Rome view: Fate presto Italia!

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"FATE PRESTO" (“Act fast" or "Act now”) was the headline in Il Sole 24 Ore back in November 2011, when Silvio Berlusconi had to step down due to the increasingly desperate economic situation of Italy. Such a headline had also been used  in 1980, after a terrible earthquake struck the country. But now in 2013, nearly a year and a half after a technical government was appointed to rescue Italy from a possible “Greek scenario”, the SOS appeal has never been as urgent.

Italy today is paralysed. 45 days after the elections it still does not have a government. The de facto agreement is to first vote for a new head of state, then the government (or the new president could call for new elections). In the meantime there is a prorogatio of Monti, a scenario that none of the three main blocs (Democratic Party, People of Freedom and Five Stars Movement) wanted, with 10 "sages" trying to find agreement on economic and institutional reforms. A stalemate, a total paralysis.

The vice-president of the European Commission, Olli Rehn, who recently met Monti to discuss late payments, reminded us that “The accelerated repayment of commercial debt to Italian enterprises it as a matter of utmost urgency.” This is especially pertinent considering that Italy's economic problems are related to a long-term loss of competitiveness and excessively tight financing conditions for households and enterprises. In order to overcome both its political and economical gridlock, the country needs to submit a stability programme this month. Monti's government has already unlocked €40 billion of commercial debt for Italian enterprises (I wonder why this was not done sooner - of course we had to convince our European partners that we are credible in order to be given some flexibility over the stability pact, but this has become a crucial issue only in the last weeks. Why?). It is also not clear precisely how much money the state owes to enterprises. Official figures say €70 billion, but everyday we have a lottery of numbers: 90, 100, 120 billion. This is not acceptable. At such a crucial time there is no sense of urgency. 

What worries is that the foreseeable scenario is that the country’s political crisis could drag on for at least several more weeks, being inextricably tied up with the vote for a successor to President Napolitano. Instead of overcoming divisions, political forces continue to disagree about everything, ranging from the next possible candidate for the presidency, to reforms, to the cost of coffee for parliamentarians at the Chambers cafes.

The head of state's decision to delegate an agreement on economic and institutional reforms to ten (all male) sages, perhaps in a desperate attempt to find a solution to disagreements between all the parties, turned out to be a way to postpone the creation of a government, concrete reforms, and urgent measures. Italian history shows us that these kind of commissions do not work. They also do not represent current Italian society (most of the members of the last two commissions of these sages have been male, and with few exceptions have been involved in traditional politics for the past 20 years). 

The other option President Napolitano had considered was to end his mandate one month earlier in order to allow a new elected head of state to call for new elections. (According to the Italian constitution the president may not dissolve one or both houses of parliament during the final six months of the presidential term.) He decided not to resign thanks to pressure both from Europe, especially from ECB’s president Mario Draghi, and from the US. Everyone is terrified of the economic consequences such a resignation could provoke. Napolitano, once again, carried the unbearable gridlock on his shoulders for the sake of the country. The same cannot be said of the political parties.

Clearly the personal interests of the parties are being given precedence over the common good of Italy. The election resulted in three main blocs, none of which had enough support in parliament to govern alone. While the country is sinking, the Five Star Movement has decided that their tsunami has to dismantle the entire system (their target is currently politics, but I am willing to bet that soon the business community will be affected, followed perhaps by the media). Grillo said clearly that he is aiming at 100 percent of the electorate, but if new elections come into play Berlusconi could make it through for the fifth time.

The centre-left Democratic Party, which internally is going through particularly difficult times, will change leadership. The "natural" candidate would be Matteo Renzi, who has already started his campaign. Renzi, 38, lost to Bersani in the Democratic Party primary elections last December. The mayor of Florence is young and ambitious, but has political experience and strong communication skills (for twenty years such skills have been monopolised by Berlusconi). He is perceived as a potential game-changer who could win back votes from the Five Star Movement , as well as the centre right. It remains to be seen whether Renzi would indeed be a real innovator - after all Berlusconi arrived in 1994 after another tsunami (Mani Pulite), so I would be very careful in giving anyone a Messianic role. But certainly I agree with him that Italy is wasting precious time. Enterprises are shutting down, financial troubles are driving people to suicide, and in response the politicians are postponing the difficult decisions.

The boat is sinking. We don't need commissions of sages; we just need wise, concrete decisions now. Time has run out.

 

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