“Political and economic uncertainty will exacerbate the crisis and this will increase support for Grillo, but also watch out for Berlusconi. New elections will be inevitable by the autumn, and they could win. This would blow up the spread and make the markets nervous, which for now are calm not out of optimism but only out of expectation". This is the scenario (it's not up to us to say whether apocalyptic or not…) hypothesized by Nouriel Roubini – he tends to be apocalyptic – professor at New York University and world-renowned economist, present as every year at the appointment of The European House Ambrosetti in the setting of Villa d'Este, in Cernobbio.
This time the ax of the teacher of Iranian-Jewish origins does not fall so much on the Italian and world macro-economic situation, seen as an improvement compared to the last months of 2012 (“The euro has not collapsed, Italy and Spain have held up, China has confirmed growth of 7-8% and the political situation in the Middle East is relatively calm"), even if "destined to worsen in the second half of this year", but on the Italian prospects, all to be deciphered and certainly not encouraging.
The elections of last 24-25 February in fact gave the country, as is well known, an ungovernable Senate, and so in the dramatic dilemma of austerity or growth, which in Cernobbio saw both Roubini and Jim O'Neill of Goldman Sachs solicit a U-turn in favor of the latter, expected phenomena emerge from the polls, but only up to a certain point. “The vote - explains the NY University professor - showed that 65-70% of Italians are against austerity. The situation can only arouse concern, because there is not only Grillo but also Berlusconi, whose proposals are crazy and would plunge Italy back into a fiscal abyss, and also a good component of the centre-left coalition, let's say a third, who rides the discontent of the population towards the crisis”.
What are the most probable scenarios? “What the markets are hoping for would be a majority government, perhaps with a new caretaker government or a grand coalition led by Bersani and Grillo. But I don't think this will happen: instead there will be a minority government, led by the Democratic Party and with the external support of Grillo, or a simple government of purpose to arrive at new elections”. Which in any case, therefore, seem inevitable to Roubini: "In my opinion, the government with external support will make its way, which however will last a few months and only for the political reforms dear to Grillo (electoral law, reduction of political costs, abolition of public funding to parties, etc), who however will not vote on the budget law in the summer and therefore by the end of 2013 it will return to the polls".
And the markets, so far calm, how would they react? Draghi says they are getting used to it… “Mario Draghi is right, at the moment the spread went up but then immediately fell back, and it is currently absolutely under control”. But this is not optimism, just waiting. “The markets – urges Roubini – they are giving themselves time, also to assess the situation after the German elections in September. And in any case, both Germany and the ECB will do everything to meet Italy".
Even if, going back to the vote, Grillo should win? “The hypothesis is more than plausible because in the meantime the crisis will inevitably worsen and at that point the populist and anti-austerity political forces will definitely make their way. I'm thinking of Grillo but also of Berlusconi, who could also win. And at that point, in both cases, the spread would go up. And a lot too."
