A former European leader was a guest at a private dinner in London recently. It was a polite and reverential occasion, but conversation grew lighter as Sauternes gave way to port. What, he was asked, is the most effective form of government? Easy, he replied, look at Europe: technocrats know best and they can ignore short-sighted voters.

A battle between technocracy and democracy has broken out in Europe, as democratic Germany and technocratic Italy disagree over the next step in the euro-crisis. Last week’s G20 summit promised progress; Germany agreed to use EU bailout funds to reduce Spanish and Italian borrowing costs. It was hoped that this might inaugerate the age of Eurobonds — a key Italian objective informed by the belief that fiscal transfers are the country’s only possible salvation.

But, Angela Merkel has again said that there will only be Eurobonds over her dead body; a statement that reflects German voters’ pronounced hostility to the idea. The Italian Prime Minister, Mario Monti, responded by delivering an evisceration of German policy on the floor of Italy’s parliamentary chamber and it is rumoured that he threatened to resign. The rumour was swiftly denied by authorities in Rome; but speculation about the future of Monti’s government persists, with some commentators suggesting that it is logical for a government appointed by Brussels to disintegrate if Brussels will not let it govern.

This vacuum is stoking talk of change and elections. Out of uncertainty crawls the familiar frame of Silvio Berlusconi, the self-professed father of the nation and leader of the largest party in the Italian parliament. He has been firing mad provocations at all and sundry over the last month, in a blatant pitch for popular support. In Berlusconi’s bunga-bunga world, Angela Merkel is a demonic she-elephant and austerity a foreign innovation. It is time for an insurgency. Berlusconi has said that if the ECB does not ‘act like the Fed’ then Italy should print its own euros, which is surely the first time that a politician has advocated counterfeiting the national currency. Finally, he insists that it is ‘not blasphemy’ to talk of Italy leaving the euro.

This litany of retrospective euroscepticism is especially ironic given that Berlusconi was, if not an architect of the European mansion then certainly one of its interior designers. The general lack of conviction, the inconstancy, is what makes the august gentleman who came to London a few months ago despair of democracy. But, equally, his unpalatable solution seems to be no more effective where the Eurozone is concerned.

Tags: Angela Merkel, Euro-crisis, Germany, Italy, Mario monti, Silvio Berlusconi