Last week I posted my interpretation of the election that just had been completed for the European Parliament and the good showing that the party of the new, young prime minister of Italy, Matteo Renzi received in that election.
People who commented on this post were not only doubtful about the ability of Mr. Renzi to achieve anything within the Italian government, but were also doubtful that Italy and Mr. Renzi could possibly become a source of inspiration for other governments in Europe having problems.
The Financial Times has now suggested that Mr. Renzi might fill exactly the role I put forward in that post. This viewpoint was expressed first in the editorial "Renzi's Chance to Change Italy" and second in the opinion piece by regular columnist Wolfgang Münchau "Renzi Needs to Muster Euro Allies for Italian Rescue."
Although the articles in the Financial Times did not believe that Renzi position was a "slam dunk" to achieve these hopes, they recognize that he currently represents the best chance for anyone in Europe to lead the change to reform.
Mr. Münchau writes, "The most important election result last week…was the astonishingly robust victory of Matteo Renzi in Italy." The facts are, quotes the editorial, Renzi's party produced "the best showing by any party in an Italian national election since 1958."
This editorial continues, "Across Europe, mainstream leaders-especially on the center-left-are nervous about implementing painful economic reforms to raise growth."
"Mr. Renzi's victory serves as a valuable lesson that a mainstream European government promising an ambitious reform program can win the confidence of the electorate."
"But Mr. Renzi's reputation will not grow by much if Italy's economy remains in the doldrums….If Mr. Renzi takes decisive action now the prize awaiting him is to become the standard-bearer of reform in Europe."
Mr. Münchau concludes, "There are reasons to doubt the Renzi agenda, I am not certain that he will succeed. But, for the moment, he deserves the benefit of the doubt."
On Monday, Italy and France got encouragement to "accelerate their economic reforms." This is one thing that Münchau said was absolutely necessary. That is, Mr. Renzi needed encouragement - as well as warning - from allies throughout Europe to follow through on his efforts to reform the Italia government and nation.
Mr. Renzi faces huge tasks. For one, the Italian economy is weak and prospects for growth are not that good. The national debt could rise to as much as 134 percent of GDP this year according to Morgan Stanley. And, the labor unions are not big fans of the young prime minister.
Still the time seems to be ripe and there seems to be lots of support coming not only from within the Italian nation, but also coming from within the eurozone.
Pier Carlo Padoan, the Italian minister for the economy and finance acknowledged on Twitter that Italy "must accelerate reforms and privatizations" to reduce its debt "in a sustainable manner."
Thus, support seems to be building for the young prime minister to take his "best shot" at reforming his country. And, in a real sense, other "leaders"…if you can call them that…are waiting to see what Mr. Renzi can accomplish. Right now, he seems to be the "best hope" that Europe has…and for the time being, as Wolfgang Münchau writes, we need to give him the benefit of the doubt.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.