Austerity: The bitter pill to swallow

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Italy rejects the austerity measures put in place by Monti proving that austerity is a bitter pill to swallow on the road to recovery
Italy rejects the austerity measures put in place by Monti proving that austerity is a bitter pill to swallow on the road to recovery. Photo-VectorPortal

It seems that the European countries are now seeing the A-word with disdain and retribution as they have rejected the ideas of limited government spending and more burdensome tax schemes again and again. The latest episode comes courtesy of Italy where the ballot box became the soap box for the nation where there has been an inconclusive election.

The pre-election favourite, Pier Luigi Bersani, was able to secure the lower house by a slim margin while the disgraced former premier Silvio Berlusconi has won a significant minority in the Senate making sure that his opinion matters when it comes to decision making. At this point, political parties are not seen in light of their political ideologies but whetehr they will implement the austerity measures or not. Most of the Europe has held consensus on this issue and mostly has lost to austerity measures being put into place.

This is yet another defeat. The effects of this have rippled through the market where the added uncertainity was not expected. The markets fell after the results of the election and oil was also hit seeing the lack of action that will preceed. The deadlock will prove to be prolonged and messy and markets have not seen the last of this episode by any measure. The austerity measures are necessary and have to be implemented at some point in order to make Italy eligible for further assistance from Europe in the future, however, the populace feels that austerity is not the way out and they are having their voices heard.

The solution to the deadlock right now is to place an interim government and to carry out another election to make sure that one party is able to have a majority or an alliance can create a majority in both the houses. That is the only way policies can go forward and effective law making can be carried out. A coalition is being rumoured but considering Italian polticis, it has to be seen first. A hung parliament is the harsh and sad reality that overlooks Italian politics right now and will guarantee an elongated period of lack of economic and social progress for the time being.

Recession in the economies do not need a further slowing down of any action and social stagnation can also lead to protests in the streets the like of which were seen in the streets of Athens not so long ago. The outgoing government of Monti had placed some form of austere measures in place which have some time before they expire and the stalemate right now will not be affected by these measures but there is still the reality that action is needed soon in order to address the problem in a political, economic and social manner before things get out of hand and people take up rocks instead of ballot paper.

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