September 20th, 2011
07:54 AM GMT
(CNN) – The news that Italy, the eurozone's third largest economy, was downgraded by credit ratings agency Standard & Poor’s dealt another blow to hopes of a sustained market recovery Tuesday.
The second paragraph of S&P’s report on the downgrade speaks volumes about the debt-laden tumult spreading across developed economies:
“In our view, Italy's economic growth prospects are weakening and we expect that Italy's fragile governing coalition and policy differences within parliament will continue to limit the government's ability to respond decisively to domestic and external macroeconomic challenges.”
It’s a script torn from the same page as the U.S. – the gold standard of debt worthiness – when it watched its debt rating reduced by S&P in August , as partisan brinkmanship put Washington near the edge of defaulting on its credit card bill.
The Greek debt drama will turn two years old this December, and still the European Monetary Union appears to lack the leadership to get chart a clear solution out of the debt contagion that has hit Ireland, Portugal, Spain and now Italy.
Meanwhile in Japan, the world’s third largest economy just elected its sixth prime minister in five years.
Italy recently turned to China to help the nation with its debt woes, much like the rest of developed world appears to rest their hopes on a Chinese-led global recovery. But Chinese leadership has problems of its own – as Premier Wen Jiabao recently told a group of business leaders that “countries must first put their own house in order.”
A few weeks ago, the media world seemed to prematurely eulogize Steve Jobs when he announced he was stepping down as Apple CEO for health reasons. Since then I’ve had the Flaming Lips’ song “Waiting for Superman” in my head. Somehow, watching a brilliant business leader take a step back from the company he founded underlines how few leaders – in politics or in business – truly inspire public trust and confidence.
As today’s downgrading of Italy shows, our wait for a Superman to lead us out of the credit crisis may be more like “Waiting for Godot.”
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