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Italy is not answering the telephone La Stampa - January 30th 2011

A few days ago, a TV interviewer asked me what I thought an alien from another planet, an extra-terrestrial, might think about Italian politics if they were suddenly to find themselves in Rome. It was a nice question, even if it made me wonder whether she saw me, too, as that sort of alien. Perhaps as a foreign commentator I am indeed a kind of extra-terrestrial, but I would add a further twist: faced with Italian politics today, we are all aliens now, we are all from a different planet to the politicians, whether Italian or foreigner, young or old, right or left.

            For my answer is that our extra-terrestrial would ask why in Italy there is so much politics and so little government. If fact, if Italy was the only country on Earth that the alien saw, the creature would have to conclude that in this game called democracy, politics and government must be completely different, unconnected activities, and would assume that in Italy the true government must be somewhere else, probably somewhere secret, for none of the politics seemed to have anything to do with it.

            What the international media reflects today, indeed, is the related but more limited notion that Silvio Berlusconi’s great achievement, at present the true legacy from his years in Palazzo Chigi, is that he has at last replaced “la dolce vita” as the favourite foreign cliché for Italy with the phrase “bunga bunga”. However the damage, as our alien realises, is much more than simply replacing a nice cinematic image with a sleazier exoticism.

            The damage can be summed up by altering the famous remark made by Henry Kissinger, when the then US Secretary of State asked who he should telephone if he wanted to speak to Europe. If he were talking about today’s Italy, the remark would now be that he knows the number, but no one is answering the phone. There is no point, foreign governments or companies believe, in calling Italy, for government, and perhaps all action, there has ceased to exist.

            Politicians, at least all national politicians, have left the real world behind. “Poor Italy”, as my former employer, The Economist, put it recently. That magazine was also correct in 2001 when we described Silvio Berlusconi as “unfit to lead Italy”, but we did not realise that the crucial word was not just “unfit” but “lead”. Neither he nor anyone else in Italian politics shows any interest in leading Italy at all.

            Of course, Italians have sensed this for some time. Millions of you made Gian Antonio Stella’s and Sergio Rizzo’s “La Casta” a huge bestseller in 2007, a phenomenon that in any other country would have implied that there was an irresistible force for change. Yet politics carried on exactly as before. Only worse.

            How about economics? Outsiders have spent a lot of time in the past year wondering how different Italy is from Greece, Ireland and Portugal, given that its public debt is one of Europe’s biggest in proportion to its GDP. The popular conclusion, popular especially with Giulio Tremonti, is that Italy is different because it faces no financial-sector crisis, has a relatively modest budget deficit and can still service its debt despite a slow growth rate. So this is good news.

            It is time to think the opposite. For although the analysis is correct, the conclusion is wrong: actually, this is bad news. For at least the governments of Greece, Ireland and Portugal are doing something under the pressure of their crises: reforms are being attempted. At least in Ireland there is an opposition which knows who its leader is, and knows that it wants to take over the government when early elections occur next month.

            Like other commentators, I am often asked how the President of the Council can survive scandals that would have forced the resignation of any other European leader within days. The reason doesn’t really have anything to do with the sex or machismo that is often mentioned, still less public opinion.

            The ultimate difference between Italy and what would happen in France, Spain or Britain is that Berlusconi’s allies, inside his party and his coalition, have not yet asked him to resign, which their equivalents would have long ago done elsewhere. They see no urgency in doing so, and still presumably believe they can benefit from their association with him. Nor does the opposition appear serious about trying to force him to go, or trying to persuade his allies, whether in the PdL or the Lega, that their interests could be better served without him.

            The rather strange spectacle of the fiscal federalism law and debates puts this lack of urgency and decisiveness in the spotlight. After so many years of arguing about this issue, with the main bill having been passed nearly two years ago and with deadlines for implementation laws supposedly imminent, how is it possible that there is so little clarity about what fiscal federalism will really mean? It is not just aliens who will be unable to detect the true meaning of this supposedly important change.

            The question I have to keep asking myself, in the light of this dismal, paralysed, wholly self-referential political scene, is whether I might have been wrong last October to express hope and optimism in my book “Forza, Italia: Come ripartire dopo Berlusconi”. Admittedly we have not yet reached the “dopo”, but still the lack of leadership—or even the desire to lead—all round is dispiriting.

            So let us turn again to our alien, and assume that as well as extra-terrestrial he is also a trained economist. If the alien were to look at Italy’s economic data, he would see a familiar list of weaknesses: economic growth slower than other big eurozone countries; falling household incomes; slow productivity growth; an ageing and stagnant population; high youth unemployment; and deficits on trade and the current-account of the balance of payments, despite all the bragging about Italy’s exports (which, contrary to popular belief, are only the fifth largest in the European Union adding together goods and services, or fourth on just goods).

            Yet he would also meet entrepreneurs, working day and night to make and invent high-quality products to be sold all over the world; he would see, from the FIAT referendums, an emerging willingness among moderate trade unions and workers to modernise working practices; he would see the energy, ideas and creativity of young people; and he might well be impressed by the strength of co-operatives and networks in working together for common goals. Most of all, he would note, from his conversations with human Italian economists, an unusual (for economics) consensus about what needs to be done.

            The alien’s manifesto would be clear, along perhaps with his investment strategy: he would conclude, as investors like say, that the “upside opportunity” in Italy of faster economic growth, along German lines, is big, if only there could be agreement to set the country’s energies free. The agenda would require a move to a unified but more flexible labour law; the transfer of public resources from today’s morass of unproductive uses into a new unemployment insurance system; the liberalisation of markets for both services and goods in order to allow more competition and innovation, and to lower costs for everyone. And of course more, including a much more ambitious version of the Gelmini reforms, to turn universities into world-class institutions which are forced to focus on students and results.

            It would be a liberal agenda, one that is not all that different from the one that lenders and other eurozone countries would be demanding if Italy were in fact to find itself in a sovereign-debt crisis. Which is why such a crisis would not in fact be a bad thing, in Italy’s case.

            An agenda like this would need political leadership. In fact it would need politicians who were interested at all in policies and in governing the country. For the time being, they are not. Yet as Hosni Mubarak, who is not Ruby’s uncle, is finding in Egypt, the status quo cannot necessarily be relied upon to last forever.

END.