Italy

The new government must quickly enact unpopular reforms to right the country's economy. This may cost its leaders their careers, but a consensus plan would be toothless and would come too late.

To outsiders, Italian Prime Minister Silvio Berlusconi may appear to be an Italian extravagance. But behind the political and sexual scandals hides a history of moral malaise.

Italy's entry into Europe's single currency was a triumph of fiscal displine over a long history of profligate spending. But Italy's embrace of European institutions is driven by more than just economics. "Europe" has helped Italy cement its national identity, clean up its politics, and modernize its laws. Although the European Union will never replace Italians' regional or national allegiances, it will always find its staunchest supporters in Rome rather than in Paris, Brussels, or Berlin.

Italy's Socialist Party is center stage, brought there by political transformations at home and abroad. Internally, changes in the Italian electorate have caught the Communist Party and the Christian Democrats flat-footed, helping to plunge these major protagonists into crisis. Externally, the spectacular performance of the French Socialists, and the recent victory of the Greek Socialists, lead many to argue that in Italy too the Socialists represent the wave of the future.