The Italian prime minister has warned that Italy's voters will not tolerate deeper cuts to the nation's budget
Mario Monti, the Italian premier, was meant to be the technocrat's technocrat – a former European commissioner and academic economist who would rigidly implement the demands of Brussels and the financial markets.
But it's always been an illusion that you can take the politics out of decisions about where and how to swing the axe. Monti brought that message loud and clear to Berlin on Wednesday, warning Angela Merkel that the Italian people will only put up with so much.
"I am demanding heavy sacrifices from Italians," Monti told Die Welt newspaper. "I can only do this if concrete advantages become visible." If not, he said, "a protest against Europe will develop in Italy, including against Germany, which is seen as the ringleader of EU intolerance, and against the European Central Bank."
In other words, Monti is not just dealing in abstract calculations; his decisions will have a severe impact on the lives of ordinary Italians, and they're entitled to ask what it's all for – particularly when many analysts believe the end result will be a deeper recession and an even worse outlook for the public finances.
That fear is reflected in the fact that Italy's bond yields remain above 7%, close to unsustainable levels, despite the latest austerity measures, which were meant to offer comfort to investors nervous about Italy's fiscal position. Instead, they have deepened concerns about a likely recession.
It's worth remembering just how much pain is being inflicted on the Italians. Dario Perkins of Lombard Street Research points out in a new note that even under Berlusconi, spending cuts and tax rises worth 2% of GDP were already due to take effect in 2012.
Monti has since announced an extra €20bn of additional austerity measures, or another 1.3% of GDP, for this year alone. That will squeeze economic demand severely, just as almost every other continental economy – as well as the US and the UK – launches its own austerity measures.
The OECD estimates that the deflationary impact of fiscal tightening increases by almost a third when other countries are cutting back too. Growing hardship in Italy – and in Spain, where youth unemployment is already above 40%, and the new rightwing government has also joined the austerity bandwagon – is inevitable.
Like the Greek politicians raising the spectre of state bankruptcy, Monti is trying to strengthen his own hand in tough negotiations. But he's quite right to warn of the heavy political risks of the course Europe's leaders have chosen.
By signing up to the new "fiscal compact", they are locking austerity into the very DNA of the eurozone, even as the evidence mounts from Greece and Portugal that it inflicts unbearable social costs without delivering the promised dividend for the public finances.