No economic panic in Italian cities as most ignore mess

Outward signs of prosperity mask disconnect

Europe may be edging toward economic apocalypse, yet it was hard to get much sense of that while criss- crossing the continent by rail, as I have just done for several weeks.

Italy, along with Greece, Portugal, Spain and Ireland, are reckoned to be in the worst shape.

After months of rumours, Italy once again had its credit rating downgraded again last week. Furthermore, the Bank of Canada predicted this week that fallout from the mess will cost the Canadian economy about $ 10 billion his year.

However, there were no outward signs of economic distress in this postcard beautiful old city in the Italian Alps that had been part of the Austrian-Hungarian empire until it was annexed to Rome at the end of the First World War.

Despite all the bad economic news that Italy has received last year, the local German daily, the Dolomiten, reported in December that an unprecedented number of tourists had visited the southern Tyrol during the summer. New records were expected to be shattered during the current ski season.

During the Christmas rush, shops in and near Bolzano’s magnificent Domschatz Cathe-dral were brimming with expensive, high quality goods, and restaurants in Walther Platz were packed until late in the evening.

An elderly Italian on the train from Bolzano to the smaller spa town of Merano was leafing through a brochure offering expensive vacations in Asia. He told me that he and his wife wanted to get away for a bit “before the euro dropped any further.”

Everyone knew about the calamity that was creeping up on them, fellow travellers assured me, but were trying their best to not think much about it.

Although the Alto Adige, as the region is known in Italian, sits in an alpine pass between southern and northern Europe that had always been blessed with a much stronger economy than Sicily and Calabria, there were still a few hints of economic distress in Bolzano. A 45- year old Sicilian who had long worked as a waiter in Bavaria during the summer and in the Tyrol during the winter said that despite appearances, revenues were down at many businesses and workers were quietly being laid off.

A young Ukrainian woman preparing, of all things, sushi in a tiny shop said there was growing pressure on immigrants to return home. Locals who had not previously been interested in such work now coveted her job. She was in a quandary. She liked the city and there was no reasonably paying work for her to return to in Ukraine. But if she lost her job she would have no support network to fall back on.

For all that, there was no sense of panic yet in Bolzano or in other Italian cities I visited, such as Verona and Rome. Only when provoked with direct questions was there any dark talk that if — as many economists are predicting — Italy’s economic crisis is about to deepen, that anxiety might give way to raw anger and street violence as it sometimes already has in Greece.

To keep muddling along, Italy must roll over up to $ 400 billion in debt in 2012. Ominously, after a brief pause during a European Union summit at which politicians tried to bring the crisis under control last month, interest rates on bonds that the country depends on have been creeping higher again. A lower credit rating will exacerbate that trend.

As unrealistic as it was, almost everyone that I spoke with in Bolzano still hoped that Europe’s leaders would find a quick fix to Europe’s debt crisis. But there was a serious disconnect. While demanding swift, emphatic action from their leaders and help from wealthier neighbours such as Germany, many Italians and the Europeans whose tourism they depended upon, remain addicted to their free- spending lifestyles.

A middle- aged woman dining on venison with her husband in a swank restaurant in Bolzano told me that as on that fateful night on the Titanic where many passengers danced until the last possible moment as the ship went down, Europeans sought to enjoy life until the last possible moment today precisely because they knew that a savage economic reckoning had already begun.

Whether there will be as much dancing or skiing in the Alps next winter is doubtful.