Will the ‘PIIGS’ trash Europe?

I came to Europe for a vacation and an economic crisis broke out.

It hasn’t cramped the vacation. Quite the contrary: The price of the euro has dropped to $1.26 from $1.50 last year. Gas for the rental car is still $7 a gallon and Zegna neckties are still out of range, but food and wine are much more affordable.

And it has made for interesting conversations with European friends about taxes and pensions and the way Europe’s different nationalities are still, well, very different from each other.

The Greeks, who touched off the crisis when Europe’s bankers discovered that the Athens government had falsified fiscal reports to hide a ballooning deficit, are angry that they’re being asked to tighten their belts. The Germans, who having the largest economy pay the biggest share of any bailout, are understandably angry at the Greeks for their profligacy.

And everyone in between is worried that Europe’s economic recovery, which had barely started, may now shudder to a premature halt.

Even as the Greek crisis has brought the European Community together to try to solve it, it has also made it clear that, 53 years after the launching of the economic body, Europe is a long way from political and economic unification. Every country is reacting to this crisis — a problem shared ostensibly by all 27 nations in the European Union — in its own parochial way.

In the decade since it was adopted by most of Europe, the euro — the continent’s common currency — papered over vast differences between disparate economies. But now they can’t be ignored. Consider, for example, the difference between Greece, whose deficit is gigantic, and Germany, which kept its deficit so small that the Obama administration pushed it to spend more to help stimulate a global recovery.

Behind these economic variations are widely divergent political cultures, including the cultures that allowed Greece’s Finance Ministry to consider cooking the books and still allows many Italians and Spaniards to evade taxes even as most Germans (and Dutch and Danes and Swedes) comply with more rigid rules.

Take Italy, the biggest economy on the list of those in potential trouble. Its flamboyant populist-conservative prime minister, Silvio Berlusconi, has been in and out of courtrooms for years — for high-end tax evasion, among other issues. But most Italian voters tolerate Berlusconi’s legal problems; in provincial elections in March, his governing coalition actually gained power.

It helps, of course, that the leftist opposition to Berlusconi is disorganized, divided and has had corruption problems of its own.

But as Italy’s leading writer on its national character, Beppe Severgnini, notes, many Italians find it hard to demand that their political leaders live up to Anglo-Saxon legal standards.

“It’s a little bit sensitive to say this, but a lot of people ask: Do they really expect all of us to abide by the law?” Severgnini said over lunch in Milan. “Berlusconi, in forgiving himself, forgives you as well.”

The 73-year-old Berlusconi’s sexual escapades, including a dalliance with an 18-year-old (nothing happened, the prime minister said) and a tell-all interview from a prostitute who spent the night at his beach house (he didn’t know she was paid, he insisted), seem only to have added to his charisma.

“He’s not a hypocrite; he’s a sinner who says, ‘I’m a sinner,’ ” Severgnini said. “The man has his charm.”

That wouldn’t work for a politician in Germany or Britain and not even in France, where the late President Francois Mitterrand had a daughter with a longtime mistress but kept his two-family life secret for decades.

But it appears to work in Italy, where Berlusconi’s current ambition seems to be to win the next election in 2013, pass a law to make Italy’s now-ceremonial presidency more powerful and then take that job himself.

Besides, Berlusconi, who was Italy’s wealthiest media mogul before he became a politician (he still owns three broadcast networks, the country’s biggest publishing house and a soccer team), has actually done a pretty good job with the economy. Italy’s national debt is high, but its budget deficit this year is as small as Germany’s. That tightfisted budget has kept Italy’s growth rate low, but a cheaper euro should make it easier for Italian companies to sell their goods abroad.

“We’re not Greece!” Severgnini noted mock-triumphantly. That may be Italy’s new national motto. In most of the world, the countries that have put Europe’s economy in danger are called the “PIIGS” — Portugal, Ireland, Italy, Greece and Spain. In Italy, though, the list includes only the “PIGS”; as far as Italians are concerned, they’re not in the deadbeats’ club yet.

Americans have to hope that despite the persistent disunity of European politics, the 27 EU nations can contain their crisis.

A broader European crash would be bad for our economy, which is why President Obama telephoned German Chancellor Angela Merkel a week ago to ask her to support a stronger plan to bail out the Greeks’ lenders and support the euro.

A European economic recovery would be good for us, but the euro crisis, which isn’t over yet, will make that recovery even slower than it has been so far.

Many Americans once feared a unified European economy as a tougher competitor, and a politically unified Europe as a rival for superpower status. We can stop worrying; we’d be lucky to have those problems now.

doyle.mcmanus@latimes.com