David Prosser: Dark days for democracy in the eurozone

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The Independent Online

Outlook In the clamour to resolve the Italiancrisis before the country blows up the eurozone, there has been remarkably little complaint about the appointment of a Prime Minister who has never once stood for election, or even about the suggestion that he may appoint a cabinet stuffed with technocrats similarly untested at the ballot box. For all Mario Monti's intellectual qualities andrelevant experience, his mandate to govern comes not from the Italian people who will presumably now bear the brunt of the austerity he has no choice but to order.

For Italy today, read the rest of the eurozone tomorrow. What is happening there will be the inevitable result if those calling for fiscal unity across the single-currency bloc get their way. Member states will retain their elected governments, but their powers to tax, spend and borrow will be boxed in by parameters set elsewhere – by the technocrats of a eurozone finance ministry based, presumably, in Brussels or Frankfurt.

That is not to say fiscal union is the wrong option for the eurozone. Far from it, for as long as single currency zone members are free to disregard supposedly agreed fiscal standards, the bloc will be vulnerable to a repeat of the sort of crisis it is currently suffering.

Nevertheless, this will be a bitter pill for many citizens of the eurozone to swallow. The bond markets may notbelieve in democracy, but not everyone is ready to give it up – even, in the longer term at least, in Italy.

No investment manageris totally infallible

Warren Buffett's investment in IBM says as much about the evolution of the world's best-known computing business as it does about the sage of Omaha himself. Mr Buffett famously eschews technology companies on the grounds that investing in businesses he doesn't understand is a recipe for disaster. But these days, IBM is not a technology company, or at least not a pure play on computing. Rather, it sees its future as a specialist consultant to organisations large and small seeking expert help with their technology requirements.

Still, with IBM's shares performing so strongly in recent years – up 28 per cent in 2011 alone – Mr Buffett's decision to buy the stock also appears to run contrary to his traditional affinity with the principles of value investment. It will be fascinating to see whether the move pays off.

If not, IBM could yet prove a rare black mark for Mr Buffett, who knows all too well that even star fund managers are only as good as their last trade. Just ask Anthony Bolton, who is arguably as close as Britain has got to producing its own Warren Buffett. Fidelity's star man must be regretting his decision to come out of retirement to run a fund specialising in China – its performance has been so poor that it threatens to mar his remarkable career track record.