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Italy Premier Renzi’s Endgame

What is Italy’s Matteo Renzi’s endgame? So far, despite his government’s reforms, Italy still hasn’t really dragged itself out of recession. Last year’s GPD growth at 0.8% was less than stellar. Italy’s 2016 GDP growth might be slightly over 1%, then again, it might not.

Whatever happened to the ‘recovery with a bang’ that Mr Renzi promised would have come in the final half of 2014? Who knows, Italy is still waiting. Still, Mr Renzi remains optimistic even if the rest of the nation is not so sure as evidenced by Mr Renzi’s falling popularity rating.

So what exactly is Italy’s prime minister trying to achieve? Here’s a little speculation from this Italy watcher.

First of all, cast your minds way back to the year 2000 when Italy’s GDP growth hit 3.71%. At that time, Italy’s was its usual badly run self but businesses survived.

Yes, there was lots of corruption and the nation’s avaricious politicians wanted their cuts but everyone was making money so the corruption was tolerated. Then the storm hit, businesses shut down right, left and centre. Italy’s national debt climbed to terrifying levels and the skills of Italy’s political masters, or rather lack of them, became clear for all to see. In actual fact, the GDP chart above demonstrates quite clearly that Italy’s politicians have been leading Italy downhill for quite a while. Perhaps more Italians should take a look at the GDP “growth” chart.

The mid 2000s global crisis mess culminated in the removal of Silvio Berlusconi. Italy then ended up with a government of technocrats which helped steer the nation from the abyss but as soon as this occurred, the political establishment wanted back in.

Elections were held resulting in the second choice of Enrico Letta who acted as a sort of caretaker but he was unable to heal the nation’s ills so Mr ‘Demolition Man’ Renzi was given a crack of the whip. Mr Letta was cast aside.

Renzi’s Very Patchy Reform Record

Mr Renzi has passed quite a number of reforms though they have not really helped steer Italy back on track.

The mother of all the reforms is a major change to the constitution which will effectively downsize Italy’s senate and change Italy into a mono-cameral parliament.

Justifying this idea is that the change will make it easier and far quicker for future Italian governments to debate and pass laws. Before the change can be implemented however, a referendum has to be held. The referendum should happen towards the end of 2016.  If Italy’s citizens reject the reform of their parliament, then Mr Renzi may well be sent packing and he has hinted that if the referendum goes against the reform, he will leave.

In the meantime, to keep his hotch potch government afloat, Mr Renzi has been forming alliances with all and sundry including those on Italy’s political right.

Suspect Partnerships

In addition to a suspected pact with Silvio Berlusconi, Mr Renzi’s allies include persons of dubious character such as one Denis Verdini, a fellow Tuscan and former right hand man to Silvio Berlusconi.

Mr Verdini who “has been charged for corruption and participation in illegal secret activities, aiming to influence the verdict of the Italian Constitutional Court” and is also under investigation for questionable business practices and other alleged instances of corruption. Needless to say, the overnight transformation of someone who should have been on Mr Renzi’s demolition list into a bedfellow raised eyebrows.

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Really though, Mr Renzi had no choice – he needed the votes of Mr Verdini and his parliamentary group of ex-Berlusconi-ites to push through certain reforms. Without Mr Verdini, Mr Renzi would have sunk.

Mr Renzi, it seems, will stop at nothing to keep himself where he is. Whether he’s doing this for the good of Italy, as he claims, or whether he’s doing it to consolidate himself as Italy’s top dog is not clear.

As well as cultivating relationships with somewhat unsavoury characters – people who are perhaps to blame for Italy’s malaise and who really should be sidelined, Mr Renzi’s reaction to the attempts of one of his own party members, former mayor of Rome Ignazio Marino to clean up the corrupt rot which has crept into every corner of Italy’s capital was, to say the least, strange. Instead of offering his support to fellow demolition man Mr Marino, Mr Renzi couldn’t wait to see the back of him. Why?

Probably because Mr Marino, had he been allowed to continue, would have uncovered so many unholy relationships that Mr Renzi’s wobbly house of cards would have come tumbling down. While one cannot know, one suspects that Mr Renzi was told to get rid of Mr Marino or else lose the support of the likes of Mr Verdini and others. Anyway, Mr Marino was sent packing and Mr Renzi’s alliances stood firm.

Renzisconi The Ex-Demolition Man

Recently, Mr Renzi has been having a go, Berlusconi-style, at Italy’s judiciary and magistrates who have been uncovering corruption. One set of investigations led right up to the front door of Italy’s minister for economic development who appeared to have been gathering contracts for her boyfriend. The minister wasted no time in resigning but the damage had been done. Mr Renzi’s reputation as a ‘demolition man’ was just about in tatters.

Even more recent revelations that one Mr Renzi’s regional PD party presidents in the mafia riddled region of Campania had been allegedly cosying up to organised criminals in order to benefit from their vote buying skills have done Mr Renzi no favours at all. In fact, he’s remained rather silent on the matter.

Mr Renzi has also remained rather quiet with regard to accusations from the president of Italy’s magistrates’ association that levels of corruption in Italian politics are higher than ever. Another dent to the ‘demolition man’ image Mr Renzi likes to project. Or rather, liked to. He’s just about stopped projecting it.

On top of the corruption and curious relationships Mr Renzi has entered into and the dubious characters that surround him, Italy’s prime minister has become ever so friendly with big business in Italy. Why?

What one suspects is that Mr Renzi is passing just enough reforms to keep enough of his party’s traditional vote pool happy while at the same time appealing to those who would in the past have voted for Italy’s right – big business. The combined left-right vote mass should be enough to ensure Mr Renzi wins general elections, whenever they may be. 2017, possibly. But that still leaves the question of Italy’s doddery economy, except Mr Renzi has been working to solve the problem.

Jetting Renzi

As many in Italy have noticed, Mr Renzi has been jetting off around the world to drum up foreign trade for Italy. It looks as if he has been successful and trade deals with the likes of Iran could give Italy’s sleepy economy a boost. If this actually happens, then Italians may well be happy to vote for Renzi thus installing him as Italy’s glorious leader for another term.

With the new streamlined system of government, Mr Renzi will be able to pass whatever laws he likes. He’ll be able reward dubious bedfellows like Mr Verdini for their support with new laws to keep them out of legal hot water and be able to clip the wings of Italy’s judiciary and prevent the pesky corruption uncovering magistrates from doing what they are paid to.

Can you see where this is going? Yes, right back to the good old days when Italy’s economy was humming along, the ethically challenged politicians got their cuts and everyone put up with the corruption. In other words, Italy’s not going to change at all. This may very well be what Mr Renzi’s endgame is.

The Endgame Revealed

Of course this all is pure speculation and one may be completely wrong but the signs are certainly there. Only time will tell. Mr Renzi’s endgame will only really become clear after he’s won future elections and has started work. If you happen to own a time machine, jump to 2019 or so.

In the meantime, watch out for Libya exploding, for the Brexit, the EU’s end and for Putin’s influence in Europe to grow. Interesting times.

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