(Update) The Fire Next Time: The Euro Financial Crisis – The Rise of The Technocrats
Posted by AzBlueMeanie:
In last week's episode of the melodrama Euro Financial Crisis, our heroes Rocky and Bullwinkle were in a cliff hanger in Italy: "Will the fat lady sing in this Italian Opera? Is it curtains for our heroes? Tune in next week…"
In this week's episode of the melodrama Euro Financial Crisis, we learn that just when you think the opera is finally over, there is an intermission and another act. Aaaargh!
This melodrama has entered a new phase: the Rise of the Technocrats. On Thursday, Lucas Papademos, a respected economist and former vice president of the European Central Bank, was named to lead a new Greek unity government that has pledged to abide by the tough terms of a European aid package in the hopes of saving the country from bankruptcy. Economist Lucas Papademos Named Prime Minister of Greece – NYTimes.com:
Mr. Papademos has only a few weeks to persuade Greece’s creditors in the so-called troika — the European Union, the International Monetary Fund and the European Central Bank — to release its next block of aid, $11 billion, before the country runs out of money. Then he must begin fulfilling the painful terms of an even larger loan.
He will have to move swiftly to reassure the European leaders there will be no repeat of the shock they suffered in October, when the former prime minister,George A. Papandreou, after negotiating a new $177 billion loan, decided without warning to submit the bailout package to a referendum. The move infuriated the Europeans, who had concocted the Greek bailout as part of a painstakingly negotiated broader effort to stabilize the euro. It also started the clock on the end of Mr. Papandreou’s tenure.
Mr. Papademos will have to deal with 2011 budget shortfalls and the passage of a 2012 budget that is expected to call for another round of austerity measures in a climate of growing social unrest. He will also have to start what are expected to be difficult negotiations with private sector banks that have agreed, in principle, to write off 50 percent of the face value of their Greek bond holdings as part of the rescue plan.
* * *
Mr. Papademos, seen as an outsider to the old-boy political networks — is a technocrat, perhaps able to take Greece on a new path. But it was not an easy sell. Some analysts here have said that the political parties were reluctant to embrace him because he would be an unknown, and perhaps a rival, at election time.
* * *
Whether he will succeed remains an open question. But some analysts said they considered his appointment to be Greece’s best shot.
Meanwhile, back at the Roman Coliseum, Prime Minister Silvio Berlusconi, Italy's version of Rupert Murdoch — a media tycoon who has thoroughly corrupted media and government — resigned on Saturday, punctuating a tumultuous week and ending an era in Italian politics. Berlusconi Resigns After Italy’s Parliament Approves Austerity Measures – NYTimes.com:
His exit, a sudden fall after months of political stalemate, paves the way for a new government of technocrats led by Mario Monti, a former member of the European Commission. Mr. Monti is likely to be installed in the next few days, following the apparent consent of key blocs of Mr. Berlusconi’s center-right coalition.
* * *
Though it was met by cheering crowds in Rome, the end of Mr. Berlusconi’s 17-year chapter in Italian politics, characterized by his defiance and fortitude, sets off a jarring political transition. “This is the most dramatic moment of our recent history,” Ferruccio de Bortoli, the editor of the Milan daily newspaper Corriere della Sera, said Saturday.
After borrowing rates on Italian bonds soared last week to levels that have required other euro zone countries to seek bailouts, Mr. Berlusconi pledged to step down after the Italian Parliament approved austerity measures sought by the European Union.
The lower house gave their final approval to some of the measures on Saturday afternoon, and two hours later, he officially submitted his resignation to President Giorgio Napolitano.
An impromptu orchestra and choir gathered outside the presidential palace, where Mr. Berlusconi resigned, playing the “Hallelujah” chorus from Handel’s “Messiah” . . . making Mr. Berlusconi the very embodiment of the Italian saying that the tenor is applauded until he is booed off stage.
So does the fat lady sing now? No. It is only intermission, and the next act is to yet to come.
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