Angela Merkel has generally been appreciated in Italy. She has provided an example of a stable government. One can understand the reason for this appreciation in a country that is politically very unstable. But to verify this assessment it is useful to go back to the most significant origin of the crisis ten years ago, between 2011 and 2012.

How was the crisis confronted?

1.   Italy was not the most affected at the beginning of the crisis when Mario Draghi was the president of Banca d’Italia. In May of 2011, exposing in his annual report the economic conditions of the country, he was relatively optimist. The crisis of 2008-2010 had been positively confronted.

But all that changed in the following months. Merkel and Sarkozy decided that each country had to return to the rates of deficit and debt fixed for the eurozone. And Jean-Paul Trichet, head of the European Central Bank was the protagonist of this new course that in the second half of 2011 changed the destiny of a number of governments of Southern Europe including Portugal and Spain, Greece and Italy. He increased the interest rates, mistakenly convinced that there was an imminent risk of inflation. Then the ECB with its mistaken belief,  insisted that the countries in debt reduce their deficit while the Eurozone was still part of the crisis originally born in the US.

It was a signal for the financial markets that immediately increased the interest rate until 5-10 per cent. The crisis of the more indebted countries as, after Ireland, was the case of Spain and Portugal, Greece and Italy, became unavoidable. The governments of Portugal in July and then of Spain, Greece and Italy were put in crisis under the attack of the financial markets. Germany, France and the ECB had decided a policy that irreparably hit a number of  the eurozone’s countries.

Basically, there was, on the one hand, the consolidation of the wealth owned in euro with a stable value and with increasing interest rates; on the other, the impoverishment of the social strata linked  to dependent  work in a context of decreasing and  precarious employment, attacking  at the same time the power of trade unions in the wage  and working conditions bargaining.

The opposite had happened in America after the 2008 crisis. Barack Obama had intervened as soon as he was elected, injecting 800 billion dollars into the economy to promote the recovery. The sum was considered insufficient by illustrious democratic economists. But the recovery, however slow, began. And in the following years, the recovery gained momentum.

2.   In Italy, Mario Draghi, had had to follow – who knows how willingly - the policy of Trichet. Draghi was a candidate as successor to his position. Then, in the summer of 2012 he changed the monetary policy, affirming a strong defense of the euro. “Within our mandate – famously affirming - the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough”. In fact, the euro was safe. But the eurozone’s economy fluctuated between recession and stagnation in the following years. The crisis did not only concern the countries of the Mediterranean. The case of France was significant.

Up to a certain point Sarkozy's France seemed to have led, together with Germany, the development of the crisis and its future. But it was not so. Francois Hollande won in 2012 the elections with the Socialist Party after announcing a progressive social policy. Bat the commitment lasted the space of one morning. The defense of the euro imposed also on France a deflationary policy. Growth languished as unemployment increased. The disappointment of the French left led to an inexorable socialist setback. And the Socialist Party, after the 2017 elections, left the scene suffering the worst defeat of the French left since the establishment of the Third Republic, a century and a half before.

In effect, the eurozone had lived in almost a decade of low growth and high unemployment in the middle of policy instability. Italy had changed in the second decade governments six times, in the end leaving the premiership to Mario Draghi. But this was not an isolated case. During the chancellorship of Angela Merkel, France had witnessed the presidency change four times and a greater number of change of governments.

The 2020 pandemic arrived in a eurozone still in difficulty given permanent low growth and the high unemployment in  many countries. It is in this context That Germany and France, on the initiative mainly of Angela Merkel, proposed the distribution of 750 billion euros in grants and loans to the member states of the European Union over five years, of which about 190 billion would go to Italy and 140 billion to Spain.

The decision was enthusiastically welcomed by the system of large companies that were to have unexpected resources at their disposal. But the comparison with other countries affected by the pandemic is enlightening. The US has invested 4,900 billion dollars between 2020 and 2021. Meanwhile Powell, head of the Federal Reserve, maintains the disbursement of 120 billion a month for the recovery of the economy, and interest rate close to zero until the unemployment will be under 4 percent. Biden has finally obtained the availability of 1.2 trillion dollar for public investment over the next ten years, while Democrats had also proposed more additional resources for public investment in infrastructures and aid to families.

3.   The difference with the eurozone policy is striking. In the European Union large companies rejoice because they will be able to get 750 billion euros in grants and loans to the member state of the European Union for investments in the framework of the European conditions. But in the background the problems of falling income and employment during the pandemic have not been solved. Despite the first signs of recovery, unemployment, particularly affecting the new generations, is 7 per cent in France, 10 per cent in Italy and 14 per cent in Spain.

Particularly in Italy the economic and social outcome has been disastrous in the 20 years following the changeover  to euro. According to the  Economist, Italy “even before covid-19, had barely grown this century: in real terms, Italy’s gdp in 2019 was only 4% above its level in 2000…Real gdp per person was 1% lower over the period, compared with increases of 16% in France and 24% in Germany”(“Italy’s new prime minister has had a good first nine months”, November,6^th).

It is not surprising that unemployment has reached in Italy 20 percent in the main regions of the South. National wealth has not only declined, but has been concentrated at the top of the income ladder, particularly benefiting the richest 10 percent of the population. The recovery has been announced by Draghi’s government between the end of 2022 and the beginning of 2023, when Italy will still register a national GDP less than that of 2007, before the beginning of the worldwide Great recession.

The economic crisis has had an impact on politics. When Mattarella's presidency of the Republic will end at the beginning of the new year, Draghi, according to current forecasts, will be a candidate for the succession. But events might turn out differently and he might continue as the head of the government.

But for how long? Already in this autumn, the current government majority could dissolve, paving the way for new elections. But, in any case, in the spring of 2023 we will go to the polls. According to current forecasts, the new majority could possibly be made up of the Lega led by Salvini and Melony’s Brothers of Italy, with the probable agreement of those who still remain in Berlusconi's declining party.  In this case we will find Italy, one of the founding countries of the European community, in an extreme right-wing position never experienced in the past.

It could be concluded that Italian politics has very particular characteristics. But it is not true. The Spanish government is a minority coalition, after the Socialist party had to face a severe defeat in the elections in Madrid. In France, Macron's presidency will be severely tested in the upcoming spring elections of 2022, placed between the traditional opposition of Marine Le Pen and new right-wing competitors.

Twenty years ago, with the passage to the euro, the eurozone  was a candidate, along with the US, to be at the top of the Western world.This has not been the case.  Forecasts are always uncertain. But the future of the Eurozone is not only conditioned by a disappointing past. It will have to contend with a new order of the economy and global politics. The new dominant countries, from the United States, to Japan and China, border the Pacific.

The eurozone, that had raised so many hopes at the turn of the century, could find itself on the periphery of the new global order. Historians will have the task of establishing whether it was a predetermined destiny, or the consequence of obstinately bad policy in front of challenges posed by the new century.