Issue link: https://maltatoday.uberflip.com/i/1158932
22.08.19 9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN COORDINATING EDITOR: PAUL COCKS CONTRIBUTING JOURNALISTS: MASSIMO COSTA | LIAM CARTER BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 I taly's political crisis is nothing new to those of a certain age who have been following happenings in the neigh- bouring country. Backstabbing, intrigue and govern- ments that come and go have been a mainstay of the Italian political system since the end of World War II. There is historic logic in Italy's frag- mented system that shies away from in- stalling strong governments that can last a whole legislature. Italians were wary of strong govern- ments in the aftermath of the fascist years under Benito Mussolini. Fragmen- tation was a guarantee against the return of the ugly years under fascism. This legacy, coupled with a political culture that seems to thrive on divisions, has, however, left the country in a per- petual state of flux. Within this context, the latest resigna- tion of prime minister Giuseppe Conte and the subsequent wrangling over the formation of a new coalition government comes as no surprise. The likeliness is that the populist Lega Nord led by its charismatic communica- tor Matteo Salvini will be pushed out of government. The development is good news for the markets because it opens up the possibil- ity of the mainstream centre-left Demo- cratic Party to join the government with the populist Five Star Movement. It is unclear whether this coalition will be able to last the rest of the legisla- ture. And there is the fear that Salvini, unshackled by the strictures of gov- ernment, will grow in popularity in the polls, putting him in a stronger position to become prime minister at the next election. That possibility could send shockwaves in the EU given Salvini's disregard for the need to balance public finances and his most recent call for Italy to pull out of the Eurozone. Italy's woes can be brushed off as the usual political machinations but in an ever-connected EU, what happens in It- aly can have a profound impact on the bloc. The country has the fourth largest economy in the EU, and it will become the third largest when Britain leaves. It- aly also has an extraordinary amount of public debt, which gives the country no room for manoeuvre. Bringing public finances under control and managing to grow the economy are crucial to stave off a financial crisis. Suc- cessive governments have failed to shake up the country enough to bring substan- tial change. Public projects such as the high-speed train link that will connect the Italian city of Torino with France's Lyon appear to have no end in sight. Unemployment among youngsters re- mains high and reforming stifling labour laws has been an uphill struggle. This time around, what happens in Ita- ly cannot be simply brushed aside as the usual happenings. If Italy buckles, the Eurozone crisis of 2010 will pale into insignificance next to the impact an Italian debacle will have. Recovery in the EU has been slow and economists are forecasting slower growth this year. With the uncertainty caused by the US-China trade war, and Brexit, the Eu- rozone may not be in the best of places to contend with an Italian financial crisis. This is why Italy must steer away from populism that proposes flimsy solutions to real life problems and embark on a programme of socio-economic reforms to unshackle the country and ensure Ital- ians live a decent life. Not just another Italian political crisis