Sergio Scalpelli still uses the language of Berlusconi-ism.
People who support the government are not rightwingers, but ”moderates”. And Berlusconi himself — media tycoon and owner of Italy’s most successful football club, AC Milan — did not enter politics 12 years ago; he ”came down on to the field”.
It would be hard indeed to find anyone who better fitted the profile of a core Berlusconi voter than Scalpelli. A Milanese like the prime minister, he has an executive post at Fastweb, which delivers TV, internet and telephony by fibre-optic cable, and lives in the fashionable Brera district. He became a member of Berlusconi’s Forza Italia and was a city councillor for four years.
But when Scalpelli casts his vote in Italy’s general election next week, it will be for the centre-left. ”I was among those who thought the centre-right would give a powerful boost to innovation and liberalisation,” he said. ”But none of the promises has been kept.”
Five years after Scalpelli and his compatriots returned Berlusconi to power, the economy is at a virtual standstill. Last year, output grew by just 0,1%. The biggest annual increase under the present government has been 1,8%.
When Berlusconi clashes with the opposition leader, Romano Prodi, in a second and final TV debate on Monday night, the economy will be centre-stage. The argument is expected to focus on the centre-left’s pledge to slash social security contributions — a move that would both increase take-home pay for employees and reduce employers’ costs.
The aim is to boost the economic health of a country the Economist last year dubbed the ”new Sick Man of Europe”. Ask Tito Boeri, the professor of economics at Milan’s Bocconi University, about the Italian economy’s underlying problems and his first response is ”How much time do you have?”.
Its handicaps include a rapidly ageing population, an unusually small workforce (because few women are employed), an underperforming education system and insufficient spending on research and development.
Italy, moreover, has remained a web of cartels, whose stranglehold on the economy is maintained by bureaucracy, corruption and, often, government subsidy.
”We are in a structural decline,” said Boeri. He estimates the economy’s maximum potential for annual growth has shrunk to ”just over 1%”.
For years — decades, in fact — its inadequacies were masked by devaluation. Whenever Italy’s industries looked uncompetitive, the government of the day would reduce the value of the lira to make Italian goods cheaper abroad thereby conjuring up an export boom. With the euro, that is no longer possible. And since many Italian firms operate in areas such as textiles and footwear with a low technological input, they are exposed to competition from China.
The economy was debilitated before Berlusconi came to power. Many voters were ready to overlook his conflicts of interest and the corruption allegations levelled at him in the hope that he could bring his Midas touch to bear.
”He was someone who had created a great business empire,” said Giorgio Fossa, a former head of Italy’s employers’ association, Confindustria. ”Clearly a lot was expected of him.”
Yet Fossa too will go to the polls a disappointed man. The government, he said, had ”not had the courage to do the things that were necessary”.
Milan bears the imprint of Berlusconi at every turn. It was here that he built his first great project, the giant housing estate Milano 2. It was here he set up his television empire, Mediaset, and it is home to his family’s newspapers, Il Giornale and Il Foglio. Milan is also home to his publishing group, Mondadori, and his insurance firm, Mediolanum. In 2001, his rightwing alliance won 15% more votes than its rivals in Milan. But next week it is unlikely to come close to that result, and polls suggest the underlying cause is the government’s failure to reverse Italy’s economic decline.
”The mistake was to believe that it was simply a temporary problem; that it could be tackled simply with temporary measures,” says Boeri.
No one who has been grounded by an Alitalia strike or queued for an hour to post a letter can doubt that Italy needs greater competition and transparency. Protected by one of Italy’s biggest parliamentary majorities, the Berlusconi government had a unique opportunity to impose the measures — some, no doubt, unpopular — that the economy needed.
But deregulating Italy would have meant taking on powerful vested interests, in the trade unions and the professional bodies particularly, and the government did not have the stomach for a fight. Its only structural reforms have been a pension system shake-up that was inherited from the previous, centre-left, government and will not come into effect until 2008; a reform of corporate governance forced on it by the Parmalat scandal, and an overhaul of the employment laws which, while foisting short-term contracts on the young, did nothing to erode the privileges enjoyed by those already in employment.
”It did nothing to tackle the basic rigidity of the Italian labour market,” said Boeri, who notes that Berlusconi has been anything but rightwing in his economic policy approach. One of the paradoxes is that his disillusioned followers are looking to a centre-left government to do what he did not.
Polls give Prodi an edge of 3,5% to 5%. But he is vulnerable to claims that his budgetary arithmetic does not add up. If he does get in, it is likely to be with a much smaller majority than Berlusconi’s. And his room for manoeuvre will be further restricted by dependence on the votes of a hardline communist party.
”The only thing that makes me optimistic is that I believe Italians do now understand we are in a very critical situation,” said Boeri. ”I hope, whoever governs after the elections, there will be no question of their closing their eyes to the seriousness of the situation. But that is more of a hope than anything else.” – Guardian Unlimited Â