Summary
Berlusconi's menace to block EU was rude and naive but was also supporting Barroso role when his election was uncertain. Recessions divide countries and there is a risk that Barroso is not strong enough to support a unified market policy.
Analysis
Blocking the EU meetings was a menace due to Berlusconi's temper? May be, given the heavy combination of international discredit and domestic opposition. After all, a premier must be nervous when his country is strongly affected by a long recession, following 15 years of insufficient growth and strong regional dualism. Actually, current recession is large (5% real GDP fall in most 2009 estimates) and - as also in Germany - perspectives are gloomy for a weak or virtually null 2010 recovery.
In the meantime, recurring attacks to magistrates, journalists and any sort of 'opponents', including those within the same Center-Right coalition, are probably eroding Berlusconi government strength and personal self-control. However, asking EU officials to avoid comments on EU topics to be left to the EU President only, could be either a gaffe or a move, more or less related to the uncertain Mr. Barroso confirmation for a second five-years term. Now, the problem is settled because Mr. Barroso has been confirmed as European President.
While the ballot was secret, it is well known that Mr. Barroso was supported by center-right forces, among which the weight of Berlusconi (PDL) party is important as the WSJ article notes: actually, the PDL is the second national delegation in the center-right European EPP party, where Germany ranks first.
Could this arithmetics be relevant for EU economic policies? Certainly, not alone though the evaluation is more difficult when other factors enter. In general, recession times are difficult for sound economic policies, i.e. for policies abstaining from protectionism and national/sectoral support. In this vein, there are obvious differences between EU and US recent experiences: one thing is supporting discretionary and temporary fiscal policies in a single market as the US is and one thing is maintaining and, possibly, developing a unified market in Europe where state intervention is a tradition and where exports mutually compete.
Given all these circumstances, there is a risk that Mr Barroso cannot be a strong leader unless the recovery starts soon and unless protectionist policies are rejected to maintain a unified EU market perspective. Therefore, Berlusconi's credits - if any - will be less important if competition is supported by other countries too. In Europe and elsewhere.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
