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Italy's Secret Glue

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From the Winter 2014/2015 Issue "Europe Under Fire"

By Francesco Galietti

ROME—Remember the Belpaese, that quiet, sunny, relaxing dream destination for tourists. It may no longer live up to those distant memories. This may sadly be the same for much of today’s Italy, which all too often bears a stronger resemblance to H.G. Wells’s sci-fi classic The Time Machine. In Wells’s story, an English gentleman travels through time and ends in a distant future where society has divided into two new races. The Eloi, the descendants of the leisured classes, have become child-like androgynous creatures, weak and unable to fend for themselves. Their lives of leisure are enjoyed only at the cost of premature death, at the hands of the cannibalistic Morlocks. The Morlocks, descendants of the working classes long ago driven into subterranean factories, have degenerated into troglodytes, emerging at night to prey on the hapless Eloi.

Today’s Italy is not yet at the Morlocks vs. Eloi stage, but the cleavage between reformists on the one hand and radicals and anti-establishment voters on the other has never been greater. Gone are the baby boomers’ generation, including the sanctity of the European experiment and its currency, the euro. As of the writing of this article, the early November Eurobarometer, a public opinion survey conducted by the European Commission, confirms that Italy is Europe’s most Eurosceptical country. An astonishing 47 percent of the population considers the euro a “negative element” in Italian society.

ITALY’S ELOI

In the last weekend of
 October, the Leopolda, a
 youngish, hackathon-like 
event took place in Florence,
 and attracted a great deal of
 attention from the domestic media community. Over the past two years, the Leopolda has quickly become the flagship get-together of Matteo Renzi, formerly the Tuscan capital’s mayor and since February, both prime minister and leader of the Democratic Party. Scores of flamboyant financiers and industrialists— such as Oscar Farinetti, founder of the luxury gourmet empire Eataly—made their way to this cosy Tuscan Davos to worship Renzi and be seen. London-based investor Davide Serra made the headlines by asserting that the right to strike by public sector employees should be restricted. A political wunderkind, Renzi is a young and energetic leader with a keen understanding of media and spin, and a knack for political cleansing. Like a hermit crab, Renzi hollowed out Italy’s largest center-left party, the Democrats, and turned it into his nest. He then signed a pact with former archenemy Silvio Berlusconi— now his greatest ally when it comes time to crush friendly fire from the Democrats’ own backbenches—and embarked on a wild ride. Renzi’s personal and political popularity is extraordinarily high, far above the abysmal levels of other left-wing European leaders like France’s François Hollande. In the May 2014 EU elections, Renzi managed to lift his Democrats to heights Italy’s left has never seen (40.8 percent)—nearly doubling the showing of the other leading leftist party, Movimento 5 Stelle (M5S) at 21.1 percent. Berlusconi’s Forza Italia was a distant third at 16.8 percent, while the two junior members of the government never got out of the single digits, with Mario Monti’s Scelta Europea all but obliterated at a miserable 0.7 percent.

Despite his unrivaled leadership, Renzi seems keen on having some enemies—a not-so-easily-attainable goal with a big-tent coalition and the main opposition led by someone who publicly fawns over you. So far, Renzi has exchanged fusillades with labor unions, magistrates, business lobbies, and regional, and local power brokers—not to mention his own party backbenchers. Lately, Renzi has been widening his targets. At times it is tempting to think he is really just trying to make sure Italians perceive and feel that he is a neighborly David doing combat with one Goliath after another.

THE MORLOCKS

For all the fire in his belly, Renzi vastly underestimated the situation of the economy and its place in a rapidly disintegrated euro system, not to mention the context of a rising tide of Italy’s anti-politics movement. In the last weekend of October, some one million people associated with Confederazione Generale Italiana del Lavoro (CGIL), Italy’s leftist worker union, took to the streets of Rome to march against the government’s labor reforms. Most of the CGIL protesters appeared to be retired workers—a stark contrast to the youth-dominated Leopolda taking place simultaneously in Florence.

Earlier this year, in April, thousands took to the streets of Rome to march against austerity measures. Despite a massive deployment of security forces, at least 80 people, both police and protesters, were badly injured as street battles broke out, with rocks flying and police launching pepper spray. Blasts and sirens could be heard across Rome as a splinter group of masked protesters launched firecrackers, eggs, and rocks at policemen, who defended themselves with shields. One protester had his hand blown off by a firecracker he was poised to throw, and at least six people were arrested.

For those who lived through Italy’s troubled 1970s there remain vivid memories of the shape of extra-parliamentary movements, and the potential threats they pose to institutions. Indeed, any veteran of the Ministry of Interior will have no problem admitting that, from the point of view of social cohesion and order, it is better to have loud and noisy movements sitting in parliament than having them outside the institutions in the streets. Also, while the protests—and terror attacks—of the 1970s had very clear targets, the targets of today’s protests are scarcely as predictable.

GRANDPA TO THE RESCUE

As a large cash-strapped Western country with a bloated welfare state and rapidly widening differences between old and new generations, Italy seems next in line for a major intergenerational conflict. Italians born in 1970, who are about 44 now, will pay 50 percent more in taxes as a percentage of their lifetime income than those born in 1952, according to research from the Bank of Italy and the University of Verona. The research also found they will receive half the pension benefits that Italy’s 60-somethings are getting or are poised to get.

Yet Renzi, who has made a reputation for waging war against older generations’ privileges, is thus far shying away from cutting pensions. This is probably because the political cost would be too high to bear for the government. Moreover, amid Italy’s record-high unemployment, which still scarcely rivals such basket cases as Spain, Italy’s traditional famiglia remains an extraordinarily powerful informal safety net, as Italian grandpas share their money with unemployed grandchildren.

How long this can last is the leading question that may help define Italy’s place in a struggling, if still united Europe. And if it cannot hold together, is any other European nation or group in a position to come to its rescue? 

*****

*****

Francesco Galietti is a former senior advisor to the Italian Minister of Finance and the CEO of Policy Sonar, a Rome-based political risk consultancy firm.

[Photo courtesy of Palazzo Chigi] 

 

 

 

 

 

 

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