Although positive moves have been made to reinvigorate Italian politics, look a little closer and remnants of old still remain. At the centre of this is Silvio Berlusconi, Prime Minister of Italy intermittently between 1994 and 2011.
Following two months of political deadlock, Italy’s new government has finally formed. The first ‘Grand Coalition’ in Italian politics since 1946 merges the centre-left and centre-right parties, the Democratic Party (DP) and People of Freedom Party (PDL) respectively, in a physical convergence of the political spectrum. The coalition has a number of fresh faces, introducing a new generation of politicians mixed with some of the more well-known characters on the Italian political scene. Led by the DP’s Enrico Letta, this coalition has the greatest number of female Ministers in Italian history, as well as the country’s first black Minister, Cecile Kyenge, Minister of Integration. Several economists have also been elected, undoubtedly to tackle Italy’s gargantuan public debt and record unemployment level, which currently stands at 11.6%.
So does this mixture of new and old, experienced and educated, signify a new political landscape in Italy? A government focused on economic and political stability as well as equality and meritocracy? If so, it would be a far cry from the corruption and populism which have characterized the country’s politics since the days of Mussolini.
With so many segments of society affected by different issues and subscribing to different politics and parties, how do you please them all? In the past, the showmanship of the media tycoon somewhat appealed to these different groups. However, economic decline has further cemented social cleavages within Italy, making a ‘one size fits all’ party impossible (as evidenced in February’s election). Despite facing charges of tax fraud, solicitation and abuse of power, Berlusconi, whose fortunes Forbes estimates at $6.2 billion, maintains his popularity among the Italian people. This highlights that Italy still lacks credible, strong political leadership and has not yet moved on from its days of showman politics.
Particularly in the final years of his leadership, Berlusconi refused to acknowledge Italy’s deteriorating economic situation. According to a Special Report by the Economist in 2010, GDP growth in Italy was the third worst in the world, following Zimbabwe and Haiti. Despite serving the longest term of any Italian premier and having sufficient time to make real changes there was a complete disregard for tackling public debt and encouraging GDP growth. Instead, both Berlusconi and the Italian people continued to be distracted by his multitude of scandals and legal battles. As has become the norm with Italian politics, the pressing issues facing the country were covered with a smoke screen. The lack of transparency so ingrained into Italy’s political system enabled Berlusconi to continue neglecting the economy whilst maintaining his reputation as a ‘cheeky scoundrel’ to the Italian populous.
As PDL’s whip hand, Berlusconi continues to wield a great deal of power within the Italian government and considerable control over the newly elected Prime Minister. Illustrating the latter is Berlusconi’s expectation for Letta to fulfil his promised abolishment of the unpopular property tax for first time buyers. Letta talks of enhancing the economy and austerity measures, whilst at the same time projecting the populist rants of his whip. For example, Letta has already announced that the tax increase planned for next month will not go ahead, reflecting a popular rather than pragmatic style of governing. Diverging from the austerity measures successfully introduced under Mario Monti’s interim government is extremely risky for Italy’s fragile economy. Even a small deviation from fiscal austerity will panic Italian markets, as was the case in 2011.
In addition, it is crucial that Letta revitalises Italy’s struggling employment market, with a particular focus on youth unemployment which has reached record highs of 40%. During the years of Berlusconi’s leadership, masses of young, talented people emigrated in search of better opportunities. Those who were left behind have since struggled to find employment, particularly in the South. There was a dire need for Berlusconi to open up the employment market and boost economic growth by enhancing market competition and productivity. Seeking new technological and business innovations and improving Italy’s sub-par universities was also key. Ignoring these vital sectors has resulted in the mass unemployment and stunted GDP growth that Letta’s government faces today.
Despite being handed this monumental task, the plagued employment sector has been given inadequate attention in the Prime Minister’s rhetoric since the new government was sworn in on 28 April 2013. Rather than lowering unemployment, Letta speaks more of tax breaks and enhancing welfare benefits; the cost of such schemes is estimated between €10 and €20 billion. With the public debt at an incredible 135%, not only are these proposed governmental policies unaffordable, they are downright dangerous for the stability of the Italian state.
Adding to the vulnerability of a corrupt state with idealist policies in an uncertain economic period, divisions within Letta’s party are no secret. Rifts in the LDP could easily weaken the newly established government and once again lead to political stalemate or even chaos. In this eventuality, who will fill this political vacuum? The person whose eye on the prize has never waned – Berlusconi, for his intention of once again running for public office is well known. Perhaps this fragile coalition signifies nothing more but a waiting game for the unrelenting politician.
Despite optimistic changes, a familiar shadow has already crept into Italy’s new, hopeful government, thus demonstrating Berlusconi’s continued influence at the hub of Italian politics. Unless Letta reverses this familiar pattern of unaccountable, shallow policies and follows in the footsteps of his temporary predecessor, Mario Monti, whose technocratic government and austerity compliance successfully stabilized the state, the economic reality facing Italy cannot be ignored for long. Idealistic policies may be popular in the short term, but the consequences they bring for Italy certainly will not be; a tough lesson yet to be learned by this ‘Grand Coalition’.
