The turmoil produced by the Italian elections has directed attention back to where it should have been all along – to the politics of the eurozone crisis. We have had six months of complacency, rising stock markets and wishful thinking. The conventional wisdom was that the crisis had been contained, with Ireland recovering and the risk of a Greek exit from the eurozone reduced. But this view always ignored the politics.
Greece, in particular, showed that even if capital flows might be going in the right direction, the democratic deficit was widening. No one has much cared outside Greece that a neo-Nazi party could shoot to above 10 per cent in the polls. But it is a warning of what can happen to other eurozone members.
There is, fortunately, no parallel to the rise of Golden Dawn in Italy. But the crisis of democratic legitimacy has been shown to be equally deep there. As in Greece, the voters have a reasonably clear view: they want to remain in Europe and – knowing the defects of their own economic system – they may even accept some measure of austerity.