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Where is Italy Going?

This Italy resident has a sneaking suspicion that Italy is entering a period of transition.  Mario Monti, who was brought in to take over from the disastrous Silvio Berlusconi, is determined to steer Italy in what he believes is the right direction.  Really, all Monti wants to do is to make Italy function properly.

Whether Monti intends modelling Italy after the United States, Germany, or the United Kingdom is not clear.  Denmark has been named in Italy’s newspapers a few times and appears to be seen as an exemplary nation.  Maybe Monti would like Italy to become the southern European equivalent of Denmark?

First though, there is rather a lot to sort out.

Beset with cronyism and corruption, Italy is not perceived as being an easy country to manage by Italians.  Mussolini once claimed Italy was ungovernable and, more recently, Massimo D’Alema, a former Prime Minister and centre-left politician stated that the current electoral system risks rendering the country impossible to govern.  D’Alema is not exactly right.  Italy’s odd electoral system almost guarantees Italy will never end up with competent politicians, not that the country is impossible to run.   The current system allows political parties to choose more or less who they want and not voters.   The very same system dumped Italy in the hands of Silvio Berlusconi and his team of ‘yes’ men and women.

Berlusconi’s management of Italy was so appalling and the members of his government were, by and large, so incapable, that both Berlusconi and his band of merry men and women were cast aside late last year amidst mounting fears that Italy could collapse in a spectacular fashion.  It was also feared that the reverberations from Italy’s collapse may have plunged a large section of the world into major recession.

Filling the hole came Mario Monti, an economist who is highly regarded both in Italy and at an international level.  Monti has done more in a few weeks in office than Berlusconi managed in nearly 10 years.  Unlike Berlusconi, who tended to employ people on the basis of their looks, Monti has surrounded himself with specialists who are also experts in their fields.

Monti So Far

Monti, after introducing a final round of austerity measures, believes Italy is on the way towards putting its national finances in order and said as much in an interview on television last night.  Putting Italy’s accounts in order was objective number one.

One of my followers on TwitterAndrea Andolfato, had this to say about Mario Monti:

@newsfromitaly by chance I was watching it [Mario Monti being interviewed on the Che Tempo Che Fa talk show] too, I still have to get used to this weird feeling: being proud of my Prime Minister….

It appears as though Monti inspires confidence.  My Italian other half is content that Monti is merely trying to sort out Italy.

We will have to wait for a year or so to see whether the first dose of Monti’s medicine has actually cured the national finance ailment.  Meanwhile, Italy’s financial markets are still oscillating as furiously now as they were on the run up to when Silvio Berlusconi was ordered to go.  Oh, I know you will say “but Berlusconi resigned”, however up to the very last minute he was refusing to go.  Somebody, just who is not clear, told Silvio Berlusconi to hand in his resignation.  Surprisingly Berlusconi did not make a huge fuss, which leaves one wondering whether Berlusconi was told to resign or else.  Exactly what the ‘or else’ consisted of, or even if it existed, is perhaps something we will never know.

Transforming Italy

What we do know, is that Mario Monti is determined to plough ahead with his attempt to transform Italy.  The right word in this instance is ‘transform’, not so much ‘reform’, even if the transformation will come about through the introduction of various reforms.

Competition-stifling Cartels

After having sorted out Italy’s finances, which includes a major clamp down on Italy’s old bugbear – tax evasion, Monti is now homing in on liberalisation.

What he wants to do is to break up as many of Italy’s competition-stifling little cartels as he can.

These cartels help protect Italy’s lawyers, notaries, journalists, pharmacists, taxi drivers and others.  Monti has set his sights on each of these groups and intends to reduce their control and make it easier for others to enter the marketplaces they currently dominate.  This, Monti seems to believe, will lead to the creation of jobs and may help drag Italy out of the stagnant economic pond in which it currently finds itself.

Once the cartels have been broken, and this will be a decidedly uphill struggle, Monti will begin to look at other aspects of Italy which require attention.

Monti is someone who believes in meritocracy, something which is an extremely alien concept to Italians; almost as much as is paying tax.  Monti knows that meritocracy, as opposed to cronysim, will lead to greater efficiency and that this will have a beneficial effect of Italy’s economic performance, as well as creating jobs in the process.

A meritocratic environment should also help keep the easy rewards of corruption at bay.  Cronyism and corruption are endemic in Italy.  The only way to eliminate these thorny, decades if not centuries-old, Italian problems, is to change the mentality of Italians.  As with trying to end the cartels and tax evasion, reducing the tendency which Italians have for friends helping friends and for requesting and offering ‘gifts’ is not going to be a walk in the park – but this is the direction Monti wants to take Italy in.

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In line with Monti’s belief in meritocracy, Italy’s education system may feel the effects of the Monti magic wand sooner or later.

Chances of Success

Outwardly Monti’s chances of success do not appear to be high.  But Monti is not to be underestimated and appears to be an adept player of the political game despite being something of a newcomer to mainstream politics in Italy.  One is certain Monti has a game plan.

The plan, for the moment, appears to be to keep as many of Italy’s traditional politicians on his side so Italy can be overhauled.  To keep the politicians content, Monti is probably not going to touch Italy’s politicians’ generous pay, at least not for the moment.  Perhaps Monti is using the threat of cuts in generous parliamentary pay and benefits to ensure everybody plays ball?  The same could be said of electoral reform.  Monti is being evasive on this subject as well.  Italians would like to see the electoral system revised, the politicians would not.

One can imagine Monti in a meeting with all the political party bigwigs and stating – “You let me do what I need to do and I will let you keep your pay and your little ‘job creation system'”.  Adding, perhaps, “Mess me around, and I’ll reform all of you too.”.

This ultimatum of sorts may help explain why virtually all of Italy’s main political parties seem to be towing the Monti line, with the exception of the separatist Northern League.

The Northern League has already tried the blacken Monti’s name by claiming he held a wild publicly-funded Berlusconi type party in official premises over the New Year.  In response to the accusations Monti basically told the Northern League, in so many words, to stop being so silly.

Not The Usual Technocratic Government

Italy has had brief spells of technocratic government before, but Monti’s technocratic rule appears to be different.  First of all, Monti has been ‘sponsored’ by Europe, if not elsewhere, and secondly, Italy really was in the doldrums, not only politically, but also financially, economically and socially.  Unrest was expected.

While Monti and his cabinet have not been elected into place, they will require the voting firepower of Italy’s elected representatives to transform Italy.  The numbers appear to suggest that Monti can call upon enough support to achieve this – unless a really unholy alliance is formed – which might be the case if disgruntled politicians decide Monti has outstayed his welcome.

Here are the numbers – there are 630 seats in Italy’s lower house and 315 in the upper house:

  • The PdL – Popo della Libertà – People of Freedom partly led by Silvio Berlusconi – centre right: 221 seats in Italy’s lower house and 130 in the upper house
  • The PD – Partito Democratico – Democratic Party led by Pier Luigi Bersani – centre left: 206 seats in Italy’s lower house and 106 in the upper house
  • The UDC – Unione dei Democratici Cristiani e di Centro- Union of Christian and Centre Democrats, effectively led by Pier Ferdinando Casini – the actual leader is one Lorenzo Cesa – centre-centre.  The UDC has 35 seats in Italy’s lower house and 5 in Italy’s upper house.  Note that the UDC has formed an alliance with the Third Pole.
  • The Third Pole – Terzo Polo – a kind of triumvirate which also includes a ‘fourth’ man – Pier Ferdinando Casini of the UDC (politics in Italy never has been straightforward): The Third Pole plus the UDC has 80 seats in Italy’s lower house and 24 in the upper house
  • The LN – Lega Nord – centre right, separatist and former coalition partners of the Pdl: LN has 59 seats in Italy’s lower house and 25 in the upper house
  • The IDV – Italia dei Valori – Italy of Values party led by Antonio Di Pietro – probably centre left with a dash, at times, of centre right with 22 seats in Italy’s lower house and 12 in the upper house

Which Way the Parties Will Swing

Of the Italian political parties named above, the two which carry the most weight are the PdL and the PD.  Of the other three parties, the Third Pole can muster enough votes to keep Berlusconi’s PdL and the LN at bay, if it sides with the PD – which is likely.

The IDV and a sprinkling of much smaller parties do not have the same voting power as their larger brothers.  Even so, to push legislation though Italy’s upper house – the senate – the extra voting weight the IDV could provide may prove decisive.

At the moment and despite a few noises to the contrary, the PdL is being cooperative – but will moan when voting time arrives, even if the numbers suggest there is not much it can do to block reforms.

The PD, on the other hand, seems to be broadly supportive of Monti and should lend a hand when proposals are put to the vote.

Right from the start, Casini’s UDC has said it will support Monti.  As for the Third Pole, they are something of an unknown quantity, but will probably let Monti do what he wants to do.

Now all Monti has to do is to placate Italy’s trades unions.

Interesting times for Italy.  At least the country appears to have some direction – for the first time in decades.

This article caught the eye of the brains on The WELL  – namely, Bruce Sterling, who had this to say:

inkwell.vue.430 : Bruce Sterling and Jon Lebkowsky: State of the World 2012

“Where Is Italy Going?” Here’s an English-language commentator, Alex Roe, who thinks that Italian politics have taken a major turn for the better.

Where is Italy Going?

Roe (@newsfromitaly) says: “Really, all Monti wants to do is to make Italy function properly. Whether Monti intends modelling Italy after the United States, Germany, or the United Kingdom is not clear.  Denmark has been named in Italy’s newspapers a few times and appears to be seen as an exemplary nation.  Perhaps Monti would like Italy to become southern Europe’s equivalent of Denmark?”

Well, that’s not going to happen, whether Monti wants that or not. It does amuse me, though, because in my new short story collection GOTHIC HIGH-TECH, there’s a story about a future Europe, “White Fungus,” in which this mordant line appears: ”

In stark reality, Europe was swiftly becoming a giant half-mafia flea-market where even Denmark behaved like Sicily.”

So if Denmark can be Sicily, then Sicily can be Denmark, right? You bet! If you can build a bakery in an abandoned Fiat plant, then an abandoned bakery oughta be able to build cars!

Roe: “Beset with cronyism and corruption, Italy is not perceived as being an easy country to manage by Italians.”

I think this has pretty well got it backward. Italy actually IS “cronyism and corruption,” in the sense that Italy’s got amazingly high “social capital” and terrific personal trust-networks.  Italy is a civilization that’s “beset” with a government and an economy.

Italians never had a national government until 1861, because Italians lived in a set of exquisitely civilized and extremely sinister towns. If other people hadn’t invented nation-states, Italians would never have adapted one. Monti is a technocrat who’d like to see that artificial thing function properly, but it’s worn out better guys than him.

So “where is Italy going?” Well, I’m inclined to agree with Roe that at least it’s more-or-less “going,” and that alone is a major difference from a year ago.

Maybe the speculators will somehow let them live — because otherwise the rich will have no place to go on holiday.

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