THE BLOG

The Future of Italy

One thing is certain: Mr. Berlusconi's parabola of success is near the end, a parabola which has hovered over Italy for years damaging it. His announced resignation is a sign of defeat. When Mr. Berlusconi entered the political arena in 1994, Italy had just recovered from a devastating economic crisis thanks to the efforts of the Amato and Ciampi governments, the hard sacrifices of ordinary citizens, the extraordinary work done by the all social parts in signing an agreement avoiding bankruptcy. Now, these 17 years of Berlusconi end with Italy again standing on the edge of a cliff, with a growing public debt, without the reforms necessary to modernize the country. The global financial crisis affects the Italian economic frame and even though this scenario has everything it needs to recover, it is unfortunately "weighed down" by an "Italian System," which has been weakened by years of immobility. The tycoon, who had promised liberal reforms, took care of his personal problems, his companies, his lawsuits.

What's going to happen now? The path chosen by Berlusconi is quite clear: he wants to conduct the country to elections. Meaning there will be months of conflict, a harsh election campaign full of debates and insults (the thing he has always known how to do best), leaving Italy at the mercy of international diffidence and of financial speculation by those who have identified Italy as the weak link. In these conditions, where will the spread between the Italian titles and the German ones arrive seeing that during the morning it dramatically crossed the 560 threshold? Every single delay or uncertainty can immediately and rapidly become irreparable. And Berlusconi's strategy is leading right in this direction.

The path needed to overcome this situation is totally different. The strategy should be one of an emergency government, lead by someone recognized in Italy and abroad for his capacities and credibility, because credibility is Italy's greatest deficit at the moment. This government should be widely supported in Parliament and recognized by the citizens. The choices this executive would be called to make in this final segment of legislature (which ends in 2013) are not easy but certainly necessary. Public money has to be kept safe and a serious spending review of the costs of public administration is a must; the larger expenditure areas have to be reviewed, such as pensions, without punishing anyone but creating a unification between the generations, between the fathers and children of a county where the unemployment rate among the young is over 20% and the numbers are higher in Southern Italy. Laws have to be enacted to cut this unbearable lack of employment and rebalance a tax system that today is a burden on enterprise and work. Taxes for great patrimonies should be increased, the costs of politics should be decreased as should the size of administrative structures. A new government definitely has to write a new electoral law. Measures are needed to reverse this climate of distrust and give a boost to growth so avoiding a recession that would place Italy in the past and not the future and launch the country into an precarious situation both economically and institutionally.

Italy has all of the extraordinary resources and forces necessary, talent and creativity, capable entrepreneurs and workers and a solid industrial structure and great potential. Italy has the will to begin investing in the green economy and the new innovative sectors but all this is not possible if the right choices are not made, if the reforms we've been waiting for are not enacted.

Some speak about the various paths taken during this crisis by European countries: the one taken by Zapatero and the one taken by the Greek Papandreou. Zapatero announced his resignation and the dissolution of parliament and contemporaneously started up some measures agreed upon with the opposition to overcome the crisis. Papandreou left his position and an emergency government was installed with a solid leader who is now moving its first steps. The solution I indicate is similar to the one taken by Papandreou. However, I want it to be clear that the path chosen by Berlusconi is not the same as the one chosen by Zapatero. In Spain the first minister tried to find an agreement between all the political sides to give immediate answers to the citizens and Europe. Here, even in his decline, Berlusconi is following an opposite path, dividing the country and heading towards a clash during new elections. This is the wrong path to take and Italy cannot allow this to happen.