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Italy: faltering legitimacy at the heart of Europe

As Silvio Berlusconi wins another confidence vote to implement austerity measures within a faltering government, his winning slogan, – ‘don't let Government dip its hands in Italian pockets’ – has caved in. There is no plausible replacement strategy.
Giuseppe Lenzo
15 September 2011

In the last years Italy has experienced inefficient governments and lack of reform: its growth is sluggish and corruption has increased. The current political leadership of Berlusconi and his People of Freedom (PdL) party has done very little to restore stability, increase employment or improve the economy. Even before the 2008 financial crisis, economic strategy was not a success, and Italy seems doomed to ask for an EU-led bailout in the coming years.

Several problems afflict Rome, but sovereign debt is the priority: the EU’s third largest economy shows a dramatically high public debt (around 120%), which increased sharply during the 1970s and 1980s thanks to public spending by both Socialists and Christian-Democrats. However, a month or so ago, Prime Minister Silvio Berlusconi chose to make a high-profile speech in the Italian Parliament in which he  gave his personal assurance that Italy's economy is now solid and that the crisis is almost over, since the country is apparently performing even better than any analysts had foreseen. Only a few weeks later, the European Central Bank (ECB) totally undermined Berlusconi 's stance, when the stock market condemned Italy as less than reliable in repaying its debts. Rome was forced to sell its bonds at  an extremely high interest rate (6%) which essentially marks the beginning of an economic default. Then, when fewer and fewer investors showed themselves willing to buy Italian debt shares, ECB promised to do so, but only if Italy undertook the necessary reforms to put its public finances on the right path.

After news about the Italian troubles spread across Europe, Mr Berlusconi decided to tell the truth: an August press conference  saw one of his old, winning slogans – ‘Don't let Government dip its hands in Italian pockets’ – cave in, as the PM was forced to put forward a tough financial bill. Since then, Mr Berlusconi has largely ignored - to avoid losing his support base - the claims made by the Minister of the Treasury Mr Giulio Tremonti about the necessity of implementing deep spending cuts and raising taxes in order to have a healthier public balance of payments. In fact, by working to approve a bill which cuts public costs – for example, the abolition of the administration of Provinces – and increases the IVA (VAT) from 20% to 21%, the government had officially acknowledged that it had been commissioned by the ECB to continue selling its sovereign debt and maintain financial stability.

The way the economy has been handled politically raises fundamental questions about political accountability. The disaffection of Italians vis-à-vis the political sphere is steadily growing, as the public have diminishing faith in political parties. New forms of aggregation and new movements seem required in a country where the older generations do not let young people join in decision-making processes. Although means such as social networks have played a crucial role in the Arab world, the lack of large-scale protest in Italy seems to suggest that it is still a long way before real change will manifest itself. Yet, some days ago there was a gathering in Rome and other major cities to protest against this financial bill - which can bring about cuts, to be sure, but does not promote growth. The supporters of these rallies were led by the trade union CGIL (Italian General Labour Confederation) who claimed that the most disadvantaged sections of society would be particularly adversely affected by these cuts, and that there were no measures contained in this approach to  tackle the structural factors of a dull economy.

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Italy's largest trade union holds a general strike in Rome:Giuseppe Ciccia/Demotix

One example that illustrates the distance between Italian politics and citizens is the high number of people joining Beppe Grillo’s movement (Beppe Grillo is a popular comedian) which explicitly takes it upon itself to fight the system and destroy the traditional parties. One of the main initiatives of Beppe Grillo and his blog is to ‘Clean up Parliament’, which is directed at firing MPs who have been convicted by the courts. More than 350,000 signatures (necessary to present a popular bill) were collected in 2007 and presented in Rome in protest at the 25 convicted MPs who were still representing Italians in Parliament in 2005. Yet despite the fact that many international media (The New York Times, BBC, AlJazeera) mentioned this  proposal, no discussion has yet taken place in the Italian Parliament, and not one MP or party has backed the call for  a public hearing on this sensitive issue.

All the evidence suggests that this government and most Italian politicians do not have the legitimacy to run the country. Economic troubles, political debacles and social divisions – not to mention the diplomatic inconsistencies over the Libya war and the tensions with France regarding the flux of migrants – only pave the way for a rapidly deteriorating dead-end future. In June, Italians rejected the building of nuclear plants and the proposed privatisation of water in a referendum on public utilities in the country. If these political narratives are not built on now, it may soon be too late.

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