November 12, 2011
Europe has claimed the scalps of two leaders in almost as many days. First George Papandreou, the Greek prime minister, promised to resign, and then Italy’s Silvio Berlusconi did the same. Both leaders have been in trouble for some time, but the immediate cause of their downfall is plain: the ultimatum they received from euro-zone leaders at the G20 summit in Cannes to reform their economies—or else.
Mr Papandreou was instructed to approve the last European bail-out deal or risk losing his loans and being ejected from the euro. He scrapped his call for a referendum, and agreed on November 6th to make way for a government of national unity. With Italy’s bond yields reaching danger levels, Mr Berlusconi was told he lacked credibility and was made to “invite” the IMF to supervise his reforms. On November 8th, though, Mr Berlusconi lost his majority in parliament, and agreed to step down once the reforms are passed.
Two taboos were broken in Cannes. It was the first time euro-zone leaders accepted that a member could default and leave the euro. (And once the unthinkable is possible, why stop at Greece?) It was also the first time leaders intruded so deliberately into the internal politics of other countries.
True, the European Union has long influenced national politics. Think of how Conservative divisions over Europe contributed to the resignation of Britain’s Margaret Thatcher in 1990, or how new members have transformed themselves to join the EU, or how Italy reformed its public finances to qualify for the euro in 1999. In the past year the crisis has brought down the prime ministers of Ireland and Portugal after they needed to be bailed out.
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