Italy has entrusted its future to an unelected caretaker government of technocrats, led by Mario Monti. Markets are rightly sceptical that he will be able to ensure that the country will implement the harsh economic and social reforms necessary for it to deal with its financial crises, which is threatening stability in the Eurozone and the rest of the world. Yields on Italy's ten-year bonds have hit an unsustainable seven per cent.
As technocrats come to the fore in Italy and Greece, it is perhaps worth remembering that it was the "smartest people in the room" that developed many of the arcane financial instruments that created and then imploded the global financial bubble. Monti and the new Greek prime minister and former central bank governor, Lucas Papademos, must be aware of the dangers of arrogance and over-confidence in their technical skills. And, while both are riding a wave of popular support, their citizens have yet to feel the real bite of their austerity and liberal market programmes. While these programmes are necessary, government is as much about people as it is about technical ability. When inevitable protests erupt, the Italian cabinet might find it needs a popular politician to help it stay the course.
