Technocrats

This is the beauty of the parliamentary system of government. It allows ill-suited leaders to be replaced with minimal trauma.

This week opened in Rome with the Italian parliament voting on the budget proposal submitted by Silvio Berlusconi’s government. That budget was passed by a resounding margin, 308 for and only 1 against.

But this was not the whole picture. The opposition, and some from Berlusconi’s own party, decided to abstain. In all, 321 deputies abstained from the vote. More deputies abstained than voted. The writing on the wall could not be clearer.

Berlusconi won his budget but lost his job.

Hours after the vote, Berlusconi announced his resignation as head of government. Had he not done that, a vote of confidence would have followed, the 52nd such vote in less than three years. The gregarious Tuscan would have lost that. In previous votes of confidence, he got by with the narrowest of margins. This week, his political stock had simply crashed through the floor.

What a civilized way of doing things.

The opposition did not have to hold the national budget hostage to partisan design. They showed their numbers, and their displeasure, without being too explicit about it. The story, after all, is best told by the fiscal numbers and not by the flourish of political speeches.

Enough talk. Some hard work needs to be done the next few days.

Berlusconi is a lovable oaf, but an oaf nonetheless. People no longer want to talk about his orgies or wallow in their leader’s lost love life. They no longer want to listen to his vacuous oratory. They need to be led by someone with a plan, no longer by someone with just the charm.

Italy’s outstanding national debt now stands at 120 percent of the country’s GDP. In a word, its debt was now larger than its economy. This is not a small economy, mind you. It is Europe’s third largest. That sends powerful ripples of panic through the world’s markets.

Immediately before the budget vote, the interest rate for Italian sovereign borrowing spiked to a record high of 6.73 percent. Unless something dramatic happens in the way this country is economically governed, the pricing for Italian bonds (reflecting the risk involved in lending to a land with lackadaisical leadership) will simply be unsustainable.

Berlusconi can no longer be the one to provide the dramatic and tough changes that need to happen. Despite his many colorful years as prime minister, he really has no track record for economic governance. His people have lost confidence in him. There is no room for the politics of bread and circuses in the dire straits Italy now finds itself in.

There is now a frantic search for someone to lead the unity government in the offing in Rome. That unity government brings together the political parties behind an agenda to pull Italy out of its fiscal predicament. The public sense is that Italy needs a technocrat at this time, not a politician.

That is the same sense in Greece at this time.

Like his contemporary Berlusconi, George Papandreou was in denial for a long time. He tried to hold on to power by holding hostage to an unseemly referendum the pan-European financial package forged last week. That ploy backfired. Not only did it alarm the global market, in angered the political parties at home.

A week is truly a short time in politics.

Last week, Papandreou was riding high on what seemed like an EU consensus to save Greece from bankruptcy even at great costs to the other, better governed, countries in the Eurozone. But his functionality in the quickly changing scheme of things ran out rapidly.

This week, a rare consensus formed in Athens. All the political parties closed ranks to endorse that tough package of fiscal reforms required to pull the Greek economy out of bankruptcy. That consensus also excludes Papandreou from the equation.

Like Berlusconi, Papandreou will be out of a job this week. His impressive political lineage will not save him from the fact that he has become irrelevant to the task of meeting the challenges ahead.

As of this writing, hard negotiations are happening in Athens over the terms of a unity government that will lead the country out of this mess. According to reports, a leading Greek technocrat is being summoned back home to lead the nation through the difficult phase of adjustments that lies ahead.

Lucas Papademo, whose name is now increasingly mentioned, is a former governor of the Greek central bank. A trained economist, he now lectures at Harvard. By no means a politician, he is considered the man capable of putting together a plan and rallying his people behind it.

The other possible leader is Papandreou’s own finance minister, also a technocrat with a firm grasp of the requirements for adept economic management. This was the man who immediately, and loudly, denounced Papandreou’s bizarre proposal to hold a referendum on a clearly unpopular but absolutely necessary package of reforms.

The events in both Athens and Rome indicate a vital shift in legitimacy from politicians to technocrats in a period where all the vital issues are economic and financial in nature. Enough of those who give speeches without substance, who imagine the world in partisan terms and are incapable of putting together grand plans for nations.

The beauty of the parliamentary form is that it allows this shift to happen, feasibly easing from power those who have outlived their relevance to the complex challenges facing modern economies. Too bad we do not have the institutional means to do that here.