the German leadership of the European Union, which was myopic at best.
Italy has never benefited from the introduction of the euro. Its GDP per capita after the introduction of the common currency has stagnated. German-imposed austerity measures and the lack of solidarity among member countries in the euro club have contributed to transforming a once-promising monetary initiative into a fiasco. The common currency was supposed to bring prosperity and unity among its members. Instead, it brought misery in the South and pitched countries against one another (Joseph Stiglitz).
Sadly, nobody within the EU expects Germany to live up to the fact that it should have done much more to avert the euro crisis or to help countries in deep financial trouble. President Macron’s valiant efforts at reforming the Union and its common currency are likewise being torpedoed systematically by the German chancellor, who had lost touch with reality a long time ago and looks set to become the Union’s gravedigger.
In the current political climate, nationalists are gaining power in one member-state after another and xenophobia is on the rise. Such developments can only spell doom for the embattled Union, already weakened by Brexit and the debt crisis. Unfortunately, many economists or political analysts are not optimistic when it comes to the EU’s chances of overcoming its current woes. One can only hope that they are wrong and that the worst – i.e. the implosion of the Union – could still be avoided.