At a joint news conference last week, Germany’s Angela Merkel and France’s Nicolas Sarkozy let their guard drop. Asked whether they could rely on Silvio Berlusconi to get Italy’s economy in order, they exchanged a mocking glance, rolled their eyes heavenward and smirked.
No one’s laughing now.
Berlusconi, the playboy Prime Minister described by one commentator as a man no one would trust with their daughters, much less their economy, has been forced to exit the political stage, to the relief of the German Chancellor, the French President and most of Berlusconi’s MPs.
But he has left behind a shambles that has become the latest threat to the future of Europe. Italy might soon follow Greece into economic meltdown, a prospect that has sparked talk of a deep recession, an end to the euro and the collapse or shrinking of the European Union.
The crisis in Europe is also undermining the fragile global economic recovery, leaving the world “looking straight into the face of a great depression”, Simon Johnson, a former chief economist at the International Monetary Fund, warned this week.
Other commentators also threw the term about. “I think it is pretty clear that we are in a very precarious economic situation that is highly similar to the Great Depression,” David Edwards wrote in Forbes magazine.
The chief of the IMF, Christine Lagarde, joined the chorus of doom, warning on a visit to Asia that “there are dark clouds gathering in the global economy. Countries need to prepare for any storm that might reach their shores.”
