April 13, 2006
As Italy debates the closest election in its history, the fundamental need to reform remains the essential priority, specifically the need for structural reform and greater deregulation that will increase Italy's competitiveness and boost economic growth. In certain ways the current contest is a repeat of the 1996 election, which featured the same two candidates, Romano Prodi and Silvio Berlusconi, discussing similar issues and problems, many of which remain largely unresolved today. Change in Italy, particularly economic and political, has been and will be hard to come by.
To a large extent the current election amounted to a referendum on Italy's economic performance under Berlusconi's five-year stewardship as Prime Minister, the longest in Italy's post-war history. Sluggish economic growth in recent years has ranged from 0% to less than 1.5%. However, the election's outcome clearly manifests the deep level of polarization within Italian society beyond the political realm that may be attributable to different factors, including historical reasons and the struggle of Italy and rest of Europe to adapt to an increasingly globalized world.
Despite the significant ideological differences within each political coalition, the primary motivating factor uniting each side was strong antipathy towards the opposition. For the left, it was principally the persona of Berlusconi, the only figure also able to unite disparate forces on the right. As its leader, he attracted a large number of direct votes. However, of the various reasons uniting the broader center-right coalition, it was the underlying fear and deep-seated suspicions and distrust of a left-wing agenda controlled and/or influenced by a coterie of radicals. A humiliating defeat for Berlusconi may have forced his exit from politics and triggered a race for leadership and a potential realignment on the right. However, defeat by the narrowest of margins and Berlusconi's ability to attract the most votes of any single party in Italy has extended his political survival and claim to leadership of the right.
Although the left technically achieved victory, the narrow margin deprives Prodi of an importantly symbolic popular mandate and political uncertainty will complicate the need for the emergence of a strong government capable of guiding Italy through a desperately-needed economic reform process. The concern for moderates in the center-left and a recurrent accusation by the right is that the far-left will hold the government hostage to reform and force the removal of Prodi as occurred in 1998. However, the desire for political self-preservation and survival combined with the fear of failure and a return of Berlusconi may serve as important catalysts to press ahead with reforms, but through a slow, divisive and continuously litigious process with the aim of gradually achieving long-term results. Without controlling the largest party in the ruling center-left coalition, Prodi's long-term survival as leader remains tenuous and uncertain.
Should more radical elements in the left resistant to reform prevail resulting in paralysis, one cannot exclude the possible emergence of a grand coalition of the center with the sole purpose of implementing an economic reform agenda. Considering the existing political polarization in Italy, it would be difficult to achieve a grand coalition, although not impossible. Although such a scenario may not materialize in the immediate future, gridlock and eventual crisis could quickly change that. Neither Prodi nor Berlusconi would likely head such a coalition, due principally to deep-seated personal animosities, the polarizing nature of both personalities and the wider public rift. A highly respected apolitical technocrat would be the most likely candidate. A possible alternative to political gridlock would be another time-consuming and divisive election which would unlikely change much in the short-term and could contribute to further uncertainty with significant economic and political consequences, both domestically and internationally.
As the most challenged of Europe's major economies, Italy appears to many outsiders as a nation in denial of its economic realities. In a campaign marred by personal attacks and theatrics, none of the candidates devoted substantive time or provided reliable details on how to tackle these issues for fear of a negative public reaction threatening electoral prospects. Some may conclude that Italians are not a receptive audience willing to listen or accept the inevitable demands necessary to overhaul the economy. However, historically Italians have proven resilient at adapting to difficult circumstances. Although few will disagree on the need for economic reform, reaching a consensus on how to achieve it remains the fundamental challenge.
To a large extent, the difficulty appears to be the lack of credible leadership across the political spectrum, in Italy and throughout much of the European Union, to communicate objectively and effectively the realities and challenges of globalization, how and why they will impact daily life, the sacrifices and adjustments required to secure and amend certain existing benefits and the long-term opportunities available for integrating into a more global economy. Such notions may partially explain the rejection of the European Treaty in France and the Netherlands in 2005.
In the corporate realm, many of Italy's largest multinationals have adapted to globalization. However, small and medium size companies, largely responsible for the nation's post-war economic success, are failing or simply unable to compete with cheaper Asian products and labor costs. For a society which has enjoyed generous state benefits and entitlements for many decades, amending or revoking what is considered a public benefit and expectation will be extremely difficult. This engenders not only an economic change but a cultural one in a country, and wider continent, where the centrality and dependence upon the state largely prevails and remains significantly rooted in the political culture. Simply put, reform is inevitable. The longer it takes, the more difficult is the task and the greater the sacrifices required. At present, Italy still has limited time to determine the process and pace of change. However, should resolute action be delayed, crisis mode may materialize in the not too distant future, forcing Italy to change through radical measures by necessity and under more severe circumstances and conditions.
Failure by the political class to connect with ordinary citizens contributes to a growing divide between the governing and governed. Leadership requires the ability to appreciate and relate to the public's needs and understand their grievances. Leadership also requires the ability to instill and inspire a sense of national purpose and convince citizens that reform is a collective need that can only be achieved through a collective effort. Failure to do so results in public disillusionment with the status quo and creates fear and uncertainty in the future. The inability to provide vision or opportunity most tragically strikes the young, the future of every nation, and impacts the pillars of any free society. .
With one of the world's lowest birth rates, Italy is increasingly becoming a nation of pensioners, ruled by pensioners for the sake of pensioners, somewhat of a gerontocracy with little, if any, meritocracy. In Italy, much of the perception of politics is that the purpose of officials is not to serve the public but to take from it, and if and when necessary distribute the spoils to followers and loyalists in order to preserve and extend one's survival. For Italy's young, upward mobility is not a fluid process. Personal connections or the tutelage under a "sponsor" becomes a more secure guarantee to professional and personal success. Some of the best and brightest of Italy's young opt for opportunities abroad to find greater meritocracy and equitable results for hard work. However, perhaps the high voter turnout of nearly 83% may be encouraging that the public is not willing to settle for politics as usual, particularly among the young.
Italy's Foreign Policy
Although the rhetoric surrounding U.S.-Italian relations may alter significantly to reflect a more sober mood with the end of the close personal relationship between Berlusconi and Bush, the core substance of the relationship is unlikely to undergo drastic changes. Although Italy's left uniformly shares an ideological antipathy toward the Bush administration, its more centrist and seasoned diplomatic elements are likely to dominate Italy's foreign policy bringing a more cautious but pragmatic approach. The center-left's ideological affinity with Clinton allowed for a stable working relationship during its reign in the late 1990s, as demonstrated during the Kosovo war when then Italian Prime Minister Massimo D'Alema, a former communist, was an active participant. Obviously, greater efforts will be required in dealing with President Bush. Although diplomatic differences on specific issues will inevitably emerge, a greater appreciation and understanding of the importance of preserving and cultivating the overall relationship should prevail. America's large military presence in Italy since the Second World War, Italy's role in NATO, its active participation in the Balkans and Afghanistan and other numerous factors confirm and strengthen the reality. However, if the left's more fringe elements are allowed to influence Italy's foreign policy the situation could possibly change, though it is unlikely to reach the diplomatic depths that currently exist between the U.S. and the Zapatero government in Spain -- where historically deep-seated anti-Americanism exists even in Spain's mainstream left.
Furthermore, Iraq was a non-issue during the campaign due to a current phased-out withdrawal of Italian troops which Berlusconi began last year, and is unlikely to emerge as a significant issue barring any unpredictable events triggering a potential crisis similar to the Calipari case which involved the shooting of an Italian security agent by U.S. troops, or the Nasariya suicide-bombing which claimed 18 Italian soldiers. However, one cannot exclude the possibility of an accelerated withdrawal from Iraq which would be operationally insignificant but symbolically have considerable diplomatic implications. With respect to Iran, a left-wing Italian government is unlikely to present any problems for the U.S. as it will defer the initiative to the EU-3 (UK , France and Germany), despite significant Italian investments in Iran .
On the European front, however, Italy's role and relationship with the other states of the European Union will change significantly in rhetoric and substance. Whereas Berlusconi joined the UK's Tony Blair to oppose a vision of a more federalist Europe under Franco-German tutelage, a left-wing government will revert to Italy's traditional role of conformity and greater deference to the European Union, particularly with Romano Prodi, a former EU President, leading a new government, and particularly on major issues in transatlantic relations.
Marco Vicenzino is the founder and Executive Director of the Global Strategy Project. He served as Deputy Executive Director of the International Institute for Strategic Studies-US (IISS-US) in Washington, DC, and is an international attorney. He is a graduate of Oxford University and Georgetown University Law Center and has taught International Law at the School of International Service of American University. He can be contacted at msv@globalsp.org
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