The Takeaway from Italy: A Big Loss for the Neoliberal Consensus

The cabinet of the new M5S-League government was accepted by president Mattarella. Paolo Savona, the economist whose rejection as finance minister set off the political crisis, was merely shuffled to the minister for EU affairs. As Yves Smith notes,

It is far from clear how much the coalition retreated. Savona, the proposed firebrand economy minister, is the Minister for EU affairs, and chose another Eurozone doubter, Giiovanni Tria, as finance minister. Given that it is the Finance minister that is a member of the Eurogroup, and members of the European Parliament that have some sway with the European Commission, this posting in and of itself looks like a way for Savona to poke a stick in the eye of European officials. His bully pulpit may be more important than his formal influence. But he could also influence other Cabinet members.

Jason Horowitz is up to his usual tricks. Rather than acknowledge the obvious -- that it's a big win for M5S and the League; that the neoliberals seriously erred in their attempt to block the new government; that and Mattarella's appointment of an IMF bureaucrat as prime minister was such an obvious farce it had to be immediately excused -- Horowitz disingenuously summarizes,

An inconclusive election led to months of stalemate. Mr. Mattarella threatened to form a caretaker government, which triggered the formation of an alliance between the Five Star and League parties. After weeks of intense negotiations, they presented a prime minister and a cabinet that Mr. Mattarella rejected.

The president was about to exercise his authority to create a caretaker government but held off, as the populist parties struggled to give it another shot.

Mr. Di Maio, 31, triumphant after his party claimed a third of the March vote, was this week reduced to imploring Mr. Salvini to abandon his calls for another election. With grumbling growing inside his own party, Mr. Di Maio needed help forming a government.

This is not what happened at all. What happened is that the neoliberal center collapsed literally overnight when its god the market rejected Mattarella's move. There was zero chance of the Cottarelli technocratic government surviving a confidence vote. It's a huge loss for the neoliberal governing consensus. That's the takeaway.