La Strega e der Dummkopf

International relations are often characterized by extreme politeness and strict adherence to social etiquette.  Even competing powers who share little in common, such as China and the United States, find the time for political niceties.  It was therefore even more surprising to read that Italy's then-Prime Minister, Silvio Berlusconi, was caught referring to Angela Merkel, Germany's Prime Minister, as a "culona inchiavabile."  While it is amusing to finally catch a glimpse of the personal thoughts of a head of state, the reactions sparked by Berlusconi's misstep were anything but funny.  Many Italians were outraged at their Prime Minister's remarks, but rallied behind him after Italy was publicly ridiculed by several European Union countries, most notably France and Germany. Apparently, nothing unites a country like being on the receiving end of international ridicule.

The relationship that Italy and Germany share has always been close, but the creation of the European Union has added an additional dynamic.  Northern Italy's strong Germanic influence is noticeable almost everywhere: some northern towns speak a dialect of Italian that borrows heavily from German (and is almost unrecognizable to southern Italians); public transportation management matches German methods, and not the notoriously inefficient South; and economic activity in the region is dominated by the production of machinery and other high-skill goods.  The division between the two countries is first apparent after the creation of the European Union, where both countries lost domestic monetary autonomy.  The loss of domestic monetary autonomy is important because Germany and Italy traditionally, and in recent times, have had almost opposite views on the correct way to manage a national economy.  Generally, Germany has tended towards more conservative policy that focuses on maintaining low levels of inflation while Italy has tended towards more liberal policy that focuses on economic growth even in the face of a growing debt and deficit.

These contrasting opinions on economic management have led to friction between the two countries as the European Union struggles to haul itself out of the global recession.  The European Union's power lies in the ability of its 27 member states to act collectively; however, if any of the members choose to free-ride, the collective action of the group will be less efficient and more prone to failure.  Italy promised the EU to reduce its deficit, in part by crafting two austerity budgets, but at the same time the Italians refused to pass a stimulus package, as the rest of the EU had already done.  Italian's semi-commitment to EU monetary policy, resulting from a combination of foolish politicians and nationalist sentiment, came to a brief end after the election of technocrat Mario Monti.

Monti, an economist by trade, was quick to understand the problem and to identify solutions.  His most effective solution was putting into place emergency austerity measures which raised taxes and cut welfare.  Italians quickly grew to hate the austerity measures and their champion, Mario Monti.  In February of 2013, new elections were held in Italy after Mario Monti announced his forced retirement.  Although there was no clear victor (new elections will soon be held), the 'disgraced' Berlusconi still managed to attract almost one third of the vote, an indication of how unpopular the austerity measures are with Italians.