Has there been an Italian Spring?

Has Beppe Grillo brought about an Italian Spring? No. Nearly, but not quite

Grillo rode the wave, but is it over?
Tim Hedges
On 2 May 2013 11:29

Luigi Preiti lost his job, lost his wife, and then lost his head. He got a gun and rushed towards Palazzo Chigi, the Prime Minister’s residence, firing. Two carabinieri were seriously injured. He has since apologised, saying he wanted to knock off a couple of politicians (unfortunately they were at the Presidential Palace being sworn in).

As a backdrop to the start of Enrico Letta’s administration this incident is significant; not because of the violence (these people usually kill themselves), but because everyone understands. On May Day, there were marches in support of Mr Preiti. Recession brings despair, and Italy has been in recession for nearly two years. It has been slipping quietly backwards. The recession will continue through this year and through 2014. More jobs lost, more despair.

Letta has seen the problem, which is more than might be said of his predecessor, Mario Monti, who is now regarded as a sort of post office for instructions received from Berlin containing a discredited philosophy. Letta has said that Europe should now support growth as assiduously as it supported austerity.

The new cabinet consists of 21 posts, an amalgam of centre-left and centre-right with four ‘technicals’ without a party affiliation. The average age is 53 (Letta is 46). There is a fairly vague fourteen point plan: Letta’s task is to present enough red meat to keep the animals in their cage, but without going into too much contentious detail.

Already there has been a problem: he announced that the government would cancel the June payment of Monti’s unpopular property tax. This would effectively halve it. But Berlusconi (who is not a cabinet minister) announced quickly that the tax would have to be completely abolished, or he would pull the plug on the government. On the other side of the political divide they are saying that all efforts should go towards cancelling Mr Monti’s VAT increase, scheduled for June, which of course affects everyone, not just those who own a house.

Letta’s other main commitment was to help the esodati. These are people who have lost their jobs but not yet reached pensionable age; there is no unemployment benefit in Italy and there are no new jobs. A guaranteed minimum income for these people seems a modest proposal, but things are tight. Together with the abolition of the IMU property tax, this would cost around €12 billion. And with a few other measures – such as extending the minimum income guarantee to those in extreme poverty and helping youth unemployment – and amid still declining productivity this could amount to as much as 1 percent on to the deficit, which would put Italy well outside the levels agreed with the European Union.

Letta has flown north to explain this to a supportive, but non-committal, Mrs Merkel. She is worried that any laxness now could spread like a contagion, particularly to France, which was the second stop on Letta’s tour.

Other promises in the Letta programme include institutional and electoral reform: ending ‘bicameralism’, whereby each house of parliament has equal power, reducing salaries for ministers, changing the electoral law, stopping state subsidy of parties and abolishing the ‘provinces’, leaving two levels of regional government, the Comune and the region.

Letta also promises to make it easier to employ people, although does not refer to the controversial Article XVIII, which makes it almost impossible to fire them or make them redundant.

Let us suppose for a minute, though, that Letta gets his way with the financial impasse: he produces an abolition or near abolition of IMU for Berlusconi and cancels the VAT increase for the left; he swings Merkel by persuading her to give him more time, as she has given other countries, saying that it won’t make her electorally unpopular because Italy has behaved well so far. Merkel comes up for re-election in September and is sensitive as to how bailouts, or virtual bailouts, are going to play in front of her electorate.

Then Letta embarks on the constitutional stuff. He should achieve something there; everyone knows the law needs changing. Could he then, with all that under his belt, survive into the medium term?

Berlusconi has already threatened to bring the government down, days into its tenure, and there will be a rehash of the leadership of the Democratic Party, to which Letta nominally belongs; to make his mark, a new Democratic Party leader would have to be seen to be imposing some policies on the government.

In the final analysis, the future of Letta’s government will depend on the opinion polls, and they depend on Beppe Grillo. As long as there is a near 30-30-30 division in the polls, the two traditional parties will support the government, out of fear that they come off worse in another election. Grillo is the exception, though: he is not in the government.

It is hard, looking back on it all, to guess what Grillo wanted, or expected. People assume he was surprised he did so well, but now, refusing to negotiate at all with the other parties suggests he thought he could do even better and destroy them (he nearly did). That upheaval, an Italian Spring, remains his goal but now it looks as if with the re-election of Napolitano and the imposition of Letta, the old guard have outflanked him (Letta is young but very much old guard).

Grillo expresses rage, at his popular rallies and on his blog, he says there has been a stitch-up – and he’s probably right – but he doesn’t say what he is going to do. Without a seat in government or without fresh elections he is nothing. The risk he runs is that his 160-odd parliamentarians feel that some government is better than no government and drift away. They came mainly from the centre left, which may be about to get a new, young leader.

So has Beppe Grillo brought about an Italian Spring? No. Nearly, but not quite. His chance will come if one of the old parties brings down Letta’s administration, and the comedian from Genova can say we are back to the old politics and rally his sans-culottes. Letta’s government is the old parties’ defence against Grillo, and they would be wise to keep him.

They may still pull the plug on Letta, though. Because this is Italy.

Tim Hedges is a weekly columnist for the Commentator. He previously worked in corporate finance before moving to Rome where he works as a freelance writer and novelist

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