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Italian technocrats not political enough; our Bank Governor too political

Posted on 17 November 2011 | 9:11am

It is easy to feel that anything or anyone would do a better job than Silvio Berlusconi, but I can’t help feeling a bit uneasy about the installation of the new ‘technocrat’ government in Italy.

No democratic system is perfect, but to see a government of a major ‘democracy’ take shape, without a single elected figure in it, makes me feel the world is taking a backward step.

The collection of people being gathered beneath new PM Mario Monti may (or may not) be remarkable, clever people who will rise to this moment of crisis for country and for Europe. But government is hard at the best of times. These are the worst of times, and as they make the difficult decisions now before them, they will find the lack of any kind of popular mandate will quickly become a major problem.

David Cameron and George Osborne may be failing spectacularly in the implementation of their economic strategy, as shown by the shocking unemployment figures and the continuing worry about growth, but their voices do at least carry greater weight and authority by dint of having been elected, even if they failed to win an overall majority.

Our own top economic technocrat, Bank of England Governor Mervyn King, meanwhile, seemed to be moving – not for the first time – too close to the political line of the government yesterday, when he has his own job independent of government.

Just as Cameron and Osborne blamed Labour for all their woes a while ago, now they blame Europe. But they know the poor growth and unemployment figures – though they may well be made worse by the eurozone crisis – were not directly caused by it.

I remember from the days following last year’s general election, and the chats Gordon Brown had with Mervyn King, that the Bank Governor was keen to get a new government in, with Cameron and Osborne in charge. That doesn’t make him a Tory. He may genuinely have felt the coalition as formed was the only credible political combination to deliver similar economic credibility. But yesterday’s figures reflect badly on all three of them, as does the effort to blame it all on Europe.

Also I know it is a long way off, but busy people’s diaries get filled a long way out. So I recommend Sir Mervyn’s diary secretary cuts down on his Wimbledon days next summer. Fair enough to enjoy tennis; but not day after day when the economy is going belly up. Technocrats can get away with more than politicians can. But as Italy has shown, they are merging, and if King’s statement yesterday is anything to go by, something similar is happening here.

Whilst Cameron and Osborne stayed pretty much silent on the horror of 1m young unemployed, King did a nice little echo of the Chris Grayling line that the jobless figures ‘are the consequence of what is happening in the eurozone.’ They’re not.

  • Ehtch

    Some of these last decade eurozone countries have been a car accident waiting to happen. OK, Ferrari cars and Milan fashion, but that is not for all. Basic market sales create wealth, not how good you look walking through a Torino piatza, or however it is spelled, as Michael Caine found out in 1969, Innocenti Minis or not,
    And no doubt, Sicily is not impressed how things are turning out…. Perhaps Sicily should try and become independant, and become as successful over time as Finland? Finland has been sensible in the eurozone, and well done to them, I say, as Mr Bridger/Noel Coward would have put it.

  • Blakedw

    You have focused on one of the main issues on which major rethinking is required. These are two sides of the same phenomenon, the much too great accretion of power by unelected central bankers who are now making openly political decisions.
    I never accepted the case for handing control of monetary policy to central banks. But at least at a time when there was general consensus about apppropriate policy it could be argued there was a case for letting technicians make technical judgements. We know now they made a bad job of, failing in the role of ensuring financial stability. But now we have a situation where there is no consensus on what needs to be done. Some go for the Bundesbank line, many others feat this is dooming Europe to a repeat of 1931. The only proper way to resolve this is through the democratic process.
    We shouldn’t be unrealistic about the rle which markets play. A government faced with financial crisis in the markets has always been vulnerable. But we are seeing something new here. The head of the Finance Ministers, Jean-Claude Juncker said “we all know what to do but none of us knows how to get re-elected if we do it.”
    It’s not true that they all know what to do; but even if it were effectively scrapping elections is no way to go. Bruning thought he knew what to do and got Hindenburg to allow him to rule by decree so that he could do it.
    Some time back at an IMF meeting I met the Governor of the central bank of one of the Baltic States, which had recently been allowed into the European Union. I asked if the central nak was independent of the government.He said “that is not the right question; the right question is “is the government independent of the central bank? And the answer is No.”

  • Olli Issakainen

    Former employees of Rothschild-controlled Goldman Sachs are taking over Europe.
    Greece and Italy now have unelected PMs who have worked for the investment bank Goldman Sachs.
    Mario Draghi, new head of the European Central Bank (ECB), was a managing director at Goldman Sachs International. He, too, is a member of the Bilderberg Group.
    (Leading members of the Bilderberg Group are high degree freemasons with agenda of more integrated Europe and world.)
    Goldman Sachs was paid $300m to hide the true level of Greece´s debt.
    Now people from this same company are hailed as “saviours”!
    The 2008 collapse of Lehman Brothers caused the financial crisis and recession. The man who allowed Lehman Brothers to collapse, Henry Paulson, is the former CEO of Goldman Sachs.
    Angela Merkel now wants tighter union. Van Rompuy says that Italy needs reforms, not elections.
    Europe´s democratic deficit goes wider by the day. Eurocracy has contempt for nation states. Welcome to post-democratic Europe.
    Charles Moore wrote in the Telegraph that Left and Right should join forces against the great euro takeover.
    “Objective” technocrats, EU, ECB and United Nations´s IMF are taking over Europe with the help of bankers.
    They demand austerity which is killing growth and recovery. Debt will only increase.
    We are witnessing CONTROLLED DEMOLITION of capitalism – not recovery.
    Sovereign democratic nation states will be forced to default.                        Pre-architected solution will be GLOBAL GOVERNANCE.
    Orwell got it right!
    Britain may now be forced to borrow £109bn more than the forecast.
    Britain´s problems have not been caused by the eurozone because exports have been doing well. Private consumption is the problem.
    Inflation caused by VAT rise and cuts are the reason for Britain´s poor performance.
    Unemployment is now 2.62m, inflation 5%.
    It is irresponsible for the Bank of England to say that Britain will grow 1% next year. In 2012 Britain, like the rest of Europe, will be in depression caused by the controlled demolition of capitalism in Europe and the US.
    On the pretext of eurozone “´crisis” deliberately caused by bankers, the EU will now be built into a United States of Europe.
    Or to quote Trotsky, into a Soviet United States of Europe. I call this Orwellian totalitarian dictatorship Communism 2.0. 

  • Ehtch

    Notice, before cookies get onloaded, you might be lucky to see the iceskating scene from the filming that was cut from the end clip of movie.

    Clever, ey, ice skating scene, then try again – gone away?

  • Ian Eastwood

    The new governments in both Italy and Greece may be more suited to the drama’s that lie ahead than the outgoing ones, But numbers are numbers and in both cases they just don’t add up. Sadly they are not on there own the good old USA may have kicked there own financial can along way down the road, but as sure as eggs are eggs unless they address there issues soon there own crisis is not to far away. All the talk about rescue and austerity plans for Greece etc is not about saving these great nations and people, its all to prop up the banks and institutions that lent the money in the first place, if these institutions go to the wall so be it. I don,t remember the world stopping revolving when one of there clan Lehman’s collapsed. Sure it would be painful but the purging of these blood sucking leeches would make us all healthier and happier in the long run.  

  • MicheleB

    I’m sure that if there was going to be an actual election in Italy the majority of its population would not vote to own responsibility for Berlusconi and his mismanagement.

    There are all sorts of odd opinions flying around the EU at the mo, partly due to participants’ personalities.  Camsham managed to put other Europeans’ backs right up. 

    The reactions to his crass and total lack of tact have now escalated to statements about ‘us’ wanting to offload any pain.

    Thing is, there were supposedly benefits to be had from being in the Eurozone.  We eschewed them, thank 4 letters we did.  Whatever those benefits were, they have been enjoyed by southern Europeans and RoI for a few years; of course we should not now be sharing the payback.

    I’m still wondering whether/how IMF were involved in overseeing the parities that were decided/agreed when each currency converted.    

  • MicheleB

    Back to the Bilderberg Group?
    Other attendees at the annual meetings have included our Will Hutton, our Ed Balls, ex-PMs and CsExch (including your own). 

    Banks change ownership, my own has gone through several ownerships  in a couple of decades as well as becoming partnered with one lot and then another like musical chairs.  Perhaps GS has been involved in some way or another, does that make them and all their ex-employees masters of the universe?

    The world does need mutual respect between people.  I’d be far more worried if all these bankers were weapons manufacturers.

  • I read this and then went cycling – in the warm sun, here in Yorkshire in November.
    Sort of a Star Wars thing happening here.
    The Empire Strikes Back – we have the Tories of the ’80’s here yet again – they have not changed at all.
    The Attack of the Clones is where we are with the democratically deprived despots being dropped Europe-wide now and Spain come Saturday night too.
    I feel Teresa May might yet transmogrify to Thatcher and tell Cameron what we already know – I am your father.
    Darth Vader, Dire Vile Cloned Cameron.

  • Gilliebc

    ‘…………feeling a bit uneasy about the installation of the new ‘technocrat’ government in Italy’

    Too right AC.  I think it’s quite frightening just how easily democracy has been set aside without so much as a whimper from other democratically elected MPs.  The phrases that spring to my mind are “start of the slippery slope” and “thin end of the wedge” etc

    Many of us knew that this was likely to happen.  But I didn’t think it would happen quite so quickly or quite so easily.  This however is merely the beginning.  Or, a small taste of things to come.

  • Robert

    Well, Mervyn King knows he holds the poison chalice – keeping down inflation under a government applying inflationary policies but having to write letters explaining why he is failing because of what they are doing.

    A man with a poison chalice does well to stay close to those who gave it to him – waving and sloshing it under their noses, over their sumptuous dinners, placing it for others to pick up.

    That way, as in Hamlet, everybody dies.