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Matteo Renzi's Italy: The Italian Reform Agenda 2014-2018 and the Perspectives

Matteo Renzi’s Italy: The Italian Reform
Agenda 2014-2018 and the Perspectives
Roland Benedikter*
Under its new young Prime Minister Matteo Renzi, who took charge in February
2014, Italy has started an ambitious reform agenda encompassing all sectors of politics,
economics and society. In addition to constitutional reform aimed at modernizing the
country in crucial sectors of politics, institutions and public administration, Renzi seeks
to liberalize the economy by taking advantage of favorable European framework
conditions such as the European Central Bank’s Quantitative Easing Program 2015-17,
which will pump billions of Euro into the Southern nations of the Eurozone. The
question is whether Italy’s systemic faults will allow the government to seize the moment,
or if the propitious situation for reforms that are urgently needed will once again be
wasted because of Italy’s notorious “culture of unsystematic change.” This essay is a
follow-upto the author’s piece on the constellation in Italy during Renzi’s predecessor
Mario Monti’s tenure, published in KRIS 2/2011. It provides a full picture of the current
state of the Eurozone’s third-largest national economy including its problems,
opportunities, tasks and perspectives within the greater European context.
Keywords: Italy, Reforms, Matteo Renzi, Economy, Politics, Finance, Systemic Innovation,
European Union, Eurozone
I. Introduction
The approbation on January 27-28, 2015 of the new electoral law “Italicum” that
sets new rules for forming governing majorities, and the election of new President
Sergio Mattarella, a member of the Constitutional Court, former minister for
Parliamentary Affairs and former Minister of Education, with the convincing majority
of 665 votes (only eight less than a two-thirds majority) in the fourth round of the ballot
on January 31, 2015, were perceived as two important intermediate victories for Italy’s
premier Matteo Renzi. They were indeed a promising start to the second year of Renzi’s
* Research Professor, Willy Brandt Centre for German and European Studies, University of Wroclaw/
Korea Review of International Studies
leadership, and thus of Italy’s ambitious reform program.
Forecasts by the national statistics agency (ISTAT) give Italy a modest chance of
recovering from recession in 2015 following an increase in domestic demand, for the
first time since March 2014, accompanied by a fall in unemployment from 13.4% in
January to 12.9% in February 2015, with youth unemployment sinking from 43.9% to
42%. In addition, the 1.4 billion Euro quantitative easing program 2015-2017 announced
somewhat surprisingly by the European Central Bank (ECB) on January 22, 2015 was
good fortune for the premier, since probably no other country will benefit more from
this measure over its planned pluri-annual course (until at least March 2017) than Italy.
In response to this boost, in February 2015 Renzi stated that “2015 will be a felix annum
for Italy that will allow us to recover and to run again for competitiveness in the years
ahead” (Renzi, 2015).
Encouraged by this, Renzi is now announcing “deep-reaching” reforms, “maneuvers”
(manovre is a term used in Italy for important political actions which willingly or
unwillingly also express the ambiguity and trickiness of Italian party and institutional
politics) and innovations on an almost daily basis. Nevertheless, the economic, social
and political situation of the nation which has been in recession three times since 2008
remains precarious, and its future course will depend on how fast and efficient fundamental
reforms that were promised for decades but regularly postponed or canceled by previous
governments will actually be implemented.
II. “Italicum” Replaces “Porcellum,” or: New Rules for Becoming
an Italian Lawmaker
The new electoral law, dubbed “Italicum,” was debated for years and eventually
forged in 2014 in an informal agreement between Renzi and former premier Silvio
Berlusconi. Beginning in July 2016, it will replace the highly disputed law “Porcellum,”
named by political philosopher Giovanni Sartori of Florence University after its “father”
Roberto Calderoli of the anti-centralist party Lega Nord. Calderoli, despite being its
author, defined the law as swinishness. His poor opinion of it was based on the fact that
“Porcellum” forced political parties in parliament to build large coalitions to govern,
making governments extremely prone to instability due to exaggerated demands by
small parties and independents. Exaggerated instability has been a problem for Italy
since WWII and led to a record of 62 governments since 1945, with the average
government failing to reach even a third of its projected five years in charge.
Although “Porcellum” was in place for eight years, it was declared “anti-
constitutional” in 2014 (sentence of the Constitutional Court No 1/2014 of January 15,
2014), an act seen by many international observers as typical of the “fluid,” (i.e. dialogical
and political rather than legal and juridical) nature of Italian lawmaking. It was viewed
as characteristic of a country that is used to implementing rules not as solutions to problems
or social changes, but rather as temporary compromises to be “further developed,”
“adapted” or withdrawn partially or as a whole whenever necessary or desired by a
sufficient number of groups or actors. As a consequence, Italian political culture has
been inclined to change things, even retrospectively, therefore failing to contribute to
Matteo Renzi
s Italy
legal certainty, reliability, and predictability. Reflecting this, Italian journalist Paolo
Palombo wrote, “Italian politics is capable of everything, and of the contrary of everything”
(Palombo, 2015).
III. The Background: A 50 : 50 Society Represented by an
“Abnormal” (Renzi) Political System
The background to this political culture was that Italy over the past decades was
a society characterized by 50 : 50 draws between leftist and rightist coalitions, producing
the shortest average lifespan of governments and therefore the most pronounced
political and institutional instability in the Western world. Extraordinary volatility has
characterized Italian post-WWII politics throughout Italy’s role between the Skylla of a
strong right-with Neo-Fascism regularly represented in parliament-and the Charybdis of
its function as the centerpiece of “Eurocommunism” and the respective counter-
movements and follow-up effects-from the 1970s to the 1990s (Benedikter, 1978). The
situation hasn’t changed in principle since the corruption scandal Ta n gen t opo l i, or Mani
pulite (Clean hands), of 1991-1995 that involved most established parties and profoundly
changed the political landscape. Never ending instability combined with the “countermeasure”
of an exuberant bureaucracy is one reason why most intellectuals and commentators in
Italy speak of the country as an “abnormal nation within the democratic world.” Or to
put it in the more direct words of Renzi himself, “Italy will never be able to be a normal
country (un paese normale) … because we have a much too complicated bureaucracy,
and to be honest a very irritating political system. We have twice the number of members
of parliament of the United States. We pay the presidents of some regions more than the
president of the U.S. is paid. I want to make Italy a more normal country, at least
concerning its political system” (Renzi, 2014).
In this light, the new electoral law “Italicum” is Renzi’s key to “normalizing” the
political culture of “the beautiful country” (Il bel paese) as Italy calls itself. The
decision-making process concerning the law was obstructed for months by parliamentary
opposition, with 47,000 modification proposals, including comedian Beppe Grillo’s
populist “Five Star Movement” (Movimento cinque stelle), the second most voted list in
the general elections of 2013. Eventually, it was agreed by Renzi in a bipartisan manner
with other parties, most importantly with former long-term premier Berlusconi, the
leader of center-right party Forza Italia, partly on the basis of personal sympathy and
behind closed doors. “Italicum” foresees awarding 55% of the seats to the party that
achieves 40% in parliamentary elections, i.e. 340 out of 630. It therefore tries to ensure
that a stable governing majority is created. The new electoral law also states that if no
party or coalition achieves 40% in the first round of elections, a second round must be
carried out in which only the two parties with the most votes can participate. The party
with the relative majority in this second round is then automatically allocated 55% of
the seats in parliament. This is intended to stabilize the basic political mechanisms of
the country and thus also change its political culture over time. In a compromise made
to secure the approval of small parties, Renzi lowered the minimum percentage required
to obtain a seat in parliament to 3%. This is considered too low by many international
Korea Review of International Studies
observers, and a potential source of further fragmentation and instability. In most well-
functioning democratic nations, the hurdle to access parliament stands at around 4-5%.
IV. Renzi’s Three Goals: Stability, Predictability and Simplification-
and the New President
The three core goals of “Italicum” under Renzi are to create greater stability and
predictability for Italy in a medium and long-term perspective, and to simplify in the
affairs of parliament. The groundbreaking importance Renzi ascribes to this measure,
making it the basic pillar of his reform program and the prerequisite of most subsequent
planned measures, is derived from the fact that parliament is crucial for the future of the
country. This is the case because in Italy, a bicameral multi-party constitutional democracy,
parliament plays a much more important role in the processes of governance than in
(semi-) presidential democracies such as France, or in a federal constitutional republic
such as the U.S. For the sake of simplification, Renzi has combined “Italicum” with the
goal of reducing today’s bicameral Italian parliament to one chamber which makes
decisions, the Chamber of Deputies (Camera dei deputati), accompanied by a Chamber
of the Regions (Camera delle regioni) made up of today’s Senate of the Republic
(Senato della reppubblica) and representatives of the Italian regions and municipalities,
with the role of an advising body for the government and administrative decision-
makers. With this, Renzi’s mandate intends to mark the end of the unique Italian
democratic system of bicameralismo perfetto (perfect bicameralism), a legislative
process where the two chambers have to agree on an identical text of every legislative
act, therefore in the case of corrections, often working in circles and making the overall
process much slower than in a system of bicameralism imperfetto (“imperfect bicameralism”)
(Baraggia, 2014). It is the reason why Renzi aims to end the so-called “Second Republic”
of Post-WWII Italy and replace it with a “Third Republic,” a historical act tied to the
change of the basic functions of parliament, government and their interaction (Lees,
2012). By simplifying decision-making through the elimination of the second chamber,
Renzi’s plan also aims to reduce the costs of the 951 parliamentarians Italy has to date,
in addition to 58 representatives of the 20 Italian regions which together made up the
1,009 electors who voten in the new Italian president on 29-30 January, 2015. In
comparison, the United States, with a population more than five times that of Italy’s, has
only 535 representatives in Congress).
Renzi’s three-dimensional goal of stability, predictability, and simplification of
decision-making is likely to be actively sustained by the new president Sergio Mattarella.
That support was the key criterion on which he was elected. Mattarella has been called
to be the “referee of the country” by premier Renzi, requiring simpler and clearer rules
that the new president will have to help impose on the nation’s key institutions and
political players. Mattarella seems to be well prepared for that job. The 73-year old
Sicilian, elected the 12th president of post-WWII Italian democracy, has extensive
experience in politics and public service. His late brother, Piersanti Mattarella, was a
former president of Sicily and was murdered by the Mafia (Cosa Nostra) in 1980.
Mattarella replaces Giorgio Napolitano, the longest serving president in post-WWII
Matteo Renzi
s Italy
Italian history, who finally retired aged 89 on January 14, 2015 after 10 years in office.
Mattarella will support Renzi’s reform agenda on a broad range of issues, and his
convincing election has noticeably strengthened Renzis standing and reform program.
In his first speech, Mattarella, a former Christian Democrat (DC) and author of the
electoral law “Mattarellum” issued in 1993 and later replaced by “Porcellum,” and who
is now in a role of an integrative figure “above the parties” (Daconto 2015), underscored a
second key problem of contemporary Italy: inequality.
V. A N ew Preside nt Dedicat ed to Solv e th e Pr oble m of Ine qual ity
Inequality is growing between both the rich and the poor, and the industrial
North and agricultural South. According to Mattarella, “redistribution hasn’t worked
well in the Italy of the past decades” (Wirtschaftszeitung, 2015). Indeed, 70 years of
social redistribution of taxes since the end of WWII, based on one of the highest
taxation levels in the Western world, haven’t fostered equality, given that the problem
seems to have continuously deteriorated since the 1990s. Seventy years of massive
public investment and rescue programs to develop the South, some implemented with
the help of Regional Development Funds, the European Social Funds (ESF) and other
programs of the European Union, haven’t made it more productive. Nor have they
succeeded in eradicating the Mafia. On the contrary, according to the official 2014 Report
of the National agency for the fight against the Mafia (Direzione nazionale antimafia)
presented in the Italian Senate in February 2015, the Mafia has “increasingly infiltrated
all of the North in the past years, including in particular Milan and the region of Emilia
Romagna, and the fight against its extended business with corruption has been inefficient”
(Cerami, 2015). In response, Mattarella has declared his intention to replace “local and
traditional measures” with Renzi’s envisaged systemic and “deep” reforms.
Little did it matter in the face of this constellation that Renzi, typical of Italy’s
multi-faceted political culture, had issued the order to his Partito Democratico (PD)
colleagues in parliament to cast blank votes in the first three rounds of the presidential
election in order to avoid the high quorum of two thirds requested in these rounds. This
move was criticized by many as a slight on parliament, the regions, and the institution
of the presidency itself. “By issuing the order to his party colleagues to cast blank votes
in the first three rounds, Renzi has proven that he is not seeking a personality sustained
by the broadest possible spectrum of parties represented in the parliament, but favoring
political games,” commented Alessandro Urzì, one presidential elector representing the
most economically successful Italian region, the Autonomous Region Trentino-South
Tyr ol (D ol omi te n, 20 15) .1
Little weight was also given to the irritation of Silvio Berlusconi about Mattarella’s
election when he stated on February 8, 2015 that “Renzi didn’t respect the pacts on who
1 South Tyrol is an ethnically mixed region with a majority of German native speakers of around 68%, 28%
Italian native speakers and 4% Raeto-roman native speakers in Northern Italy at the border to Austria. Cf.
Encyclopedia Britannica: Autonomous Region Trentino-Alto Adige,
Korea Review of International Studies
to elect, nor on how to elect. Therefore we have serious problems (RAI Televideo,
2015). Most in Renzi’s team do not think Berlusconi will retain the power he had within
the center-right to impose his ideas on the governing coalition in the years remaining of
Renzi’s charge. Rather, it is thought he will be the leader of a minority and therefore
play the role of one who tips the scales when it comes to decisions that depend on a few
key votes.
VI. Renzi’s First Steps in an Ambitious Reform Agenda
Renzi seems to be well aware that, at least from his viewpoint, the positive
developments of 2015 are only the first measures that must lead to broader and more
encompassing reforms in a nation used to mismanagement, corruption, and systemic
dysfunction of institutions. The “non-functioning of the state” (il non funzionamento
dello stato) (Cesi, 2014) has led the country into a downward spiral for years, if not
decades. According to the Eurispes Report of January 2015, 40% of Italians currently
believe the country should leave the Eurozone and return to its former currency Lira (up
from 25.7% in 2014) as it will never be able to afford “Germany’s currency,” the Euro,
because of the malfunction of the state and the lack of innovation. For the same reason,
45% of Italians in January 2015 said they were ready to leave the country permanently
if they had the chance (Eurispes, 2015). According to Eurispes, a highly re garded
independent research institute with a strong pro-European view, the “two brakes that are
holding Italy back” are “exaggerated bureaucracy and extreme taxation,” both of which
are due to the incapacity of the state to function in a more modern, lean, and fiscally
moderate way.
According to Renzi, the new electoral law with its promise of more stability, and
the relatively smooth election process of the new president, were important steps in the
reform of the country, particularly toward de-bureaucratization and liberalization- but
only the first steps. “Italy must renew around a third of its constitution to adapt to the
new requirements of our time” (Dolomiten, 2015), the premier stated at the World
Economic Forum in Davos in January 2015. Specifically, according to Renzi, in a new
political and institutional framework the economic, taxation, science and research,
educational, and justice systems must undergo significant reforms in order to regain
competitiveness in a nation that has lost credibility in recent years. In order to give new
impetus to the economy, Renzi plans to decrease the level of workers’ protection,, the
influence of trade associations, and introduce a more flexible legal framework for
enterprises to foster innovation and international mobility. “Italians want Italy to return
to being a laboratory of innovation rather than the museum it seems to be today,” the
premier analyzed in Davos (Dolomiten, 2015).
Italy’s Trade and Labor Unions do not appear to be amused by these plans. In
addition, in January 2015, Sergio Cofferati, the co-founder of Renzi’s center-left Partito
Democratico (PD) and former chief of the mighty labor union CGIL, left the party in
protest at what was described as Renzi’s overly liberal and “non-leftist” course. According
to Cofferati, this was a “betrayal” of the working class and leftist voters.
Matteo Renzi
s Italy
VII. The ECB’s Strongest Card: The Eurozone Quantitative
Easing Program 2015-2016 and Italy as Its Probable Main
While there have been setbacks, Renzi has been riding a lucky wave to the point
where he seems to have a real chance of surviving longer in office than most other
recent Italian premiers. The surrounding European constellation is unexpectedly favoring
his mandate. Of the reported 500-700 billion Euro that the ECB has already spent in
recent years on buying up federal bonds of the Eurozone’s crisis nations, about one third
is thought to have been spent on Italy (The ECB never publishes the bonds in which it
invests in order to avoid animosity between Eurozone member nations). And of the 1.4
trillion Euro (80 billion per month) planned to be printed or procured by the ECB from
January 2015 until mid 2016, and which is to be pumped into the banking sector and
spent on further bond acquisitions from Eurozone crisis nations, a considerable amount
will go to Italy, the third-largest Eurozone economy and certainly the worst hit of its
large economies. Encouraged by this, on February 7 Renzi stated that “2015 will
obviously be a lucky year for Italy, a felix annum, that will allow us to increase our
strengths … and resume the race again” (RAI News 24, 2015).
Indeed, the ECB’s QE program could ease Renzi’s work in potentially decisive
ways, giving him the chance to issue public investment programs again and partially
end the austerity course imposed for years by the Northern Eurozone members. This is
driving confidence in the Italian public sphere. According to the National Institute of
Statistics, “the confidence of enterprises in February 2015 rose to their highest since
June 2011 at 94.9 points, up from 91.6 in January. This could be an effect of the QE
program of the ECB. The confidence of Italian consumers, which hasn’t been high since
2010, has also risen to 110.9 points, up from 104.4 in January. Positive influence has also
come from employment data and the election of Sergio Mattarella” (Mediaset Economia,
But the encouraging environment could also carry some danger in that the
announced reforms might be softened or carried out half-heartedly. Those familiar with
Italy’s political culture know that this danger is all too real because there are many who
will try to claim their piece of the pie. The labor unions, for example, will insist that the
reforms of the public sector, with cuts in the social system and the elimination of
thousands of administrative posts, are no longer necessary.
In order to take full advantage of the ECB QE program, and of the positive mood
in the country, to push the lending sector to put more money in circulation in order to
fuel domestic demand, in January 2015 Renzi issued plans to institute, for the first time,
a national “bad bank.” This has long been a taboo for the conservative banking sector,
which is highly averse to admitting errors. At the end of January 2015, Italian economy
minister Pier Carlo Padoan was the first member of government to discuss the foundation of
a national bad bank aimed at liberating the Italian money institutes of bad credit, which
stood at 45 billion Euro in 2007 before the start of the Eurozone debt and economic
crisis and which exploded afterwards and reached a record high of 181 billion Euro at
the start of 2015. Of every 100 Euro lent in 2015, 18 Euro did not return to lenders, or
was expected to do so with disproportionate delay.
Korea Review of International Studies
While some Italian intellectuals and public figures expect this measure, combined
with the ECB QE program, to be a serious spur towards rapid recovery for a country all
too long in political, economic and social havoc, others remain skeptical since the origin
and background of the crisis is more complex to allow it to be decisively influenced by
just a few key measures. Realistically, the Italian constellation, including the standing of
the premier himself, will remain difficult, irrespective of the social psychology of the
nation and the Eurozone. This is also due to the fact that Renzi, to put it in more cautious
terms than Cofferati’s “betrayal” rhetoric, is perceived by many within the Italian left as
an “unidentifiable” figure when it comes to traditional patterns of leftist politics, and
thus as a political personality who may not be worth unconditional support. Renzi’s
perception as a dubious player with no clear political standing weakens his position
within his own party coalition, thus presenting challenges beyond the tasks of the
reform program. So who is the premier on whose performance, stubbornness and
steadiness the destiny of Italy’s reform program will depend?
VIII. Matteo Renzi: An “Atypical” Italian Premier?
“Italy must become simpler.” This is how Renzi summed up the state of affairs in
Il bel paese during his visit to the United Kingdom on April 1, 2014 (RAI News 2014).
He repeated this slogan during his meeting with then EU-commission president Manuel
Barroso in August of the same year, and has done so many times since.
Renzi, the 40-year-old prime minister of Italy, is the youngest ever in the nation’s
modern history and thus branded the “Tony Blair of Italy.” He took power on February
22, 2014 at 39. Renzi describes himself as an “atypical” member of the Partito
Democratico, or Democratic Party of Italy (PD). The PD is the mainstream social-
democratic party that integrated remnants of the former mighty Italian Communist
Party (Partito Comunista Italiano), the moderate center-left parties Democrats of the
Left (Democratici di Sinistra)and Democracy and Freedom (La Margherita), as well as
other, partly radical and militant, leftist factions in October 2007. It subsequently moved
the Italian left towards a more integrated, moderate, centrist and partly populist approach,
with the goal of regaining the center-left’s status as a broad “people’s party.” This role
was lost during Tan gen top o li or Mani pulite, a corruption scandal in the first half of the
1990s which involved most established political parties, including those of the left, and
ended the so-called First Italian Republic by giving birth to new parties, thus dramatically
changing the nation’s political landscape. But if mainly being dedicated to the goal of
improving the popularity of the Italian center-left, not least by balancing its left and
right wings as most before him tried, why does Renzi pretend to be “atypical”?
First, he didn’t build his career in the “classical” way, ascending through the
PD’s party hierarchies by virtue of patient service and diligent adherence. Instead, he
was appointed to the highest political office in Rome through public boosts by
systematically promoting himself as a “free spirit” able to connect with all sides of the
all too complex and fast changing Italian political spectrum.
Second, Renzi undoubtedly belongs to the “rightist” wing of the Italian left,
having an exceptionally good personal relationship with former center-right prime minister
Matteo Renzi
s Italy
Berlusconi of Forza Italia. By actively strengthening the liberal and “right” wing of the
PD, Renzi hopes to better access the shuttered Italian middle class, which is afraid of
declining as seldom before in Italy’s newer history, even if the price may be to lose
parts of the radically leftist working class.
Third, Renzi successfully marketed himself from the start as a combination of
“young,” “intellectual” and “anti-establishment,” although always openly declaring
himself as an eager careerist whose dream it was as a boy to become the premier of his
country one day (Renzi, 2015).
Building on these three elements, from early on Renzi gave himself the nickname
“the scrapper” (il rottamatore) because he claimed, as his personal slogan and most
distinctive feature, to “scrap” the “old” political elites of the country, both from the left
and the right, in order to replace them with a timely version of Tony Blair’s and Bill
Clinton’s “Third Way” politics, i.e. by what was called a merger of liberal, conservative
and leftist (Italian Marxist) policies. Renzi sometimes prefers to call this an “integrative
mix” or, in an allusion to his origins in Florence, the home of national poet Dante
Allighieri, “new style” (“stile novo”) (Renzi, 2012). Renzi uses such populist terms much
more often than most of his fellow politicians to distinguish himself from his competitors
as “more contemporary” and even “more intellectual.”
Independent Italian critics, though, often ridicule Renzi’s “mixed” approach as
being neither fish nor flesh and lacking substance. They criticize his use of the pretension
of a “Third Way” and say he allows himself to remain vague, eclectic and populist,
choosing in many cases unformulated options and saying what his audience wants to
hear. Critics from both sides in fact do not praise Renzi but accuse him of simplification,
which they consider inappropriate, particularly in an overly-complex and highly
contradictory political landscape characterized by an accentuated North-South divide
that, in the eyes of many, requires double redefinition of every single national issue.
Renzi’s “simplification” issue is indeed in some ways ambiguous. His rise,
first to mayor of Florence (2009-2014) and then to youngest political party leader and
premier of Italy, is unimaginable without his early engagement of professional “spin
doctors.” They helped to systematically deliver the “non-traditional” and “new” message
in simple ways to be easily understood by the public, and to style him accordingly,
including his physical appearance, which changed in line with his ascent to power from
average to stylish, securing him an outstanding position in the current Italian “attention
economy.” This proved to be a decisive move in a country which, as Andrea Billi,
Professor of Economic Policy at the Università La Sapienza Rome, OECD researcher
and Roman insider, told the author: “You can probably joke about everything in Italy,
except two issues; How to have a meal and how to clothe yourself. Inappropriate clothes
are a no-go in Il bel paese, and you can’t fix the damage once it is done; as is drinking a
cappuccino after lunch. After lunch you must drink an espresso, without milk. If you
drink a cappuccino, you show that you have no attachment to Italian culture and
demonstrate insensible behavior, and people despite nice words will not really forgive
you your bad, even if you are a foreigner” (Billi, 2014).
At least where it concerns these issues, Renzi seems to be much less “atypical”
than he claims.
Korea Review of International Studies
IX. How to Achieve Power by Overthrowing Your Party Friend, or:
From Letta to Renzi
A s elf-d eclar ed reforme r and innovator, Re nzi achieved his po sition not by b eing
elected by the voters or parliament, but, typical of Italy’s Machiavellian political culture,
by overthrowing his PD party colleague Enrico Letta (in charge from April 2013 to
February 2014) in a behind-closed-doors party revolution that, in the eyes of the average
Italian public, had the strong smell of a proverbial Roma ladrona (Rome the thief)
conspiracy. It was a move unimaginable in most other Western democracies.
Imagine Barack Obama being replaced by a Democratic Party colleague while in
charge without a specific charge, or German chancellor Angela Merkel by another
representative of her Christian Democratic Union through an inner-party vote. Renzi’s
takeover during Letta’s term in office was a decision taken in an ongoing battle between
the PD faction of Florence, the stronghold of Renzi’s center-right wing, and Parma, the
home of Letta’s center-left wing. Florence can be viewed as the intellectual center and
Parma the traditional working-class base of the Italian center-left. International media
immediately branded Renzi a political “serial killer from Florence” given his careful
planning in “murdering the king” and “slaying the head of his own family” (Armellini,
Despite all contrary rhetoric, the turn away from Letta to Renzi (and from Parma
to Florence) did not cast Italy in a positive light from an international viewpoint. Most
commentators expressed concern and irritation. While not necessarily typical of Italy’s
institutional and party practices per se, this move featured the very characteristics that
traditionally weaken Italy compared with most other Western democracies both functionally
and in its reputation: inner-circle logic of extremely complicated and rapidly changing
faction fights between comparatively small groups within parties that make it so hard to
govern; and a vested-interests mentality of influential groups of “political families” that
continues widely unbroken even after the departure of Silvio Berlusconi, the four times
prime minister of Forza Italia (Forward Italy!) and later of the party alliance Popolo
della Libertà (People of Liberty) who failed to reform and liberalize the country over his
10 years of governance stretched between 1994 and 2011.
Many observers both abroad and at home had not expected such behavior from a
relatively “unconsumed” public figure such as Renzi, who based his flamboyant rise on
the slogan: “What Italy needs most is a capillary revolution that involves everything and
everybody, a profound change and a new logics of politics to overcome its crisis” (Il
Corriere della Sera, 2013), rightly pointing out that Italy’s crisis in essence isn’t primarily
an economic, but a systemic one, a crisis of how politics work in this country. Given the
way he rose to power, Renzi’s actions contradicted his own slogan, adding to his
reputation as a populist careerist and intelligent ”chameleon.”
X. Renzi’s Italy: A Nation in Urgent Need of Reform
Against this backdrop, Renzi’s constant “simplification” and “innovation” rhetoric
is a feature that connects him to a large extent to Berlusconi, known over the decades
Matteo Renzi
s Italy
for his “first of all we must think positively” rhetoric. But there is some truth in this
“Renzusconi” rhetoric too, when “simplification” is connected to the “positive” insight
that Italy is in urgent need of reform in all crucial fields, a reform that can’t be postponed
any longer without good reason. Since his time as the mayor of Italy’s art capital
Florence (2009-2014), and prior to that of the Province of Florence (2004-2009), Renzi
pointed to three main reasons behind the decline of Italy from the 6th largest economy
in the world in 2009 to 10th in 2013: from technological leader to second-hander: from
a country of growth to one suffering three recessions since 2008 (Walker and Zampano,
2014). From a prosperous middle class to record unemployment, with youth (i.e. under
25) unemployment, despite slight recovery, at records highs of 42% not least due to
Italian “gerontocracy,”- a systemic attitude that favors those who already have a job “for
life” and is adverse to change, life-long learning and flexibility, leading in 2010-2015 to
the most extended brain drain in modern Italian history since the 1970s. The tourism
industry alone, the third most important industry in the country, lost 10,000 jobs in 2013.
The three factors at the root of Italy’s decline are: 1) a lack of meritocracy both
in professional life and in the cultural mentality particularly in Rome and “South of
Rome” (the Mezzogiorno), which influence the whole country not least through a
national bureaucracy steadily in the hands of Rome; 2) an over-complex bureaucracy,
leading to an exaggerated number and density of laws; 3) exaggerated taxation. Italy,
according to the National Industrial Association Confindustria in 2013, had the highest
combined taxation in Europe, i.e. taking all taxes together, including national, regional
and local, value tax and those on fuel and energy (Il Sole 24 ore 2013). Taxation was on
average 54% of the GDP and up to 70% on enterprises. Such a tax burden harms the
economy, destroys thousands of small and medium sized enterprises, creates youth
unemployment, and induces many Italians, particularly the well educated and highly
skilled, to emigrate, as the past five years have shown.
These problems are not new, but “classical” on the Central South European
peninsula. In response, Renzi’s political program since his rise to premier in February
2014, a tenure that formally ends in 2018, tries to hold true to the comparatively
“radical” reform expectations created in the process of his rise, if not in all proposed
single measures, at least in the basic intent. Besides incessant rhetoric appealing to
“hope,” “trust” and “positivity,” at its core are promises of “deep” reforms oriented
towards the German model of competitiveness and efficiency. This model is, as Renzi
never fails to underscore, “in principle” neither leftist nor rightist but rational and
Renzi’s reform program pursues increased meritocracy and an accent on competition;
reduction of labor protection; reasoned wage agreements and a general “restriction” of
the power of the labor and trade unions; “generational transfer” in public administration
including early retirement and the phasing-out of workplaces in the public bureaucracy
(Italy has one of the biggest administrative apparatus of all 34 OECD countries with
uncountable privileges); general reduction of bureaucracy with particular regard to small
and medium-sized enterprises; simplification and, where appropriate, amalgamation of
laws; cuts in the social welfare system and a stronger accent on self-reliance; lowering
of taxes, in particular for the weaker sections of the population; and as a combined
result, lowered unit labor costs, better competitiveness and, as Renzi hopes, a new
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“pioneering spirit” of innovation, investment, social mobilization and progress in the
Tak en t oge th er, R enzi i s in e ssen ce p ursu ing t he s ame “s ofte ned” p ro-lib eral
reform agenda for the third-largest Eurozone economy as Chancellor Gerhard Schröder’s
“Agenda 2010” of 2005 did for Germany. The “Agenda 2010” anticipated similar
measures, thus building the prerequisites of Germany’s current economic and social
success. The difference is that Renzi, like Manuel Valls in France, has to try to implement
a similar program 0 years later than Germany. As Renzi was criticized by Cofferati for
his “anti-workers politics,” so too was Schröder accused by the left wing of the Social
Democratic Party of Germany (Sozialdemokratische Partei Deutschlands) of “betraying”
its leftist basics, and as a consequence lost the following election.
Will Renzi be ready to make the same sacrifice in the interests of Italy? Or will
the political culture of Rome prove too different from that of Berlin, despite the
common currency of Europe’s North and South?
XI. Renzi’s Crux: Advertising Reforms but Not Realizing
Consciously ignoring this delay and in particular the differences between Italy
and Germany in relation to meta-party rationality, parliamentary efficiency, public
solidarity and social cohesion between the social classes concerning difficult decisions,
what the Italian premier strategically intends is to give Italian voters the impression of a
serious reform effort in the conjuncture of conservative and liberal policies by means of
an open-minded premier who orients himself towards the future, not the past. It was no
accident that Renzi used his official visit to Silicon Valley on September 22, 2014 to
theatrically state that “a systemic revolution is needed for Italy. Because our cities are
outstandingly beautiful, but risk belonging to the past … Italy is a great country, but has
some incredibly weak spots … For us all, San Francisco is the capital of the future. Italy
is no normal nation, but a special one, both in the good and the bad sense. We need a
revolution in the public administration, in the political system, in the labor system. Italy
must invest in an anti-corruption campaign, and in the renovation of its justice system: a
civil trial shouldn’t take longer than one year” (RAI News, 2014).
With this, Renzi tried to exemplify the extent and aspirations of his reform
program without hiding the many problems he is facing when trying to push them
through the existent constellation and culture.
But despite all the talk of reform, in his second year in office not much of
Renzi’s ambitious agenda has been realized. The approval of part of his envisaged labor
market reforms by the Italian senate at the start of December 2014, which foresees a
loosening of extreme employment protection and triggered violent labor unions protests,
was Renzi’s most important achievement that year. Nevertheless, as always in Italy with
approved laws, it remains to be seen if the measure is enacted, and if so, in what way
and to what extent. Some skepticism is appropriate since under the systemic impact of a
very strong Communist Party (PCI) the whole Italian economic and fiscal system since
the 1970s has been built on those who get monthly paychecks and have life-time
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s Italy
positions as employees, although their number is, as in other developed nations, rapidly
shrinking and will probably not be typical in a couple of years time, which is one reason
why the Italian taxation and legal system is lagging heavily behind most other modern
In the meantime, unlike Spain or Portugal, which managed to implement relatively
fast and serious reforms, despite rigorous austerity courses and significantly lowered
taxation in 2014, there is still nothing similar when it comes to Renzi’s practical
achievements. Instead, in 2015 the Italian premier still appears on TV shows, radio
interviews, and discussion rounds from morning till night to advertise the need for
reforms to the voters and the broader Italian public. With this “propaganda campaign”
he is trying to break the vicious cycle of the national political elites’ notorious culture of
“one hand feeds the other” mentality that has in many cases succeeded in blocking the
implementation of serious reforms in past decades. Given that Rome is described as a
self-referential microcosm, extraterritorial from the rest of the nation where connections,
friends and Machiavellian slyness count more than achievements, experience and merits, the
prime minister from “high-culture” Florence often still seems to be talking to a brick wall.
As mentioned previously, Renzi’s propaganda is not dissimilar to that of the last
years of leadership of his colleague and predecessor as premier, Silvio Berlusconi, who
guided the country from 1994-1995, 2001-2005, 2005-2006 and 2008-2011. Like Berlusconi,
Renzi’s rhetoric is sometimes unclear and, due to the constant pressure of a myriad of
interest groups, its content changes over time. Nevertheless, his public pro-reform
propaganda is so intense that many ask when Renzi has time to govern given his constant
media presence. Many intellectuals state that Renzi seems to be more about words than
about action. Others, after Renzi’s first year in power, bluntly assert that he is no more
than just another “bluff of the system,” accusing him of a “lack of focus” (Münchau,
Despite some successes in regional and local elections following his appointment,
time is inevitably getting short for Renzi. In addition to Italian voters, the European
Union is getting nervous too. Renzi was repeatedly admonished in the summer, and
again in December 2014, by the chief of the European Central Bank, fellow Italian
Mario Draghi, for announcing reforms but not actually implementing them (Polleschi,
2014). And while Renzi in 2015 was still seeking to convince his fellow citizens that the
Italian political, institutional, and economic system is in urgent need not only of superficial
corrections, but of a fundamental overhaul, the alarm bells of a nation in recession
couldn’t be ringing more loudly.
XII. The Eurozone’s Low Interest Policy and Italy
The signals are that the nation isn’t moving forward fast enough, and that it is not
making sufficient progress to overcome the systemic crisis (Benedikter, 2011) that has
led to years of recession. Italy’s economy hasn’t grown substantially over the past 14
years, while other European crisis nations seem to have made some slow, but steady
progress recently. As the chief of the Euro rescue funds ESM, Klaus Regling, asserted
somewhat surprisingly in December 2014, Greece seems to have implemented some
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useful reforms of bureaucracy, welfare state, and labor regulations, while Italy hasn’t,
and thus must from 2015 regard Greece as an example to follow: “Structural reforms
decide progress. It’s very easy in the end: Countries that implement serious reforms
become successful within just a few years. It’s as easy as that. You just have to do it
(Eder, 2014).
The good news for Renzi is that he has help in his reform efforts. In order to
sustain reforms and to make sure that the interest paid on public debts remains low,
particularly while systemic change is implemented, the ECB under Mario Draghi is
keeping the low interest policy at zero levels in order to buy time for countries to undertake
the necessary reforms and become more competitive. However, the ECB’s zero interest
policy, which impacts not only the spearhead institutions of Europe, but every single
citizen independently of her or his wealth and social standing, threatens the trust of
savers and is a mechanism of supporting the public debt and banking systems of crisis
countries like Italy by actually expropriating all European savers. This has already led
to some public polemics and upheaval particularly in saving-oriented nations like
Germany, where the ‘man on the street’ feels that he is indirectly paying the bill for the
errors of the Eurozone’s Southern countries such as Italy (Gburek, 2014).
Despite this policy, Italy does not seem to have used the time to its advantage.
According to the Renzi government itself, taxes in the past 30 year have always risen,
never stagnated or decreased, an anomaly among post-industrial nations, which in
principle tend to tie taxation to the capitalistic cycles and lower them in favorable times.
The vicious circle of exaggerated taxation, increased for decades, even in growth phases,
sinking income of the state due to the failure of enterprises and prolonged recession, as
well as the resulting lack of public investment in research, innovation, education and
science, has led the country into a downward spiral. As a consequence, enterprises failed
at record high levels throughout 2012, 2013 and 2014 with an average of two Italian
firms closing down every hour, and 60,000 enterprises lost since 2010.
XIII. Two Problems of a Nation Notoriously Short of Money:
Corruption and Tax Evasion
Additionally, Italy has one of the highest corruption rates in the world. It was
ranked 69th in the latest Tra nsparenc y Inte rnati onal Corruption Perceptions Index 2014,
at the same level as Swaziland, Bulgaria, Romania and Greece, way behind most Arab
and Asian countries, including China, but also behind Namibia, Ghana, Rwanda and Cuba
(Transparency International, 2014). This makes this Southern European country the most
corrupt of all in the Eurozone. It hasn’t substantially improved over the “reform” years,
having been ranked 72nd in 2012 and 69th in 2013. This is of particular relevance since
Italy, unlike Bulgaria, Romania or Greece, is the third-largest Eurozone economy and
will most probably keep this status in the years ahead.
Corruption scandals that involve the whole spectrum of politics, institutions,
economy, administration and society still remain a normal daily occurrence in the national
news under Matteo Renzi. Cases like the MOSE dike scandal in Venice, with the former
regional governor and many high-ranking officials arrested in autumn 2014 for having
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s Italy
manipulated the call for tenders and the competition for public money, or the EXPO
corruption scandal 2014 in Milan where a criminal fraud worth billions of Euro was
discovered in May 2014, are almost part of the daily routine.
Most large projects in Italy are threatened by corruption. This has ensured that
the new epochal case of a Mafia circle corrupting most of Rome’s municipal administration
and parts of the political elite in parliament in December 2014, a scandal called Mafia
capitale or Skandalus Maximus, triggered by the activities of boss Massimo Carminati
and allegedly involving former mayor Gianni Alemanno, wasn’t perceived as particularly
surprising to the public. As Carminati claimed, without presenting any immediate
evidence, even the highest circles in the political sphere of the capital are allegedly
concerned “that those in the underworld are able to do their jobs, because we are doing
what nobody else wants to do Do you know how much money is in the informal
administration of the immigrants for whom nobody cares? More than in the drug
business” (Rucco, 2014). Carminati provocatively described the Roman constellation,
asserting that the Mafia allegedly makes a good part of its money by housing refugees
and illegal immigrants for whom the government hasn’t developed any programs, and
by organizing the crimes that these poorest of the poor need to pay the Mafia for their
apartments and to survive.
No wonder Italian Justice Minister Andrea Orlando described corruption in January
2015 in a speech to parliament as the “number one evil” in Italy, denouncing it as having
reached an “intolerable level” which has “devastating effects on the economy and on the
public like few other factors” (ANSA, 2015). This is also due to the interrelation of
administrative bodies with activities of the Mafia that have increased over the years
despite all efforts of the fast-changing governments. Indeed, the frequent change of
governments is probably one of the problems behind the lack of success in anti-
corruption efforts. The criminal organizations produce and distribute counterfeit money
in the South of Italy on an industrial scale, which many see as only possible on the basis
of protection from corrupt local and regional authorities and politicians. For example,
there was a record 306,000 fake Euro coins worth 556,000 Euro discovered in December
2014, south of Rome. According to police, Italian criminal associations are responsible
for 90% of all fake Euros circulating in the world (APA, 2014).
Summarizing the situation in January 2015, the president of Italy’s anti-corruption
agency, Raffaele Cantone, stated that “the repressive system against corruption Italy has
now obviously doesn’t work. Taken as such, it solves absolutely nothing. If we don’t put
a system of prevention in place accompanied by a cultural campaign which helps
people understand that corruption isn’t a crime against the public administration, but
against society, we will not win against corruption” (D’Aprile, 2015).
XIV. ‘Cultural’ Habits at the Root of Corruption and Evasion?
Pros and Cons
“Cultural” habits may be the real problem behind the seemingly in surmountable
corruption. In his hugely popular television shows on the Ten Commandments, for
which he was personally congratulated by Pope Francis, in December 2014, Oscar-
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winning comedian Roberto Benigni alluded to the Mafia capitale scandal in Rome by
saying: “The seventh commandment is ‘Thou shalt not steal.’ God loves the Italians
exceptionally, because he has written this commandment specifically for them.Thou
shalt not steal’ is aimed directly at the Italians. It is the most ignored commandment. In
Italy only the children understand its meaning.”
Obviously, Italian social norms are different from, say, Swiss or Norwegian
social norms. However, political scientists nowadays typically tend to emphasize the
role of institutions over culture, which seems reasonable: ‘Individuals in power will steal
whenever they are given an opportunity to do so, independent from the cultural framework.’
But on closer inspection, the problem seems not to be mono-causal, but rather a circular
one: institutions and culture are interconnected and influence each other in a never-
ending “hermeneutic circle” of practical behavior that results in concrete ways of making
Hence the challenge is on the one hand to reform institutions so as to make
corrupt practices more difficult, which will trigger cultural changes that may then
follow over time. On the other hand, it is also to change mentality patterns in order to
enable reform of the institutions.
In today’s Italy, many understand the need for such a “hermeneutic circle” of
reform at the interface between institutions and culture. As Renzi himself reported on
November 27, 2014 at the opening of the Academy of the Italian Tax Police in Rome,
tax evasion in Italy now amounts to 91 billion Euro per year, or: 6% of the national
GDP. The nation therefore needs, according to the premier, a “cultural revolution”
particularly with regard to the relationship between the tax authority and citizens. Italy
“is not lost, but can be changed with the help of all its citizens,” Renzi said, alluding to
the possibility of a new “culture of cooperation” between the state and citizens, instead
of the traditional mutual mistrust.
Renzi’s government plans to de-bureaucratize, simplify and speed up the confiscation
of wealth accumulated through corruption, and to introduce more comprehensive controls
of public competitions, a so-called “package for legality.”
XV. Can Italy’s Industry Survive the Nation’s Fallacies?
The Cases of FIAT and the Italian University System
While Italy’s national debt reached record highs despite, or as many assert, because
of, non-legal practices combined with non-meritocracy and austerity politics, increasing
numbers of the best educated and most gifted young Italians are leaving to escape
unemployment and the afore mentioned record taxation of up to 52% on income (The
global average is 40.9%. Switzerland 29%, other countries in the EU such as Croatia, as
low as 18.8%).
Under these circumstances, it was only the tip of the iceberg, although with a
symbolic significance difficult to overstate in the view of the average Italian citizen,
when in November 2014 the icon of Italian industrial production, FIAT, the world’s
seventh-largest automaker based in Turin since 1899, left the country in a shocking
transfer outside the Eurozone to London due to the “systemic inadequacy” of Italy, as
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s Italy
CEO Sergio Marchionne expressed it (Kerner, 2014).
Marchionne was referring to the combined record tax pressure which does not
exist in other OECD countries and which is linked to overflowing bureaucracy leading
to a record number of laws often contradicting each other, with some still stemming
from the Fascist era in the 1920s or even from the founding era in the 1870s. The
resulting legal uncertainty has created a situation too unstable for enterprises to seriously
invest in the country. Marchionne also pointed out the exaggerated power of trade and
labor unions in Italy, with the ability to block most reform initiatives and protect the
status quo; an over-complex institutional framework close to ungovernability, and the
50: 50 split political system with too many too-small parties represented in parliament
and, as a result, rapid changes of government. Last but not least, Marchionne also pointed
the finger at an incestuous university system left for too long “autonomously” in the
hands of informal academic circles and specialized associations, who in the past decades
have been eliminating meritocracy systematically in favor of group control.
Indeed, there is rarely a competition for any university post in Italy today that
has not been unofficially decided behind closed doors by the appointment committee
and its friends and connections in national scientific groups and circles according to the
“One hand feeds the other” mentality. In the Italian university system, this is expressed
by the motto: Uno tuo, uno mio, uno bravo-One for you, one for me, one good one.
The result is that Italy has one of the lowest levels of internationalization in the
university system of all major OECD countries, and one of the lowest levels of
permeability for non-nationals. As high-ranking sources in the Italian Ministry of
Education, University and Research (Ministerodell’Istruzione, dell’Università e dellaRicerca,
MIUR) bluntly commented: “Italian competitions for university posts (bandi di concorso)
usually bear only the name ‘competition’; in reality they are formalizations of previously
taken informal decisions.” It is not unusual for the other candidates to receive a phone
call from a member of the appointment commission ahead of their interview inviting
them to withdraw, otherwise the commission would have to write a negative judgment
on the candidate despite and publish it on the Internet, thus threatening their future
Under the pretext of “transparency,” Italy actually introduced the procedure that
sees the internal judgments of an appointment commission usually published on the
internet. Most believe this was introduced to maintain the anti-meritocratic routine of
Italian “competition” and add pressure upon candidates who want to stand up to the
practice. In addition, the university system is seriously under-funded by the government.
In 2013, Italy was the only OECD country that lost about 20,000 students, or as the
authorities stated “one whole ateneo (university), while all others grew in numbers
(Bompani, 2014).
Overall, Italy’s social culture is all too often anti-meritocratic, and this is extremely
pronounced in the university and education sector. As a result, science and research
have been falling back continuously over the decades because of a lack of competition,
low penetrability from the outside, and a “web of friends mentality that ensures the
system is widely impenetrable to those outside the circle. One phrase summarizes this
situation: “If you are in the system, you have access; if you are not in the system, you
will never get into it.” Taken together, the current Italian university system is a vicious
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circle almost impossible to reform from the inside because it is highly self-referential,
with most of its leaders and opinion makers involved and benefiting from it. The only
possible reform could come from the political sphere, which, however, doesn’t regard
reform of the university system a priority. It is also clear it would be extremely difficult
to reform them after 70 years of “independence” and a lack of democratic control, being
that the university system is the only extraterritorial space in modern Western democracies
that reproduces itself not being submitted to democratic control or objectively supervised
rules. It was not by chance that Mario Monti, one of the predecessors of Renzi as
premier and himself coming from the university sector as a professor of economics at
the Università Cattolica di Milan, after some courageous statements immediately gave
up the task of university reform in order to do “other work” since not even he regarded
the relation between the effort needed and the potential result as worth a serious try
(Urbani, 2013).
Against this backdrop, FIAT founded the new Holding FIAT Chrysler Automobiles
(FCA), whose shares debuted in October 2014 on Wall Street: ironically on “Columbus
Day.” Thus, the Milan Stock Exchange lost its most important industry player and the
nation its most important manufacturer after 111 years. Interestingly, while the media of
other leading industrial nations reported intensely on this historic break in the nation’s
economic history years before it actually happened (The Economist, 2011), in Italy the
debate was almost non-existent and was quickly removed by the media from public
attention. As Renzi stated, “We should not cry ourselves to sleep, but stand up and go
forward, and change the face of Italy” (Il Messagero TV, 2014).
The question arises whether the best approach was to just move on from the loss
of the nation’s iconic enterprise or if intensifying reform efforts wouldn’t have been a
better response. In fact, the case of FIAT is not the only one with symbolic meaning for
the country. Other national business icons are trembling too. One of Italy’s sporting
icons, AC Milan, the most successful football club in the world and owned by Silvio
Berlusconi seems to be in the process of being “denationalized” much to the shame of
its millions of followers. Negotiations on the sale of the majority of the club bonds have
been going on for years, confirming the fears of many Italians, including those not among
fans of the club, of a sell-off of the nation’s objects of pride because of inefficiency, lack
of success and incapacity.
Emblematically in the eyes of public social psychology and “contextual politics,”
AC Milan in 2014 was among the clubs paying the highest combined salaries but failed
to qualify for the European Champions League, nor any other major competition, and
ranked 8th in the Italian national league, 45 points behind winner Juventus (Stock e Elli,
XVI. Two More Critical Issues: Overregulation Combined with
Low Law Efficiency
Beyond these daily symptoms, there are even more unresolved issues for Renzi’s
Italy. Among them are, in particular, two that are heavily influencing the stagnant
recovery of the peninsula:
Matteo Renzi
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First, Italy has an excessive amount of laws and regulations. As is all too well
known to every Italian citizen, many of them are too complex to be understood and
properly related to each other, even by experts. Consequently, Italy has the highest
number of lawyers per population in the Western world. More importantly, laws and
regulations are often contradictory, while over-regulating every single issue of daily life.
Second, at the same time the nation’s courts are ranked among the least efficient
and slowest in Europe, according to OECD research (OECD, 2013).
Over-regulation and low efficiency are interrelated in their causes, their mechanisms,
and their effects. As scholars such as Antonio Giuseppe Balistreri have pointed out, they
were inbuilt at the very source-i.e. the foundation process-of the modern Italian nation
state itself (Balistreri, 2006).They are, at least in part, the result of a nation born as a
deliberately “weak state” in 1861, because Italy was founded by liberals in cooperation
with the Catholic Church, who were both were skeptical about the new nation state. The
Church did not want to lose too much of its power to secular institutions while liberals
wanted to restrict the power of government and keep it out of people’s daily lives.
Despite the similarity to the U.S. idea of “small” government, the Italian liberals
identified “small” with “weak”-a fact that was never the case in America. The result
was the conscious foundation of a semi-functional state with inefficient institutions,
including the public administration and the tax authorities.
As a consequence, the Italian national state was delegitimized from day one by
the church and by its citizens, who, due to a lack of respect for the new state and its
institutions, tried to get the better of it by evading taxes and undermining laws and
regulations wherever possible. This was regarded as a trivial offense often indirectly and
sometimes directly encouraged by religious authorities and intellectuals. In turn, the
young Italian nation state developed a deep mistrust of its own citizens. It created a web
of laws and regulations that tried to regulate every tiny issue without ever being fully
applied to the letter, leaving lots of space four interpretations and exceptions for the
sake of keeping up liberalism and the Catholic core principle of forgiveness. Up to the
present day, Italian laws offer many possibilities to interpret and apply them, and there
are many options to appeal decisions. This maintains a low level of trust in the country’s
laws, and of the certainty of sanction for breaking them, a fact that scares off investors,
innovators and entrepreneurs.
The resulting effect is a lasting contradiction between the intrusion of the state
into citizens’ lives on the one hand, accompanied by a lack of application of laws and
regulations on the other, combined with all too many possibilities to repeal the
application of sanctions. In 2013, Italian state authorities lost a record 70% of cases in
court against their citizens (RAI News 24, 2013). That means that the nation has an
extremely liberal law and court system, inefficient public attorneys, or too many false
accusations against citizens. One recent case that embodied the problem of legal uncertainty,
which is at the core of many other Italian problems, is the murder case involving Amanda
Knox which began in November 2007. The American was found guilty in the first
instance, then innocent in the second, only to be found guilty by another appeal court,
and in the meantime she had left Italy in anticipation of more upheaval (Gumbel, 2014).
The trial goes on after seven years in the courts, with no end in sight. As in many other
cases, predictability of application of the law tends to be low, leaving room for one
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sensational surprise after another due to frequent capovolgimenti (capsizings).
Something similar is true for the popular perception of other publicly visible
highly contested court cases. For example, the captain of the 2012 sunken cruise ship
Costa Concordia, Francesco Schettino, was sentenced to 16 years in jail and to pay
compensation on 11 February 2015 for manslaughter, causing a shipwreck, and abandoning
the ship ahead of its passengers. Schettino, who allegedly caused the death of 32
passengers on 13 January 2012-making the sentence 6 months in jail for every victim-
was called “a reckless idiot” by the public attorney, but defended himself saying that he
had “slipped in a lifeboat and couldn’t get out” (Day and Austin, 2015). The sentence
was pronounced in the Tea t ro M o de r no (Municipal modern theatre) of Grosseto, Tuscany,
not without symbolic connotations, since the trial often resembled a piece of theatre.
Indeed, although the sentence was judged “severe” by international observers, in
the eyes of most Italians it was seen as a theatrical show to justify the existence of “hard
and true” Italian justice in the face of both the domestic and international public than as
a representation of a practical sentence. In reality, “Schettino is almost certain to appeal
and under Italian law he has the right to challenge the verdict twice, which could mean
he remains free for years. Judges did not rule him a flight risk or place him under house
arrest” (Day and Austin, 2015).Until a final verdict is found, Italian laws often change
and thus the situation of the accused is unpredictable over time. That is why everybody
appeals everything as much as possible, to get the “benefit of time.” Thus, in the eyes of
the average Italian, Schettino will get through as many revisions and appeals and
counter-appeals as possible for years, and in the end get 8-10 years in prison as a
compromise, of which he may spend a third behind bars and have the rest changed to
house arrest, public service, or even canceled. Few spectators in the Italian public
therefore trust a “formal” judgment or sentence like the one in the Schettino case
anymore, since most of them are not implemented as they were publicly announced.
XVII. A Problem at the Core of Many Others: Exaggerated
Number of Laws, Legal Uncertainty and the Malaise of
the Court System
All these aspects constitute another vicious circle in the history of the Italian
national state up to the present day, destined to lead to a sort of half-hearted and
inconsequent surveillance state. In fact, Italy in 2013 was the democratic nation with the
most telephone surveillance in the Western world (1 million calls) and, statistically, no
single Italian family was spared, an effect of the state’s notorious mistrust of its citizens,
and vice versa, combined with legal uncertainty.
In fact, legal uncertainty remains a serious problem in Il bel pease. Italy’s density
of laws combines with the longest lawsuits in court in Europe. Italian lawsuits take up to
seven years for an ordinary civil trial, positioning the Italian courts among the slowest of
the top industrial nations (Zampano, 2014). The jungle of laws and regulations thus
ensures that an average trial lasts four to five times the European average; that many
cases remain in court even for decades because of the many options of appeal and
counter-appeal; and that bureaucracy is working extremely slowly and non-transparently,
Matteo Renzi
s Italy
so it is almost impossible for the average citizen to understand its complexity.
Or as Josè Maria Magone put it: “In Italy, the public administration is still today
quite opaque and inefficient … One of the factors leading to this situation is the fact that
the whole bureaucratic procedure is too complex. One source of the complexity of the
process is the astronomical number of laws that exist in Italy. The estimation is that Italy
has produced over 150,000 laws in the past four decades in comparison to 7,325 in
Germany and 5,587 in France The (administrative) working force is low-paid and
unsatisfied … An important thesis seems to be the fact that the civil service is dominated
by graduates from the South. In the early 1990s, over 70 percent of civil servants
originated from the South, leading to the phenomenon of a ‘Southernization of the
public administration.’ This process has been happening steadily over the past century”
(Magone, 2003).
While “Southernization” is no fault in itself, it points to the combination of low
pay with low motivation and low quality of education.
Without doubt, Renzi’s core issue of “simplification” is appropriate and of core
relevance when it comes to the Italian legal and juridical system. Indeed, the problem is
that there are far too many over-complicated, too shortlived and too contradictory laws
to make the system work. The president of the Chamber of lawyers of Rovereto in
Northern Italy, Mauro Bondi, on the occasion of the opening ceremony of the “Court
year 2015,” described the situation in harsh words:
“In the times of Emperor Justinian (527-565), the legal system was chaotic. In
2015 it is out of control. Permanent changes and a legislative process based on emergency
and incompetency have made Italy a country in which the legal system offers no service
anymore. Those responsible for this are neither the judges nor the lawyers. These are,
like every other citizen, victims of a system that is running riot” (Dolomiten, 2015).
His colleague Carlo Maria Grillo, president of the Higher Regional Court of Trento,
adds: “There are far too many legal measures without a unifying concept. We must stop
the over-opulent legislation and are in need of a deep-reaching structural reform of the
courts. In Italy, we don’t have any certainty about the execution of a sentence anymore.
Tod ay it can h appen t hat a dan ge rou s c rim in al, wh o behav es inco nspicu ously- and no t
even exemplarily-in prison spends only a third of their sentence in jail” (Dolomiten, 2015).
This includes members of the Mafia, some of whom are said to continue their
business behind bars with relative ease due to widespread corruption. The number of
inmates in Italian prisons has gradually fallen, from 70,000 in 2010 to 62,536 in 2013
and 53,623 in 2014, mainly as a result of the government’s efforts to find alternative
methods of punishment to ease the heavily overpopulated prisons.
As a consequence, new Italian president Sergio Mattarella asserted in February
2015 on the occasion of the opening of the Florence-based Higher School of Public
Justice (Scuola superiore della magistratura) that “a public attorney must not be a star
nor just an administrator of justice. Italy needs legal certainty, and the lawsuits in court
must be much faster. To put it in one sentence, we need a more rapid and efficient legal
system. This is a crucial aspect that is very strongly felt in the nation” (Rizzardi, 2015).
Summarizing, Josef Anton Kosta, director of Northern Italy’s most successful
“Bank of the year 2014,” the Raiffeisenbank Brunico-Bruneck, put it as follows:The
fundamental problem that is imposing a brake on Italy’s recovery is uncertainty, most of
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all legal uncertainty. Nothing can be really planned. The framework doesn’t fit anymore-
from bureaucracy to the taxation system. Many Italian firms invest in foreign countries,
and foreigners don’t invest in Italy. The emergency measures that have been undertaken
so far, together with growth in foreign countries, can have the effect that in 2015 there
will be slight growth in Italy again. But in the long term, reforms must ensure that
Italian state and society change in order to get the nation into a sustainable forward
movement again” (Südtiroler Wirtschaftszeitung, 2015).
The way Kosta framed “reforms,” not as a fact of the present but rather as a
future challenge, shows that most finance, economic and business leaders in Italy don’t
believe that Renzi’s government has even started serious reform efforts yet.
XVIII. A Culture of Unsystematic Change
What Kosta describes as the origin of uncertainty are the all-too-rapid changes in
every single sector of the country and the continuous reform of reforms. They are the
product of a bloated administration that keeps itself busy by constantly changing
regulations or producing new rules in a manner that the populist leader of the opposition
party “Five star movement” Beppe Grillo put it, is more appropriate for the (former
Southern) Kingdom of the Two Sicilies (1816-1860) than a modern post-industrial nation.
Continuous changes are to a certain extent not only administrative habit, but part
of the country’s greater culture. For example, in Italian soccer, managers are allowed 5-
10 poor games before they are dismissed, thus rarely allowing a manager to develop a
new and improved system or “reform” a team to maturity (BBC, 2014). Italian laws
often function the same way.
In addition, this “culture of unsystematic change” combined with a lack of long-
term overall vision is used to change regulations retroactively-a move that in principle
should be avoided because it undermines the credibility of rules.
Nevertheless, it remains a daily practice in Italy. This ensures not only that reforms
almost never have the necessary time to reach a level of maturation that enables them to
be efficient and reach their original goals, but that reforms in many cases, mirroring the
fast-changing majority-minority constellations in parliament and in the institutions, are
countermanded or even cancelled shortly after their installment, depending on the party
which made them and on that which succeeds it in power. While some reforms are left
in place but often, as a political countermeasure or compromise, “accompanied” by
rules and laws that contradict them, others are cancelled as soon as a new government is
elected. Will the same happen with Renzi’s envisaged reforms? According to the
premier, the new electoral law of January 2015 should help put an end to this situation.
Be that as it may, the background to this situation in Italy’s political and social
culture is more complicated, but builds on the same interrelation between “weak state”
and catholic forgiveness. In most countries there are only two options based on the rule
of law: legal or illegal. In Italy, characteristic of the Machiavellian political culture of
the country, there is a third option: illicit (illecito). Neither legal nor illegal, it is something
in between, a grey zone of “not allowed, but neither completely forbidden.” Second,
Italy is predominately catholic,: which means that almost anything can be forgiven,
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s Italy
creating a great temptation to commit at least something “illicit, but not illegal.”
All this gives rise to another fact, that nowadays few serious international
political commentators risk writing on Italy, since what is written today could have
changed even before the article is published. The absence of Italy from international
political analysis is not simply due to its decline in reputation, but more so because of
its political culture.
XIX. An Effect of Italy’s Unsolved Systemic Problems:
Growing Separatist Movements
These factors, combined with record debt of 129% of GDP in 2014 (which has
continued to increase despite, or as many say because of, EU-imposed austerity
measures), and inflexible labor laws due to the exaggerated influence of trade and labor
unions on party and institutional politics, ensured that the country was the worst-hit of
Europe’s big economies by the crises of 2007-14; and Italy still isn’t recovering as well
as hoped.
Most importantly, in addition to enterprises leaving, movements that push for
political separation from Rome are growing stronger by the day. In October 2014, a poll
by the Institute Demos and Pi showed 67 percent of Italians were in favor of
independence of their region from the state. Among them were, surprisingly, 45 percent
of the workers who traditionally clung to the integrity of the national state (Demos and
Pi, 2014). Among the parties in favor of splitting Italy up are the Lega Nord, which
proposes splitting Italy into two different nations: the rich and productive North-often
depicted as the most productive and economically strong region of Continental Europe-
and the poor and stagnant, crime-ridden South. Comedian Beppe Grillo’s populist 5 Star
Movement wants to restore the three-nation status that existed before Italys national
unification in 1861, i.e.
1) the “Two Sicilies” area south of Rome,
2) an intermediate state around Rome; and
3) the unified territories north of Rome.
In 2015, regional separatist movements grew in never before seen strength and
numbers. For example, the autonomy movement of Venice province, which won over
80% approval to split from Italy and form an independent Northern state in the Po
Valley in an unofficial vote organized by citizen platforms in early autumn of 2014.
Since football is the Italian national sport, expressing best the soul and mood of
the nation, the situation of the state as challenged by separatist movements could be
experienced in condensed form at the Italian Football Cup final in Rome in May 2014, a
game which Renzi attended. On this occasion, the Italian anthem was booed by the
public (mostly fans of the Naples team) and chaos reigned, with an infamous Naples
“fan” called Genny a’ Carogna (Genny the Scumbag), a convicted criminal, causing the
temporary suspension of the game as he called for the release of Catania club fan
Antonino Speziale, who was jailed for the 2007 manslaughter of a police officer.
Observers spoke of a mirror of Italy’s inner confusion, weakness of institutions and lack
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of national self-esteem (ANSA, 2014). But despite the fact that Scotland and Catalonia
made it clear with a close vote that separation can become a serious option even in the
progressive nations of Europe, the Italian public sphere has tended to remove this threat
from the public debate and prefers to discuss whether the national dish, pizza, is from
Naples or Brindisi, or how spaghetti can be saved from globalization.
XX. Renzi’s Reaction: Reform Rhetoric
According to his own statements, Renzi seems to be well aware of these unfortunate
mechanisms at the root of most of the nation’s problems and is trying to break their
vicious circles. As a consequence, building on his “simplification” slogan, Renzi says:
“Italy needs reforms, and it needs them as fast as possible and as simple as possible. My
task is to realize one big, basic reform to make the government and the institutions
leaner, more efficient and transparent and so doing to turn the tide (Renzi, 2015). But
the difference between announcements and facts could once again be, as with so many
of Renzi’s predecessors, too accentuated for “fast and simple” progress.
Nevertheless, Renzi’s rhetoric comes at a favorable time. After Mario Monti’s
“rescue” of the country from November 2011 to April 2013, not through the announced
reforms but mainly by further increasing taxes to all-time record levels, and by the
unconstitutional cut of the budgets of the autonomous regions, things in the eyes of
many Italians can only get better. “Italy can’t afford to waste the huge sacrifices made in
the past years under Monti by again increasing its huge deficit. We can’t allow the loss
of what we have achieved with so much pain during the past years,” the minister of
economy Pier Carlo Padoan stated in March 2014, shortly after Renzi took power
(Ferrieri, 2014).
In the first quarter of 2015, after three years of recession in which the economy
shrank and people suffered under austerity measures, Italy gave a brief, positive signal
by growing 0.5-0.8%. Nevertheless, if Renzi considers such “change,” together with the
new electoral law and the imminent reform of the Italian parliament, as sufficient to call
his time in leadership the end of the second and the beginning of the third Italian
republic (Jones, 2012), it would certainly be an audacious assertion for a man who until
recently has lived by promises than by facts. After all, this is a man who was both
praised and scolded by the EU for his announcements rather than his deeds, and who
therefore resembled the early Nobel Peace Prize winning U.S. President Barack Obama.
Ironically, it was Obama’s visit to Italy in March 2014 that brought the declining
political importance of the eight-largest economy in the world to the fore. Following the
unremarkable visit, many said the most important thing Obama seemed to show on his
homepage were the Pope and the Coliseum, with the gaping absence of political issues.
XXI. From Words to Deeds: What Must be Done?
Four Necessary Steps for Renzi to Take
What must be done now to solve Italy’s biggest problems and get it moving
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s Italy
again? As positive as Renzi’s will to reform is, and as welcome as his intermediate
successes are, there are four still neglected but necessary steps that the premier will have
to take as soon as possible to avoid the stagnation of the very vulnerable beginnings of
political and economic renewal.
First, as previously mentioned, Renzi must introduce reforms that follow the
model implemented by former German Chancellor Gerhard Schröder in 2005, the so-
called “Agenda 2010” (Ottrand, 2013). The situation is similar in the case of Italy’s
neighbor France, where the new premier Manuel Valls (52) of the sister party of the PD,
the leftist Parti Socialiste (PS) took power on March 31 2014. Unlike Germany though,
Renzi and Valls will have to introduce such reforms with an unfortunate 10-year delay.
As is known, in his “Agenda 2010,” the social democrat Schröder reformed the
German social system and the labor market by cutting deep into the social security net
and replacing part of it with employment incentives, as well as by decreasing income
taxes, cutting public spending and arranging moderate wage agreements between
industry and labor unions to increase competitiveness. With this came a weakening of
the trade unions, a task that ironically could only be mastered by a leftist prime minister
against his followers of his own party (Reiermann, 2008).
In fact, the historical paradox is that only a Socialist prime minister like Schröder
was able to weaken fundamental leftist principles, much to the thanks of the conservative
Christian Democratic Union (CDU), which knew that first, these were its own policies,
and second, that Schröder would lose the upcoming election, which he did. A CDU-
conservative prime minister trying to implement Schröder’s reforms would never have
succeeded because of the firm resistance of the left and the then unavoidable solidarity
of the Social Democratic Party with the trade and labor unions. It remains to be seen if
Renzi will share the same destiny: implementing center-right leaning reforms in opposition
to the privileges amassed by the trade and labor unions and the bureaucracy, just to lose
the next elections.
Without doubt, as in the case of the Schröder reforms which secured Germany’s
current economic power, the irony is that in Italy it will once again have to be a
representative of the left like Matteo Renzi to undertake measures that are to all extent
and purposes anti-socialist: cutting the welfare state, keeping wage increases at a
minimum in order to strengthen enterprises, saying farewell to the dream of a 35-hour
working week, simplifying bureaucracy, lowering taxes and labor costs, and enacting a
broad liberalization of the labor market.
Although Schröder’s program was the undisputed basis of Germany’s success
after years as the “sick man of Europe,” critics from the left side of the political
spectrum blamed his “Agenda” for having “ruined German workers” and unjustly
cutting into the wealth of the lower and middle classes. In France, a comparable
accusation against the reform plans of premier Manuel Valls has been made by Jean-Luc
Mélenchon of the leftist party Front de Gauche. Renzi is confronted with similar attacks
by his party colleagues and the Italian left ever since his rise to power, given that despite
his “third way” rhetoric his basic agenda, as well as his standing at the right wing of the
Italian left, positions him close to the position of Schröder. Nevertheless, Renzi is
probably facing more divisions within his own party and a fractured coalition, which
makes the implementation of such deep-cutting reforms more difficult.
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Second, Renzi will have to fix a more general problem often underestimated in
the international analysis of Europe’s path to recovery: that most reform measures
depart from the assumption of getting back to a “healthy” nation of employees,
including workers, who receive a pay check every month and are dependent on the state
or an enterprise 38 hours per week. Most leaders of European welfare states, including
the pro-business Schröder in his time, departed from the assumption that the “normal”
state of things is that the majority of people are employees who ideally want to stay in a
job for 40 years until they get a pension or annual stipend.
But in this traditional European model, all the others, the entrepreneurs and
freelancers for example, are to an extent left out of the overall strategy, or considered
only as a secondary stratum to include. That could have been an acceptable assumption
in times of a broad and stable middle class and of traditional conditions of interdependence
in an industrial society based on the division of labor. The emblematic phrase in Italy’s
Post-WWII constitution reads: “Italy is a democratic republic founded on labor” (L’Italia
è una repubblica democratica, fondata sul lavoro), which analysts like Balistreri
nowadays interpret as an exaggerated a political touch (due to the Post-WWII division
between leftist partisans and the bourgeoisie) of a nation historically afraid of basing its
legitimacy on political ideals like freedom or solidarity. In reality, every system,
including a dictatorship or an aristocracy, can be “based on labor”; this sentence doesn’t
say anything essential about the political form and will of such a nation.
Tod ay, how eve r, th e m iddl e c lass, in cludin g t he r emn an ts o f t he u rban-b ase d
bourgeoisie, has become less stable in Italy as elsewhere, and the labor market is rapidly
changing towards flexibility and life-long learning. People don’t stay in a job for a
lifetime anymore; international activities, invention and individuality are increasing in
importance in the Southern European nations. But this change has not been sufficiently
taken into account by Renzi’s reform predecessors, and it is questionable if Renzi
himself, despite all his innovation rhetoric, is appropriately aware of the importance and
implicit radicalness of this change. On the contrary, it sometimes seems that “post-
modern” Renzi would enact reforms for the 20th century of the late Ford era, not for the
Internet-age, independent of the fact that FIAT as the most important player of the
“classical” heavy industry has left the country.
This represents a major problem for Europe in the medium and long-term
perspective: the general “employee mentality” of whole generations, including part of
the present one, leading to the dream of a majority of the present Italian youth-
particularly from the South-to become a public sector employee. This is because such a
job despite moderately paid is identified with a quiet and safe life, avoiding the risks of
an inventor or entrepreneur. In 2013, 53% of Italian youth aspired to a post in public
administration. In 2014 the figure is still up around 46% (ANSA Economia, 2014). But
this mentality is in reality the negative side of the welfare state, because it leads to a
passive rather than an active society. And all too often European politics is in the service
of this trend rather than furthering invention and free entrepreneurship, as is required in
the present era. Of course, the focus on employees is politically based on the assumption
that this is the most important voter section, an assumption that could soon prove wrong
at the Italian ballot box.
Third, Renzi must fix the biggest structural problem of the nation: he must
Matteo Renzi
s Italy
decrease taxes in order to stimulate the economy and motivate the individual. What
Renzi rightly proposes,: small tax exemptions, tax stagnation and an 80 euro or more
bonus per month for the poorer segments of the population, i.e. employees with incomes
of less than 24,000 Euro per year, is combined with illiberal (and for democracies,
unusual) measures such as Redditometro, a mechanism that foresees every single
acquisition of every citizen is checked against declared yearly income, with a list that
determines what a citizen can afford to buy with that income within a tolerance margin
of 20%. If the tax authorities feel that a citizen spends more than he or she can afford
according to their declared income, a tax evasion suspicion is issued and the citizen
must justify his or her purchases. In Italy, it is not the tax authority that must prove the
guilt of the citizen, but the citizen that has to prove his innocence to the state. This
measure has been branded by Italian conservatives, intellectuals and liberals as “fiscal
terrorism” (Il QuotidianoNazionale, 2012) which inappropriately replaces the need for
tax reform.
The fact that many of Italy’s firms are transferring their centers and a (sometimes
large) part of their production to foreign countries with lower taxation, a more efficient
legal system, less bureaucracy and more meritocracy, should be an alarming signal for
the new government. It should give them the incentive to decrease taxes, favor
liberalization, cut over-protection, and most importantly cut out vested interests and
corruption. Although at the start of his tenure Renzi promised significant tax decreases
as a “shock treatment” for Italy’s economy and society, not many of his promises have
come into practice yet. The fact that Italy seems to emerge only slowly out of recession
may provide once again, as it was for his predecessors, an excuse to not fully implement
his promises, not least due to the fact that public debt continues to rise despite the
austerity measures (Girardi, 2014).
Fourth, and probably most crucial in the medium and long term, Italy needs
more, and more transparent, meritocracy, particularly in the leading sectors of society
such as the political elite, business, universities, science and technology, but also in
general. But meritocracy could continue to remain the biggest problem throughout
Italian society under rottamatore Renzi.
XXII. Two “Secondary But Important” Challenges for the
Southern Peninsula: Illegal Immigration and Anti-
Given the amount of challenges Renzi faces, some issues will have to be put on
the back burner, but they cannot be put off forever. Italy’s “secondary but important”
problems comprise two aspects in particular:
First, the poor regulation of migrants and refugees from south of the Mediterranean
of around 200,000 people per year in 2014, the majority from Africa and the Middle
East. Italy’s programs for integration are largely insufficient. There is a lack of money in
these times of crisis. Southern Italy, where most migrants arrive, is underdeveloped and
thus unprepared for these numbers. And most of those who are not sent back to their
countries of origin-i.e. the vast majority of those who come, which is also an effect of
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the catholic religion and its principle of pity-are left to fend by themselves. Therefore
Italians are increasingly calling for this issue to be addressed.
This is also due to the fact that the majority of immigrants who come over this
dangerous route with the help of smugglers and criminals, risking death in their thousands
every year, come from the poorest and least educated parts of their populations, and thus
are not prepared life in the highly competitive Western society. Improved cooperation
with the European Union is urgently needed in order to avoid strengthening populist
rightist nationalist movements, as happened in France with Marine Le Pen’s Front
National (National Front).
Admittedly, Renzi hasn’t had much time to dedicate to this issue, but he will
have to get to it eventually in order to avoid losing the next election because of the
growing unrest, particularly in Italy’s Southern cities and in Rome. The average Italian
thinks that there has to be a clearer set of rules for immigration, and a better overall
program from Europe-not from Italy alone-to address the question rather than just
leaving it to the Southern states, foremost Italy and Spain, According to the minister of
the interior, Angelino Alfano, Italy spends 300,000 Euro per day on the problem (de
Cesare, 2014).
The issue is even more urgent since reports emerged that among the hundreds of
thousands who come to Italy every year there are potentially one or two dozen members
of radical Islamic groups who are strategically infiltrated assleepers and could later
commit terrorist attacks. After the attacks in Paris on January 8, 2015 against the satiric
journal Charlie Hebdo this potential threat is taken very seriously by the Italian
government, as the Minister of Foreign Affairs, Paolo Gentiloni, stated in the framework
of his visit to London in January 2015 (Il Quotidiano, 2015). After the dramatic appeal
of Egypt and Libya to Italy to intervene with ground troops against the growing
influence of ISIS in Northern Africa in February 2015, the terror militia has repeatedly
threatened Il bel paese with open war on Italian soil and terror attacks. Images on in the
internet showed the Coliseum (Il Colosseo) in Rome under a black ISIS flag and has
forced the Italian government to spend huge amounts for the protection of cultural
heritage sites and public figures such as politicians, business leaders and intellectuals
(Tomasello, 2015).
Second, but of equal importance, Renzi faces separatist movements not only
against the Italian national state, but also against the European project. Two parties of
noticeable influence in the parliament are in favor of Italy leaving the Eurozone and
returning to the former currency Lira: The Lega Nord and the 5 Star Movement. The
party secretary of the Lega Nord, Matteo Salvini, and the charismatic and autocratic
leader of the 5 Star Movement, Beppe Grillo, envisage a popular vote supporting the
exit from the Eurozone, since, as they claim, the Euro currency “has only been
developed and implemented for the financial oligarchies and the unparalleled success of
Germany” (Grillo, 2014). Since both parties together represent a large section of non-PD
Italian voters and will do so probably in the coming years, Renzi has to take this challenge
seriously and undertake counter-measures. For example making better information
available and taking the political offensive in favor of Italy’s adherence to the Eurozone,
and of its further integration into the EU in general.
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s Italy
XXIII. Conclusion and Outlook: What Future for Renzi’s Italy?
In such a complex situation, will Renzi be able to measure up to the huge
expectations he triggered in order to give the country a “positivity and future shock,” as
promised? Will he be able to implement the promised reforms by the end of the
timeframe he himself set, i.e.-by 2018?
The outlook remains mixed for various reasons. Among them is the fact that
Renzi is in a coalition with both Silvio Berlusconi’s Forza Italia and its main competitor,
the conservative Angelino Alfano’s (the Minister of the Interior and Deputy Prime
Minister since April 2013) New Centre-Right Party. Alfano is a former close collaborator
and vice party leader of Berlusconi, which in November 2013 broke up with the former
cavaliere (Berlusconi's honorary title Knight of labor of the republic, the most important
in Italy for achievements for the nation comparable to the title “Sir” in the UK, that he
held since 1977 and was stripped from him in March 2014 due to tax evasion and false
accounting). Both these center-right parties are part of Renzi’s government, but critical
of many of his reform ideas. While arguing constantly with each other, both keep up the
strategic option of reuniting for elections. Both mistrust the way in which Renzi came to
power and the questionable stability of his standing in his party;, and after giving initial
signals to cooperate now often publicly label him a "likeable tax imposer” (Berlusconi),
i.e. someone who did not go far enough in decreasing taxes (RAI News, 2014). Both
these coalition partners feature strong inner currents aiming at future elections, as is all
too typical in Italian politics where in post-WWII history all governments constantly
struggled to make it at least halfway through an electoral term. That will likely be no
different for Renzi.
What will the coming years bring?
First, the destiny of the Italian reform agenda will depend on Renzi’s ability to
both motivate the different wings of his own party into taking a clear stance towards the
envisaged reforms, and at the same time to put public, if not populist, pressure on his
center-right coalition partners to wave through at least part of the reforms and avoid a
costly and uncertain round of elections.
Second, Renzi could be well advised to base his reforms on a broader formal
meta-party coalition of forces, for example by installing a national constitutional assembly
for reform as philosopher-politician Massimo Cacciari (from 2007-2009 Renzi’s PD
party colleague) repeatedly suggested (Cacciari, 2014). This could occur in cooperation
with the representatives of civil society and with all parties and movements represented
in parliament, as well as with the non-parliamentary opposition. Cacciari points to an
opinion widely shared by most Italian intellectuals and political analysts, that Renzi’s
work announces huge and encompassing reforms which due to their size, implications
and potential impact on the country would need a constitutional assembly overseeing
and integrating them into an overall plan and thus legitimizing them more broadly,
instead of, as they are now, single measures implemented on a changing contextual
basis by the premier and his coalition alone. Most observers agree with Cacciari that
there is a lack of a long-term coordinated plan and vision.
Although “leftist” advice like that of Cacciari-is potentially dangerous because it
increases the possibility that the old problem of Italy interfering with the reform agenda
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could arise again, Renzi’s agenda would probably find more favor by broadening its
institutional basis instead of basing success in large parts on politics. More precisely,
basing it on the “politics of agreement” beyond parties and along personal friendship
lines that have proven to be extremely vulnerable, as the example of other OECD
countries such as Chile has shown (Benedikter and Siepmann, 2015).
What is the perspective?
During his farewell ceremony in October 2014, outgoing EU Commission President
Manuel Barroso stated that Europe has overcome “its crisis which was probably the
biggest since the beginning of the European integration process in the 1950s of the last
century . If we look at things in perspective and we think where we were ten years
ago and where we are now, we can say with full rigor and in complete observance of the
truth that today the European Union, at least in the Euro area, is more integrated and
with reinforced competences.
And we have now, through the community method, more ways to tackle crisis,
namely in the Euro zone. Not only in the system of governance in the banking union,
but also in the legislation of financial stability, financial regulation, financial supervision.
And so today, I can say that we are stronger, because we have a more integrated system
of governance, because we have legislation to tackle abuses in the financial markets,
because we have much clearer system of supervision and regulation. So, I think we are
now better prepared than we were before to face a crisis, if a crisis like the ones we have
seen before should come in the future …” (Barroso 2014).
In hearing these words, both appreciation and skepticism is advised. From an
independent viewpoint, one could judge this as calculated optimism, particularly if the
“weak” data of Italy, the Eurozone’s third-largest economy, is taken into account. A
counter-indication against all too rosyan expectation is for example the Italian housing
market, down for the third consecutive year in 2015 with decreases of up to 12%
because of a lack of investors and deteriorating market conditions, according to research
of Bankitalia and ISTAT (Alto Adige, 2015). Not by chance, in his farewell speech
Barroso mentioned the successful reforms in many European countries but didn’t
include Italy among them: “And the reality is, if we want to be honest, … that the
countries that have suffered the most during the financial crisis were precisely those that
have lost in terms of cost competitiveness before the crisis. And now, for instance the
reforms that have been made by Spain, by Ireland, by Portugal, by Greece, are impressive”
(Barroso, 2014).
Similarly, while the president of the Federation of German Industries (BDI),
Ulrich Grillo, in October 2014 at the Business Forum of the German and Italian Industry
Associations in Bolzano-Bozen (South Tyrol), stated that “Europe needs a strong Italy
that improves its pillars for long-term growth” and that “the different taxation systems
in Europe have to be aligned and assimilated in order to create the same prerequisites
for all European citizens” (Assoimprenditori Alto Adige, 2014), many in Italy think this
is the rhetoric of diplomacy more than a concrete option for Renzi to put into lasting and
sustainable practice.
On the other hand, while Italy's prospects may remain bleak, other countries like
Spain and France don’t necessarily face a brighter future. In Renzi’s Italy at least, there
is a widespread awareness among the elite about the need for reforms. In France,
Matteo Renzi
s Italy
meanwhile, there seems to be a lot of complacency and denial, even though its
economic performance is hardly better than Italy’s. In addition, there have been some
undeniably positive steps taken in Renzi’s Italy, like the recent tax agreements with
European non-EU countries. The agreement on the abolition of ‘secret banking’ between
Switzerland and Italy signed on February 23, 2015 in Milan is expected to help Renzi’s
reform goal of financial and fiscal consolidation. As the premier euphorically Tweeted
that day, “it will help to bring back home billions of Euro” (Cerami, 2015) since this
agreement that canceled Switzerland from Italy’s “black list” of countries that didn’t
exchange information on banking accounts foresees that those Italian citizens who hold
money in Switzerland can transfer it back to Italy and pay the usual taxes plus a minor
additional fee and in exchange are exempt from other sanctions. Estimations are that 5
to 6.5 billion Euro will return to the peninsula. In addition, starting from 2017 there will
be an automatic exchange between Switzerland and Italy on bank accounts without the
need for authorities to ask for precise information,-an act that may keep billions more
Euro in Italy. A similar agreement is being stipulated with the Principality of Liechtenstein.
So what can be said in an overall assessment of Italy’s future prospects?
The Vice President of the Chamber of Commerce of Italy’s economically most
successful province, the Autonomous Province of Alto Adige-South Tyrol (Northern
Italy), Ivan Bozzi, put it this way in a letter to the author:
“I fully agree with you; you give an encompassing and complete picture of the
situation. Italy in principle has great potential due to its geopolitical position, its
still outstanding quality of life and its diversity. The prerequisite for recovery
and the advancement into a Post-crisis constellation is though, that the government
carries out reforms and thus creates new surrounding conditions for the economy
and the citizen. The new electoral law will for sure bring more stability, which is
badly needed by the economy and the social processes that depend on it. But
Italy also needs a socio-psychological atmosphere of a new beginning and
imminent change. In order to foster such a mood and to keep it alive, Renzi’s
government must implement both innovations and simplifications mainly in
these sectors: labor market, wage agreements, reduction of the influence of the
public administration and furthering of the private economic sector; tax reduction.
It will also be very important to reform the civil courts; the trials in most cases
take much too long time, and therefore they discourage both domestic and foreign
investors. Italy’s bureaucracy urgently needs an overhaul towards simplification
in order to improve efficiency and to liberate public resources. The number of
laws has to be reduced, because too elevated complexity leads to dysfunction.
Italy needs a turn towards a meritocratic society, an achievement-oriented
society, a performance society. If Renzi implements just a few of these tasks,
research, innovation and productivity would progress. The European Central
Bank has provided many resources in the meantime, but has failed to achieve the
two most important goals: to foster the private economy, in particular the
medium and small sized enterprises, and investment into the Southern peninsula.
Politically, the Renzi government must deal with his own party and its coalition
partners. Together they have the responsibility, to master the economic and
Korea Review of International Studies
social recovery Italy’s in the years ahead-of an Italy that is and will remain a
crucial member of the Eurozone and the European Union” (Bozzi, 2015).
Will this be the case? Will Renzi measure up to the task?
Besides his omnipresent “hope” slogans, one of Renzi’s favorite sayings is: “One
can do, and one can make others do” (Si può fare, e sipuò far fare), a bonmot that was
repeated and ridiculed relentlessly by political comedian Maurizio Crozza on the nation
wide private TV station LA7. Intended by the premier as an invitation to an intermediate
position between employers and employees, with the goal to move the combative Italian
left towards a more conciliatory position and to greater cooperation with the financial
and business sectors, the quote can in reality also be interpreted as an expression of the
country’s unbroken political culture of “slyness.” It is, as Crozza pointed out, not really
an encouraging sign that the nation will change anytime soon.
Overall, Italy’s situation under Matteo Renzi is probably not the fastest changing,
but the most in need of action, and the most insecure and vulnerable, of all the bigger
European nations in need not only of structural or “technical,” but of systemic reform.
Renzi is correct in saying: “Europe is at a crossroads. It must find its direction. If not, it
is lost,” as stated on December 16, 2014 in Rome’s Chamber of Deputies (, 2014).
But this quote is probably even more apt for his own country. Italy is at a
crossroads. If it wants to overcome its crisis, it has to agree to make fundamental
reforms. Renzi has to eventually find new ways for Italy beyond corruption, scandals
and anti-meritocratic mentality. The fact that the EU commissioner for the economy,
Pierre Moscovici, announced in January 2015 that the EU will allow Italy to reduce its
deficit in 2015 by 0.25% rather than by the pre-agreed 0.5%, may help the nation by
giving it more time to introduce the necessary reforms, and to introduce them more
carefully. This measure of “European tolerance” is likely to be tested over the coming
years since a dramatic improvement of the “beautiful country’s” situation does not
appear to be on the horizon. But Europe’s tolerance will not last forever. Italy has no
alternative than to begin to change, and to begin-now.
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... 10 years' delay, by the young prime ministers of Italy (Matteo Renzi) and France (Manuel Valls). Both are representatives of leftist parties and alliances, but de facto have to enact a centre-liberal program out of necessity, sometimes calling it a contemporary neo-European 'Third-Way'-approach (Benedikter, 2016). The PiS provides an example of the opposite: a conservative party that in many ways pursues a clear 'socialist' agenda. ...
... France and the UK (similar to the USA) have seen a strong militarization of their police forces -a development unknown in the CEE area. Finally, the UK and other nations -with the alleged exception of Italy, which claims to have the strongest privacy rights in Europe (Benedikter, 2016) -have expanded their surveillance net by de facto subsequently reducing citizen privacy rights since the 1990s, as the case of Edward Snowden (together with other similar ones) has revealed. Overall, it is high time for both Poland and the European Union to look to the real origins of the crisis, and to work towards respective joint in-depth solutions for the structural problems of the greater CEE area, including insufficiently modernized and adapted economic and financial practices, the poor quality of daily life, forced emigration and crisis psychology. ...
Full-text available
On 13 January 2016, for the first time in its history, the European Union launched an investigation against one of its full member states, Poland. The dispute is about new Polish laws that allegedly disempower the Constitutional Court and the public media, thus breaching EU democracy standards. The dispute reaches far beyond Poland and questions the further perspectives of integration of the Central Eastern European (CEE) states within the EU. At the same time, it is closely connected with the current multidimensional European crisis. This article argues that the EU-Poland dispute is an outcome of the combination of the specific problems of governance in CEE with a superficial institutionalism of the EU. Poland’s governance controversies show that new attention of the EU to its CEE member states is needed, as they were for many years marginalized because of other concerns such as the economic and financial crises since 2007, the threat of a ‘Brexit’ and currently the refugee crisis. In order to salvage the European integration project, it will be crucial for Europe’s credibility to support the CEE countries to reform their socio-economic systems. At the same time, the case of Poland offers a chance for a debate about how the EU can cooperate more effectively and in extended manners.
Full-text available
Italy is currently the democratic world's most underestimated European ally. Many commentators seem to have forgotten that despite its notorious institutional and debt problems the country remains one of the richest and most technologically innovative Western nations. While its politics are often theatric and superficial, its labour market inflexible and its bureaucracy opaque, Italy's real economic basis remains one of the strongest in the world. The continuing paradoxy of systemic failure and coeval structural productivity characteristic for modern Italy originates in the very foundation process of the nation in the 1860s. It is thus deeply rooted in the socio-political culture and is not likely to change anytime soon. However, these challenges might be viewed as good news in times of crisis: Unlike other Western democracies, Italy's economy and civil society are accustomed to functioning amid enduring institutional and political obstacles and crises. Disregarding alarmist voices, the country's outlook remains positive after all: Its systemic weakness is balanced by structural strength. In order to assess the situation of countries more properly in the future, we need a more sophisticated system of indicators that takes into account a greater, more complex picture; and this presupposes a more diverse and multi-polar system of rating agencies.
The economic, political and social situation in Chile shows a country in transition. Some observers anticipate a broad “reboot” of the nation. While Chile is still seen by many as an example of progress in South America and of developmental potential in the global South, it faces a complex political constellation, particularly in the aftermath of the re-election of Michelle Bachelet. Many wonder how social and institutional innovations can be incepted without interrupting the country’s remarkable success over the past decades. This book provides an interdisciplinary analysis of Chile’s situation and perspectives. In particular, it addresses the questions: What is Chile’s real socio-political situation behind the curtains, irrespective of simplifications? What are the nation’s main opportunities and problems? What future strategies will be concretely applicable to improve social balance and mitigate ideological divisions? The result is a provocative examination of a nation in search of identity and its role on the global stage.
If economics is about the allocation of resources, then what is the most precious resource in our new information economy? Certainly not information, for we are drowning in it. No, what we are short of is the attention to make sense of that information. With all the verve and erudition that have established his earlier books as classics, Richard A. Lanham here traces our epochal move from an economy of things and objects to an economy of attention. According to Lanham, the central commodity in our new age of information is not stuff but style, for style is what competes for our attention amidst the din and deluge of new media. In such a world, intellectual property will become more central to the economy than real property, while the arts and letters will grow to be more crucial than engineering, the physical sciences, and indeed economics as conventionally practiced. The new attention economy, therefore, will anoint a new set of moguls in the business world—not the CEOs or fund managers of yesteryear, but new masters of attention with a grounding in the humanities and liberal arts. “I personally find this head-smackingly insightful. Of course! Money may make the world go ‘round, but it’s attention that we increasingly sell, hoard, compete for and fuss over. . . . The real news is that just about all of us—whether we participate in the market as producers or consumers—live increasingly in the attention economy as well.”—Andrew Cassel, Philadelphia Inquirer
Il rottamatore del PD Firenze: Vallecchi
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Marcegaglia: L'Italia ha perso dieci anni per la crescita serve una politica autorevole
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Lavoro: Solo il 46% dei giovani Italiani ambisce als posto fisso, calo del 7%
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Genny the Scumbag' arrested over cup chaos Napoli ultra head involv ed in trouble after Esposito shot
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Can Italy's 'political serial killer' change EU course on austerity?
  • Alvise Armellini
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Conoscere l'Italia. Il formarsi della civilità Italiana attraverso i fatti, le idee, I protagonisti. Il filo di fumo editori
  • Antonio Balistreri
  • Giuseppe
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