The United States and Italy: Forbidden Games

As if the economic situation was not bad enough! The return of petty political calculations, which we have seen these days on both sides of the Atlantic, creates at best misunderstanding and at worst a sense of exasperation. These little games among friends threaten nothing less than the United States’ fragile return to growth and the recovery of the eurozone. Two bright red flags have been waved for investors.

It is easy to believe that the shocks Western economies have been feeling since 2007 have not changed the habits of some elected officials. We can also believe that the rise of extremist parties is only a working hypothesis, although it is a very real threat everywhere in Europe. After six tumultuous years, we nevertheless expect that elected officials will close ranks to avert a crisis. But that is clearly too much to ask members of Berlusconi’s party, who stand ready to overthrow the Letta government to give their leader yet another reprieve. The same goes for American Republicans, who are more than willing to torpedo President Obama’s second term.

In the face of these dual dangers, the markets have so far remained calm. They react, certainly, but only in good form. This is for two reasons. Firstly, because they are convinced that these psychodramas will once again be resolved. The United States was supposed to have responded last night, and we’ll know more tomorrow in Rome. But the market’s “optimism” is mainly related to the decisive actions of two men: Ben Bernanke and Mario Draghi. In the fog of uncertainty, the Fed chairman and the European Central Bank chairman seem to be irreplaceable beacons of light. They just need to maintain the status quo. They have tried to do this in recent weeks, when Bernanke postponed the end of the Fed’s ultra-loose monetary policy, while Draghi spoke of a new, massive support plan for European banks. These were two buoys launched to prevent the U.S. and European economies from sinking in the face of rising political risks. The problem is that the bank leaders’ credit is not inexhaustible. And the institutions that they lead are not without their limits. It is therefore urgent that policymakers consider that the time given to them by these central bankers is not an authorization for them to maintain their practices, but is rather a shield whose resistance is beginning to weaken.