Lost in a Roman wilderness of pain

Source: Reuters

So sang Jim Morrison in “The End”, the Doors song that Italian radio host Oscar Giannino has aptly been playing every morning on Radio 24 as his soundtrack to Silvio Berlusconi’s unbecoming fall. Yet even the advent of Super Mario and his technocratic government has not dissuaded him from this morning ritual for, as he rightly points out, Berlusconi’s fall was simply the first step in a long road to economic and political recovery.

The conflagration that is the euro crisis has already toppled the governments of Spain and Greece, so it came as no surprise that where underage prostitutes, bribery and tax evasion allegations had failed, widening bond spreads  and mounting interest rates succeeded. It paints a wretched picture of Italian politics.  Had it not been for the fickle markets and the burgeoning pressure from Brussels, Berlusconi might never have stepped down. His loss of majority in the Chamber of Deputies was blatantly the final straw, but had it not been for the festering euro crisis threatening to engulf Italy he probably would have taken advantage of the window his noncommittal resignation promise gave him and canvassed enough support to keep trundling gaily along as he has for the past eight and a half years. Berlusconi’s shameful relinquishing of power is reminiscent of Bettino Craxi’s indecorous fall when Romans threw coins at him to express their disgust at his venality. As Berlusconi slipped out of a side door of the President’s palace to avoid the crowd that had gathered outside, angry Italians burst into a performance of the Hallelujah chorus from Handel’s “Messiah”.

However, as The Economist points out, Berlusconi’s exit was in no way cathartic, because although the markets rallied temporarily straight after the announcement, the full extent of the power vacuum he left in his place slowly became visible as the mist cleared. That vacuum has for now been filled by Mario Monti and his caretaker government, which this week won confidence votes in both chambers. The main political parties at both ends of the spectrum have been vilified to such an extent that no political figure features in Monti’s cabinet, probably in an attempt to avoid compromising its authority which rests solely on its expertise, rather than direct democratic legitimacy. Democracy has a lot to answer for now, as it fell upon Gianluigi Buffon, the captain of the national football team, to launch an appeal to the discredited political class to be “cohesive, cultured and responsible”, adjectives which scarcely come close to describing the mass of squabbling buffoons that are supposed to be running a country. In any case, it is endearing to see that Berlusconi seems to have finally grasped the full extent of the quagmire in which Italy finds itself by announcing that the reform of the judiciary is paramount and that he would be ready to “pull the plug” on Monti. Priorities, as you might say.

Source: Corriere della Sera

 The task facing Monti is huge, and success is in no way guaranteed. His team of experts have been brought in to tackle some of Italy’s most deep-seated structural problems which have hindered growth and killed off its competitiveness. Shaking up the professional services, which have contributed to the creation of a two-tier market and crystallised their privileges to the detriment of the young, is fundamentally necessary to achieve Monti’s stated task of integrating women and young people in Italy’s staid labour force. It is also key to his policy of distributing the necessary economic pain equally so as to maintain popular legitimacy.  Fostering growth will also be paramount to bringing Italy on a stable path of debt reduction, and Monti has already indicated that he will probably not be introducing a “super-tax” targeting the rich as that would demonise wealth and deter entrepreneurs, badly needed in Italy. Crucially, it was also a measure which was anathema to Berlusconi’s People of Freedom (PdL) party. One of his most contentious tasks will be cut the infamous "costs of politics", as they are known in the Italian media. This ranges from a reduction in politicians' salaries, notoriously generous in Italy, to scrapping a whole bureaucratic layer, namely the provinces, which are sandwiched between the regions and municipalities and are widely seen as superfluous. Whilst most politicians pay lip service to the principle of cutting their benefits, when it comes to the substance their discourse suddenly becomes imbued with a hefty dose of victimisation. After all, many of them are leaving lucrative careers in law and business to enter the political arena, and it would simply be unacceptable for them to suffer a sharp decrease in salary because of this lofty decision. So much for being a politician to serve the country then.

The fact that the PdL still commands a majority in the Senate means Monti will have to prove adept at working his way through the convoluted party politics of Italy. The Northern League is adamantly against his technocratic government and is unlikely to set aside its populist tendencies for the country’s good; similarly Berlusconi has made clear that he will not retire to some quiet corner and write his memoirs. Reassuringly, the former prime minister has given Monti’s government the green light to proceed with structural reforms until 2013, when elections are due to be held, however the vicissitudes of Italian politics and the mercurial qualities of Berlusconi mean the future is murky at best. Oscar Giannino will probably be in no hurry to change his song given the uncertainty ahead.