31 October 2013

Italian politics - "Bickering and back-stabbing"

Dismal economic figures make reform urgent, but political leaders are mired in strife. PM Letta says constitutional reform in Italy is essential to change an electoral system that will only serve to increase populism if it continues.

On October 29th Antonio Golini, the acting head of the national statistics office, said the economy had continued to shrink in the third quarter. That contradicted the government’s view that the country’s longest recession since the second world war had already bottomed out. On the same day the finance minister, Fabrizio Saccomanni, revised downward, from -1.7 per cent to -1.8 per cent, his prediction for the economy’s performance in 2013. Even if growth returns in the fourth quarter, all sides agree that it will be anaemic. The lack of economic growth will make it more difficult for the government to hold its deficit-to-GDP ratio below the eurozone-mandated 3 per cent ceiling and prevent its whopping debts of €2 trillion ($2.8 trillion) from rising above today’s level of 130 per cent of GDP.

Italy’s bleak fundamentals have so far done little to bring about the political stability needed for structural economic reform. Mr Letta’s left-right coalition was a child of necessity - the outcome of the refusal of Beppe Grillo’s Five Star Movement (M5S) to join either side in government after taking 25 per cent of the vote in February’s general election. But there was at least the hope that the centre-left Democratic Party (PD), to which Mr Letta belongs, and the People of Freedom (PdL), founded by Silvio Berlusconi, would be inspired by the country’s economic outlook to work in relative harmony.

Instead, the government has had to operate under mounting fire from the section of the PdL closest to Mr Berlusconi. The media proprietor and former prime minister has bullied the government into fulfilling his campaign promise to kill off a property levy. And, partly because of that, Mr Saccomanni’s budget for 2014 will do little to stimulate growth.

Full article © The Economist

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Meanwhile, in an interview with the Guardian, Italian PM Letta hit out at Grillo, the former comedian and figurehead of M5S whose anti-establishment politics lean to the right on some immigration issues. Letta said: "It is not by chance that, in Italy, Grillo, who on many issues does not take rightwing positions, has completely sent his compass spinning on this issue … dividing his own MPs and a good part of his electorate because he knows that Italy is a sympathetic and generous country with a very humanitarian spirit, but in which the fear of difference is still a very big problem in opinion polls."

The M5S has never taken part in the European elections before, but in February's Italian election it made a spectacular breakthrough, winning 25 per cent of the vote for the lower house of parliament. Grillo has repeatedly called for a referendum on Italy's membership of the single European currency, though it is unclear to what extent that sentiment is shared by his MPs and voters.

Letta, whose Democratic party (PD) was dealt a rude awakening by Grillo at the polls in February, admitted that mainstream parties could not absolve themselves of blame when confronted with the rising tide of populism. "I know that among the eight million people who voted for the M5S there are many voters who used to vote PD and the moderate centre-right groupings", he said.

"If many voters who used to vote for our parties made populist choices, I think we should be the first to question ourselves. In my opinion, 90 per cent of the success of populist parties in Italy is not down to European issues or economic policies, but to a politics that took too much time renewing itself and cutting costs."

To bring back voters from the M5S, he said, the Italian mainstream needed to show it was "capable of reforming itself, and that [a storming of] the Bastille is not necessary".

Letta – the head of a shaky grand coalition with Silvio Berlusconi's centre-right grouping whose very creation was a cause of revulsion among many former PD voters – said constitutional reform was essential in Italy to change an electoral system he said would only serve to increase populism if it continued.

Full article © The Guardian