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Will Renzi Rock Italy in the Right Direction in 2014?

Heading in a better direction?

In the turbulent, confusing, slow as molasses world of Italian politics, something seems to be stirring. Actually, stirring things up is the new, young, leader of Italy’s generally uninspiring, if well meaning, centre-left PD party. The new broom in Rome is called Matteo Renzi. He also doubles as the Mayor of fascinating Florence. But will Renzi be able to make a real difference?

Italy’s young Turk, or perhaps that should be young Tuscan, does appear to be grabbing bulls by their horns, and, with apologies for yet another cliché, he’s already grabbed an exceedingly hot potato. Renzi is pushing very hard for electoral reform, something which Italy has needed for quite a while.

The need for such reform has become even more urgent seeing as Italy’s highest court ruled that the current law is, in part, illegal. Renzi has promised to sort out a new electoral law in double quick time. However, the form the new law will take is still unclear. Despite Renzi’s aggressive approach to what is a very sticky issue for Italy’s politicians – electoral law reform could cause a good few of them to have to give up they cushy jobs – it is not at all clear how far he’ll actually get. At least he is trying.

If all goes to plan – and that is a huge “if” – Italy’s parliament will have electoral law reform to debate from February onwards.

Electoral Law Alternatives

Renzi has prepared three electoral law reform alternatives, one of which resembles the system used in Spain. Another is a rehash of a former electoral law, and the final suggestion is something similar to the double ballot system which is already used to elect mayors in Italy.

Which system will prevail is an unknown, though the Spanish model is regarded by some as being too complex and time consuming to implement. Renzi does deserve credit for actually presenting proposals. Up to this point, nobody else had.

Employment Law Changes

At the same time as he is attempting to point Italy in the direction of concrete electoral reform, Renzi is also pushing for reforms to Italy’s overly worker friendly employment laws which revolve around Article 18 of Italy’s constitution. In Italy where employees tend to regard employers as unscrupulous slave-drivers, reducing Article 18 protection for workers is as hot a potato as electoral reform. Italy’s unions are already rather worried by Renzi’s noises. What exactly the Job Act – yes, that is the “Italian” name – will turn out to be, is unclear. One idea that Renzi has mooted is to delay the effect of Article 18 employment protection for a few years. This, he hopes, should encourage employers to take workers on and give them longer term contracts of employment.

At present in Italy, the young especially are offered short term contracts which may or may not be renewed. These short term contracts can only be renewed a couple of times, after which time the employees concerned have to be taken on permanently. This, though, does not happen. Instead, after a couple of renewals, employees tend to find themselves without work. Replacements are taken on using the same temporary contract formula and the process repeats itself. As a consequence, many of Italy’s young have zero job stability and cannot plan for the future.

Starting a family or obtaining finance for a house purchase is nigh on impossible for those who have fallen into the short term contract nightmare. Derisory pay levels make matters even worse. Italy’s employers, not all, but many, refuse to take on staff permanently because they claim the cost of employment is too high and, they argue, removing under-performing employees is nigh on impossible.

Renzi’s Job Act may change this, though just how remains to be seen.

Cutting the Cost of Politics

Next up on the Renzi agenda is cutting the cost of politics – which is something Italy really does need to do. The cost of Italy’s political system far outweighs its benefits.

The idea is to create a non-elected senate of regional governors – presumably the, elected, regional governors which already exist in Italy, so while the senate will not be elected, its occupants will, even if there would only be 20 members – the one for  each of Italy’s regions.

Once again though, as with electoral law reform and the Jobs Act, the reform proposals are merely that: proposals. In actual fact, for now, they are little more than ideas.

Other Reforms

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Other issues Renzi wants to tackle include Italy’s stodgy justice system, and the matter of civil unions for one and all – women and men, women and women, and, of course, men and men. Italy’s Catholics are not happy with this idea one bit, even if the Vatican has not yet taken a stance. Sooner or later, it will, and the Vatican’s position may well determine whether or not Italy gets civil unions.

Opposition Reactions

Berlusconi’s people are keeping relatively quiet, but don’t sound as if they will be too cooperative.

Now Berlusconi is playing the political game from the sidelines after being ousted from Italy’s parliament, his people are drifting rather aimlessly. Italy’s wealthy elite, cliques and the corrupt would still like to see Berlusconi or a suitable replacement at the helm, though. Whether Renzi will win over at least some of these relatively small but exceedingly powerful groups is an unknown. The corrupt certainly won’t be too happy about justice system reforms.

Italy’s employers, some of whom are staunch Berlusconi fans, do seem to want someone who can heal Italy’s ills and place the nation on the road to growth. If Renzi comes up with concrete sounding proposals, he may well end up marginalising at least some of the hardcore Berlusconi supporters. Clearly, Renzi still regards Berlusconi as being a major political force and has encouraged the perpetually legally entangled billionaire to take an active part in the electoral reform process.

The remnants of Berlusconi’s PdL party who split off into the Angelino Alfano led New Center Right – NCD – are flapping around trying to find their feet. Whatever the NCD finally decides to do, it will most probably fall back into the Berlusconi reborn Forza Italia camp in the event of elections.

Some suspect the Berlusconi-Alfano split was little more than a politically expedient sham designed to present those voters who are tired of Berlusconi with an alternative with the same policies but without Bunga Bunga man as leader. At election time though, Alfano’s new little party will end up becoming coalition partners with Berlusconi’s people. I’d bet money on that. But electoral law reforms may reduce the value of any future Berlusconi-Alfano alliance.

Grumbling Grillo

Then there’s the anti-establishment Beppe Grillo and his Five Star Movement. Grillo, and certain members of his movement stroke party, think Renzi is unconvincing and that he’s being steered by Italy’s old political guard – on both sides of the political spectrum. Grillo does not want to cooperate, even if Renzi is trying to encourage him to do so.

While Renzi may not win over Grillo and his hardcore supporters, other members of the Five Star Movement may look more favourably on Renzi should his words be transformed into actions.

Who is the Prime Minister of Italy?

On paper, Italy’s Premier is Enrico Letta, though in practice, Matteo Renzi is dictating the direction of Italy’s government. It is looking likely that a reshuffle may take place very soon and Renzi will place his people in key positions. When this happens, Italy’s current Prime Minister risks becoming little more than a figurehead.

How Letta will react to Renzi’s moves is, yet another, unknown, although Letta seems to want to stay where he is and tow the Renzi line at the same time. Letta’s Economy Minister promised that taxes would fall in 2014 in Italy. The statement appeared to be a thinly veiled attempt by Letta to curry favour with Italians and keep himself in the top spot. The fly in the ointment for Letta is that promises of tax cuts in Italy are so commonplace that Italians no longer believe them. Indeed, promises of tax cuts more often then not end up transforming into tax rises!

What may happen, after Renzi has won a couple of victories, is that elections will be called and Renzi could then end up as Italy’s actual Prime Minister. When will elections happen? That depends on how fast Renzi can move and what he can achieve, but elections could be called at some time in late 2014, or that’s what I predict.

Now Italy is waiting for Renzi to transform all his fine words into actions. Will this happen? It’s wait and see time, folks!

2014 is going to be a very interesting year for Italy. Either the nation will pick itself up or it will continue to slide downhill.

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