Italy's election matters -- here's why

Will Italians this weekend elect a center-left government headed by a former Communist? Or will they make the pivotal figure in their next government a former comedian who now leads a new movement that stands for suspending payments on the national debt and holding a referendum on Italy remaining in the euro currency?

Or will the Italian electorate???hold onto your hats???turn for the fourth time to former Prime Minister Sylvio Berlusconi, who has been tried about 30 times, but convicted only three (with verdicts timed out or overturned)? Now 77 and engaged, the billionaire media mogul is again leading his People of Liberty Party in elections Feb. 24-25.

The Italian election can be viewed as comedy or tragedy, depending on one???s point of view. But most importantly, the outcome of the race in a few days to determine who???s in charge of Europe???s fourth-largest economy will be watched closely by the White House as well as the world???s major economies.

Not quite alone among Europe???s debt-wracked economies, Italy???s performance shows strong signs of recovery. Where the economies of sister industrial nations Germany and France shrunk slightly, Italy???s actually grew from 98.9 points in August to 99.0 points in September, according to the Organizations for Economic Cooperation and Development (OECD).

Worries that Italy would be the fourth European economy to decline were assuaged. There was no further discussion that Italy would follow in the footsteps of Ireland, Portugal, and Greece and require a multi-billion dollar bailout from the International Monetary Fund, European Union, and European Central Bank.

Credit for Italy keeping its head above water is almost universally given to Prime Minister Mario Monti, an economist never elected to anything who was tapped to head the government last year when Berlusconi was forced out. With his cabinet of technocrats and his agenda of slight tax increases with major cuts in spending, Monti has overseen nothing short of a rescue of his nation???s formerly uncertain economy. Monti???s reform program, as Angel Gurria, secretary general of the OECD, told ???Review Italy??? in December, ???are laying the foundations for a stronger, more competitive and more inclusive Italy??? and ???the benefits of these measures could raise Italy???s GDP by some 4 per cent over the next ten years.???

It is widely rumored in Washington that the Obama administration wants very much for the 69-year-old Monti to remain in power in Rome. But in all likelihood, that is a long shot, at the very best.

A colorful cast of characters

Like the late University of Boston President John Silber when he ran for governor of Massachusetts in 1982 or retired General (and onetime Olympic great) Pete Dawkins running for senator from New Jersey in ???88, non-politician Monti has never been able to adapt his obvious acumen to the political arena. Late last year, in launching his first-ever bid for office, the premier tried to cobble together a centrist alliance with the help of Ferrari head Luca Cordero di Montezemolo and Pier Ferdinando Casini???s Catholic UDC Party. By all accounts, Monti???s hastily-formed alliance is consumed by arguments between its different factions and most polls show the prime minister???s political vehicle running fourth in the elections this weekend.

The same polls show a near-tie for first place between the center-left Democratic Party led by former Communist Pier Luigi Bersani and Berlusconi???s center-right party. Ironically, neither man was supposed to be leading his party. Backed by grass-roots activists on the left, Bersani won an upset in the primary over 37-year-old Florence Mayor Matteo Renzi, a telegenic ???modernizer??? likened to Bill Clinton and Tony Blair. After months of insisting he was not a candidate and would defer to his protégé Angelino Alfano, the former prime minister resurfaced and took over the helm of the party that is funded primarily through his personal fortune. Long considered an economic conservative and admirer of Ronald Reagan, Berlusconi is now running as an opponent of the austerity identified with Monti.

And that leaves the comedian: Beppe Grillo, formerly Italy???s David Letterman and Jay Leno, who now heads the new Five Star Movement (M5S) that is roughly the Italian tea party. Grillo and Five Star want a vote on remaining in the euro currency, an end to paying off national debt, and an end to Monti???s austerity program (which Grillo calls ???rigor montis???).

It???s a colorful cast of characters. How it plays out next weekend is uncertain. The only thing that can be said with certainty about the outcome is that it will have an impact across the world.