Establishment Parties in E.U. Indebted States
“Unimaginable and shameful cases of embezzlement and corruption” were multiplying, according to President Napolitano, Italy’s head of state.

As residents of the state of Italy strained to cope with tax increases, pension cuts, and other austerity measures pressed by the E.U. (as per the influence of the state of Germany) in 2012, “unimaginable and shameful cases of embezzlement and corruption” were multiplying, according to President Napolitano, Italy’s head of state.
The statement came in late September, when tens of thousands were marching and tossing firebombs in Athens to protests additional budget cuts in the state of Greece. While not productive, such a reaction is at least understandable as frustration naturally builds when a political (or business) elite benefits in a crisis as the vast majority of people pay the price. Italy’s audit court estimated at the time that corruption was costing the state’s economy as much as 60 billion euros a year, which is equal to about 4% of the state’s economic output.
For example, a local lawmaker in Berlusconi’s conservative People of Freedom party embezzled 1 million euros ($1.29 million) from taxpayer-funded party coffers. Understandably, voters in the state were gravitating to the non-establishment parties. The same trend had occurred in Greece six months earlier, giving rise to the need for a second election so a government could be formed. In Greece, the establishment parties held on to form a government. Austerity-driven politics can be dangerous, even volatile. Historically, ruthless dictators have risen to power out of such voting. Nevertheless, amid the austerity of 2011 and 2012, the ability of the political establishment to hold on to power is perhaps just as dangerous. Even though several state leaders, such as Sarkozy of France, were toppled, their replacements maintained the status quo, making only minor adjustments. To the extent that the German-led austerity-based strategy is inherently imbalanced or otherwise flawed, majorities of voters in Italy, Greece and Spain ought to have been putting in “anti-establishment” governments rather than the “same old, same old” change of one establishment party for another. The latter change is largely cosmetic, and the appearance of change permits the energy for systemic change to dissipate. Hence, corruption in Italy (and presumably Greece and Spain as well) could go on as the ordinary residents suffered from too much emphasis on austerity at the expense of economic growth.
Put another way, the election of anti-establishment parties in a state under a heavy austerity plan can result in the enactment of systemic-level legislation that cuts at the heart of the gorging by the major parties. Rather than putting people’s very survival at risk through cuts in sustenance programs, such reform is really what the Germans have been after. Indeed, it could be combined with stimulus spending sans kick-backs. In short, the status quo was able to survive on the backs of the poor and unemployed middle-class, with the austerity reducing consumption demand (and thus increasing the need for entitlement programs) rather than being oriented to the political elite and its patrons. Removing or significantly reducing the “gorging at the trough” would, I suspect, have less negative economic impact than do the cuts in the entitlement programs because the wealthy do not tend to spend the additional wealth. Therefore, while Europe should definitely avoid electing future dictators, neither should the establishment parties get the benefit of “but I’ve always voted for them.” By definition, crisis means that the usual way of doing things no longer applies.
The vital change that is necessary on the state level in Italy, Greece, and even Spain may even require governments of no establishment parties. The habitually-running trains, as it were, must be taken out of service to be overhauled; otherwise, their continued operation could put the mechanics themselves at risk, not to mention their work. The austerity-based electorates may not be radical enough, and therefore may be paying the price in terms of austerity directed at them rather than the elite.

Source: Stacy Meichtry and Giada Zampano, “Scandals Rain on Berlusconi’s Party,” The Wall Street Journal, September 27, 2012.