italy: a very political crisis

David Broder looks at the crisis in Italy and its meaning for Europe

“I couldn’t give a fuck. In a few months I’m going to go away and mind my own fucking business. I’m leaving this shitty country, it makes me feel sick”
– Silvio Berlusconi, 1st September

On 29th September Italy’s Corriere della Sera published a letter previously sent to Silvio Berlusconi, demanding that he make sweeping cuts in government spending and ‘reforms’ in labour laws to push down employers’ costs.

A changing of the guard? Berlusconi is mired in economic malaise and personal scandal

The letter, originally sent to the Italian PM on 5th August by the heads of the European Central Bank (ECB) and Bank of Italy, reflected the ruling class pressure to slash workers’ rights and public service provision in Italy, in the name of ‘reducing the deficit’. ECB power over Italy is very real, as it buys vast quantities of Italian bonds just to keep it afloat.

Italy, like Spain, may well even more of a headache for Europe than Greece. Italy has already seen its bonds in freefall and the 20th September Standard & Poor’s cut in its credit rating. The greater threat is that whereas the Eurozone may well be able to bail out Greece, Italy is simply too big to stage a repeat performance.

The ECB dogma is that the best way to keep Italy afloat is to lessen the ‘burden’ of working-class living standards (funny, that!), and it exerted pressure for harsh cuts. Indeed, on 14th September the Italian parliament voted through ‘la manovra’, the repeatedly-altered austerity programme authored by Berlusconi’s Finance Minister Giulio Tremonti. The bill plans some €60 billion (£52 billion) of cuts over two years, including massive reductions in pensions, an end to millions of workers’ tax rebates, and moves to make it easier for employers to sack workers.

Tremonti has styled himself as a neo-liberal hawk and battler for the ruling class, justifying the budget on the basis that “We can’t be like the Titanic, where they didn’t even manage to save the first class passengers”. This is somewhat in contrast to Berlusconi, apparently far too embroiled in personal scandal and his own business interests to pay attention to the economic crisis. He even failed to show up for parliament during the early readings of the budget, doubtless also keen to allow his factional rival Tremonti to take all the responsibility for cuts.

Editorials in the centre-left paper La Repubblica complain that the crisis is ’political’: Berlusconi cannot lead as he is too beset by scandal and has no credibility abroad. Indeed, it is remarkable that a Prime Minister would be able to remain in power even while on trial on charges including paying for sex with a 17-year-old prostitute, corruption and abuse of power. Berlusconi’s behaviour is of course an appalling example of arrogant ruling-class power and the sexism which goes with it. He has no obvious concern in supporting employment or reviving the economy. With rumblings from his coalition partners, his days are clearly numbered.

However, another aspect of this opposition narrative is rather less palatable. Essentially it argues that capitalism is in a bad way and this demands radical ’reforms’ by a focused albeit politically broad government, unlike the narrow-minded Berlusconi with his outrageous antics. This is called a ‘technical’ administration, a cross-party national unity government, the idea being that the ruling class as a whole can see further and plan ahead better than an individual capitalist like Berlusconi.

Technical government

In 1991 the Italian Communist Party (PCI) fell together with the USSR. This also brought to an end a political era in which the establishment’s main concern had been to keep the Communists out of government. It was no coincidence that in the following two years all the major Italian parties broke apart: the trigger was a long-brimming corruption scandal, exploded by the removal of their common enemy, the PCI. In 1993, to quell the political storm the Bank of Italy  governor Carlo Ciampi headed a ’technical government’. It pushed through a wave of privatisations in just months. The ruling class could get back on its feet without democratic scrutiny and then, later, go to the polls. In 2011, business leaders like FIAT’s Luca di Montezemolo have been fishing for a role in a similar kind of administration.

Berlusconi’s Forza Italia (now PDL) party arose from the fallout of 1993, filling the gap on the right. But today his value to the ruling class is ever-decreasing. This is much in contrast to the opposition Partito Democratico, the ultimate descendent of the pre-1991 Communist and Socialist parties. Today it models itself on Obama’s Democrats, and its leader Pierluigi Bersani leads calls for a ‘technical government’ to re-stablise Italian capitalism.

The underlying idea of national cross-class consensus also has a certain echo in the trade unions, with general secretaries and the Italian business federation making repeated joint appeals for measures to encourage growth. And despite a one-day strike by the CGIL union federation on 6th September, politicians’ battle to unseat Berlusconi seems a far more powerful factor in the situation than the anti-cuts movement in the unions. The radical left is weak too: the post-Communists lost all their seats after propping up a series of neo-liberal social-democratic rulers. With no left alternative to Berlusconi, his only likely replacement is the more far-sighted wing of the capitalist class, as represented by the Partito Democratico.

In Greece we have already seen ‘Socialists’ take power from the right, all the better to impose ECB cuts without serious opposition. The old Italian conservative establishment fell in 1993 with similar results. Sadly it seems the coming end of the Berlusconi era will be little different.