Even as he won the backing of Italy's two major political parties on Nov. 15, Prime Minister-designate Mario Monti was already under pressure from his approval ratings. The numbers that worried him didn't come from popularity polls. Instead, just as he was in the middle of hammering together a government, stock markets across Europe were sliding on anxiety that Monti wasn't making quick enough progress. Those financial alarms not voters or upheaval on Rome's streets had helped put Monti into the leadership. And they perhaps even more than the Italian people are likely to have an effect on his longevity in the job of salvaging an economy that may make or break the euro.
Saving the euro has become the continent's paramount quest. The common currency was designed to elevate Europe's economic influence by building a unified bloc big enough to match the clout of the U.S. But its real aim goes far beyond dollars and cents. By deepening the integration of Europe's varied nations, the euro was meant to ensure peace and democracy on a continent too often torn asunder by war. That's why recent political events in the euro zone are so ironic, even distressing. The leaders of Europe have apparently determined that the way to keep the euro's democratic dream alive is through undemocratic means.
Look at what happened in the two countries that are today the biggest threats to the euro's survival. On Nov. 13, Monti, a former European Union commissioner, was appointed Italy's new Prime Minister after the credibility-challenged Silvio Berlusconi resigned. Two days earlier in Greece, Lucas Papademos, a former European Central Bank vice president, was sworn in as head of a new coalition government, replacing the tired George Papandreou. Both were welcomed with optimism that they could implement tough reforms. But neither Monti nor Papademos was elected into their jobs; in fact, neither was holding any elected office before claiming national leadership. Preserving the euro trumped preserving the spirit of democracy.
To be fair, neither nation may have had much choice. As Berlusconi floundered, unable to push reforms through a skeptical Parliament, the government's borrowing costs escalated sharply, a sign that investors were losing confidence in his ability to repair Italy's sluggish, debt-laden economy. If the trend continued, Rome might have faced trouble financing its $2.6 trillion of debt, pushing the country toward a default. The consequences of that would be disastrous, and not just for the euro. A meltdown in Italy, the world's eighth largest economy, could derail the already shaky recovery from the Great Recession. In Greece, Papandreou also struggled to implement the austerity demanded by euro-zone leaders to keep bailout money flowing into his empty coffers.
Both countries needed to get credible administrations in place quickly to calm markets and stave off a widening crisis. "Democracy has very serious limitations. It has the ability to kill itself, to self-destruct," says Roberto D'Alimonte, a professor of political science at Rome's LUISS University. Installing these new governments "is not good or bad. It's necessary."
Both Monti and Papademos are eminently qualified to be economic reformers. They are skilled technocrats, well versed in the lingo of bond markets and well aware of the reforms their economies desperately need. Both are highly regarded within the E.U. and see their nations' future as part of an integrated Europe. Unfortunately, while the cast of characters may have changed, the depressing play we're watching hasn't. Monti and Papademos face the same daunting, if not impossible, tasks as their predecessors: to implement painful reforms and fix broken national finances in the face of public and political opposition. Protesters are already scheduled to take to the streets.