Breakout

European Crisis Will Make a Comback: Zucchi

Breakout

With the after-effects of last year's divisive Presidential campaign still lingering, it's hard not to be a little bit envious of the Italians right now. Not only can they dissolve a dysfunctional or unpopular government every year or two, but they can also elevate a middle-aged comedian to the brink of leading the third largest economy in Europe. A recent write-up on Beppe Grillo in the Guardian states that he "took the stage to a rock-star welcome before at least 100,000 cheering fans, yelling at them that his movement would rip open parliament 'like a tin of tuna.'"

But for all its intrigue and excitement, market watchers like Fil Zucchi, senior writer at Minyanville, say the process makes better theater than the outcome.

"This election will put together a collation that won't last and we'll be sitting here talking about the same thing 12 or 18 months from now," the Milan-born Zucchi says in the attached video

This might seem intolerable to many Americans who are accustomed to our quadrennial political process, but Zucchi says Italians are not only familiar with unstable governments, in some ways, they like it, since it limits the amount of damage that can be done. It would also give reason to believe that it limits the amount of progress too.

While the outcome is unknown, Zucchi predicts the ultimate coalition that is formed will probably carry-on "close to what things were like in the Monti regime," and its austerity measures. As much as these cutbacks are being felt by the average Italian, Zucchi says, compared to Spain, they are modest."I think the real problem now is Spain," he states, relaying a description of "abject misery" from relatives who live there. "There's bound to be some social unrest, sooner rather than later."

Whether its France's rising taxes and questionable productivity, the UK's losing its AAA-rating, or Cyprus's underwater banks that need billions of recapitalization, Zucchi agrees that we have not heard or seen the last of the European debt crisis.

"I think the European crisis will eventually make a comeback," he says, "because the underlying problems (an insurmountable amount of debt) are not being addressed."

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