Italians pushing path to chaos

There is a paradox at the centre of the Italian political crisis: what may be good for Italy, or at least would be popular in Italy, would be bad for Europe. As the effective guardian of the Italian constitution and of the country’s international obligations, President Sergio Mattarella has vetoed a proposed finance minister who would, in effect, wreck the euro system. That has led to the collapse of the populist League and Five Star coalition led by Giuseppe Conte even before it was formed. Fresh elections may follow in the autumn.

President Mattarella is pushing at the limits of the powers of his largely ceremonial role, but is following precedent and acting constitutionally.

He is correct to say that the government as a coalition did not win a mandate to depart the euro by stealth.

The stakes are high. The departure of Italy, the third largest economy in the single currency, would be a significant weakening of the system in itself, reducing confidence in its fundamental sustainability.

Yet retaining Italy in the system under the coalition’s regime of fiscal chaos would be hardly more palatable. The one course of action that would reconcile things – a reformed and competitive Italian economy, with correspondingly more stable banks – is the one that it seems no-one in Italy wishes to pursue.