Can Europe Make It?

A story of Italian neophytes and Spanish constructors

What happens in these two countries matters and deserves much more attention. It is also time to re-assess the forces at play in Europe and claim a more equal union.

Giovanni Biava
9 July 2018
lead

Matteo Salvini, Deputy Prime Minister of Italy and Minister of the Interior takes a selfie with his supporter in Orbassano near Turin, Italy, on 15 June 2018. NurPhoto/ Press Association. All rights reserved.

Italy and Spain have new governments. Not many have noted this, apart from those who fancy reporting on the supposed ‘colour’ of Italian politics or Spain’s (usually successful) football. Italian politicians might be ‘neophytes in wild parade’, to paraphrase a sentence by the Resistance writer, Beppe Fenoglio, but there is also much more to it. The sum of Italy’s and Spain’s GDP is higher than India’s and slightly lower than Germany’s; the two countries have four banks in the world’s top 50, in contrast with Germany’s single case (Deutsche Bank). In other words, calling Italy and Spain ‘EU’s periphery’ is frankly ungenerous, even in purely quantitative terms.

What happens in these two countries matters and deserves much more attention. It is also time to re-assess the forces at play in Europe and claim a more equal union, especially in the Eurozone.

Electoral legitimacy

For all its limits, the unusual Italian ‘yellow-green’ coalition government reflects the choices of a vast number of citizens. This is the first time since in late 2011 an entirely ‘technocratic’ government of unelected experts, led by Mario Monti, was catapulted into politics by President Napolitano as a result of urgent public debt issues. Let us not forget that, since the end of the Cold War, Italy has had other ‘technocratic’ governments (Ciampi and Dini in the 1990s), some governments led by academics with party experience (Amato and Prodi in the 1990s and 2000s), and only two led by professional politicians (D’Alema in 1998-2000 and Renzi more recently), who actually became Prime Ministers without winning the ballot. On top of all of the above there has been the ‘Berlusconi case’. So it is fair to say that at least the inexperienced Conte-Di Maio-Salvini government has some electoral legitimacy (The League and the Five Star Movement altogether received about 16 million votes for the Chamber and slightly less for the Senate).

Such a legitimacy is what the highly experienced President, Sergio Mattarella, clearly disregarded when he vetoed the appointment of Paolo Savona as Economy Secretary, only to accept the latter a few days later in a less important role (European Affairs Secretary). Mattarella deemed Savona’s appointment was risky because of his supposedly ‘Euro-sceptic’ ideas. To be honest, Paolo Savona, a well-known Economics Professor and an expert on international monetary relations, is not an ‘anti-European’ or ‘Euro-sceptic’: he is rather critical of the current European Monetary Union, which in his view would be bound to either fail or damage some countries, especially in eastern and southern Europe. It is, in fact, difficult to disagree with these considerations. Moreover, why was Mr Savona’s appointment vetoed in the first place? Was it because of ‘fear of the markets’? If that is the case, where has democracy gone?

Techno-pop mix

After a tremendously long gestation, the new Italian government includes an odd mix of ‘populists’, ‘technocrats’ (among them the Prime Minister and the Economy and Foreign Affairs Secretaries), and ‘nationalists’ (mainly, the League). ‘Populism’ has become a catch-all expression which is increasingly losing explanatory power. What we are witnessing in Europe and the West is rather the rise of nationalist groups (Trump’s ‘alt-right’, the UKIP, the Front National in France, Hungary’s Fidesz, Poland’s ‘Law and Justice Party’ etc.) which often join forces with experts (or ‘technocrats’) and give rise to unusual ‘techno-pop’ blends.

For example, the current Orban government in Hungary includes six independent ministers, mainly economists, jurists, and even a general, who is in charge of Defence. This phenomenon is not new and reflects the attempt to combine nationalism and economic development, to rhetorically please disaffected ‘peoples’ and tame international markets with ‘expert’ guidance of the economy and sometimes foreign affairs. But can this work? Countries like Hungary, Poland, and the Czech Republic are now growing quite fast but mainly due to Foreign Direct Investment and only after a deep economic collapse in the 1990s. Is Italy on the same path?

Spain’s story looks quite different. Its economy has again been booming since 2015. Its institutional stalemate has been resolved quickly: the Socialist Pedro Sanchez became Prime Minister just two days after his predecessor, Mariano Rajoy, had lost a crucial confidence vote. Spain’s political system is efficient also because no-confidence motions have to include the name of a new Prime Minister. Spain is a newer, ‘fresher’ democracy, born in the late 1970s and generally used to Left/Right alternation. Spanish ‘populism’ has mainly taken root on the Left; let us think about Podemos. Although Spanish governments have often included independent experts (and the Economy portfolio in the current cabinet is in the hands of former EU Commission civil servant Nadia Calviño), no ‘technical’ executives have ever been formed. That said, Spanish politics is fraught with regional issues (Catalunya is the biggest example) and the Spanish economy keeps raising more than one concern.

After all, the pre-2008 boom was mainly due to a ‘financial-construction bubble’, which led to building about 5 million new houses and left Spain’s territory dotted with ghost airports, railway stations, and even towns. The current recovery, although in part based on more ‘solid’ sectors, has again a lot to do with finance and housing, which in turn is linked to tourism.

Southern Europe

Italy’s economic structures are very different, being based on a traditionally strong and export-led manufacturing sector. The two countries’ economies and political systems have more differences than similarities, and putting them in the same ‘southern European (not to mention ‘periphery’) basket’ is to some degree misleading.

While Italy’s issues of public debt and corruption and Spain’s property ‘hangover’ cannot be denied, the EU has responsibilities in both countries’ economic troubles. Under the Maastricht parameters, Italy and Spain, which are used to stronger state intervention in the economy, risk a future of marginalisation, as happened to eastern Europe under neoliberal austerity policies in the 1990s.  

Moreover, a democratic Europe cannot afford a future of populist nationalism combined with technocracy. The latter is after all a mask to cover neoliberal politics dictated by the EU or EU-led elites, as Italians know well, having lived through Mr Amato’s harsh austerity measures in 1992. Europe deserves better.

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