Italy isn't working

Italy is a wonderful country, but right now, when you look at the dam outside Venice which has never functioned, the rubbish on the streets of Rome and the ailing, deformed babies of Taranto, you get the feeling it just doesn’t work

Ilva
ILVA
Timwork
Tim Hedges
On 21 November 2019 15:18

I expect most visitors to Taranto, unless they are politicians, will do as I did: look around and keep on going. The idea of a visit is attractive if you are in the south: a port on the Ionian Sea; an ancient Spartan settlement with a history as old as Rome, what’s not to like?

Well, there’s this: the largest steelworks in Europe and almost certainly the dirtiest, producing on its own one twelfth of the dioxins in the entire continent. An ugly Italian secret which now is headline news.

The pollution has reached peaks scarcely credible in the modern western world.Taranto’s dioxin levels are double the EU permitted maximum. At least eighty people a year die from the red-brown dust which covers everything. Infant mortality is 21% higher than the regional average. Bone tumours, lymphoma, leukemia, asthma are all common in children born in Taranto.

This year the European Court of Human Rights convicted the Italian State of failing to protect its citizens in Taranto. Something had to be done.

The steelworks, which began before the First World War, has alternated between public and private hands but in 2017 the Arcelor Mittal group bought the company, pledging €2.4 billion to clean it up within five years. Sensing the itchy palms of the ambulance chasing lawyers they insisted on, and received, immunity from environmental prosecution from the then administration of Matteo Renzi.

There follows a prime example of Italy’s ability to shoot itself in the foot, even when there was no need to draw the gun. Luigi Di Maio, Deputy Prime Minister and head of the environmentally aware 5-Star Group, declared that the immunity, known as Lo Scudo, the Shield, should be withdrawn. He muscled a law through parliament. Ha! That was a poke in the eye for big business!

Of course, as anyone with half a brain might have foretold, Arcelor immediately withdrew from the deal. In January the site will revert to the State.The people of Taranto will be left to the mercy of the Italian government, which has already been convicted of letting them down. The ILVA works employs some 8,000 people directly but at least 50,000 depend on it. ILVA is pretty well all there is in the area apart from farming.

The irony of it all is that there are rumours that Arcelor Mittal was looking for an excuse to pull out, because the steel market was suffering from international (Chinese) dumping and this wasn’t the time to be investing, much less cleaning up an overly large plant with a dodgy industrial relations history. Di Maio simply helped them out.

There has been a flurry of governmental activity trying to patch up this mess. Prime Minister Conte has been down there, and the Financial Police have been all over Arcelor’s offices, trying to prove they have welshed on the deal. Already there is a story of transfer pricing, supplying other members of the Arcelor Mittal group with cheap steel, concentrating the losses in Taranto. But it won’t work. The steel market has changed, the Mittal family wanted out and Di Maio has stamped their ticket.

The Government cannot afford the cost of cleaning up ILVA, nor can it afford to run it, particularly if, as they claim, the output has been going to other members of Arcelor Mittal at a loss. Equally they cannot afford the political and economic cost of an entire large city being impoverished.

These are difficult times in Italian politics, the alliance between the Democrats and the 5-Star being fragile and tetchy, the popular Matteo Salvini waiting in the wings. The last thing this coalition needs, just as they have established a minimum income system, is for another 50,000 people to be claiming it.

Italy is a wonderful country, but right now, when you look at the dam outside Venice which has never functioned, the rubbish on the streets of Rome and the ailing, deformed babies of Taranto, you get the feeling it just doesn’t work.

Tim Hedges, The Commentator's Italy Correspondent, had a career in corporate finance before moving to Rome where he works as a freelancewriter, novelist, and farmer. You can read more of his articles about Italy here

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