Italy – an Eurozone Country in Crisis Part III

By | October 22, 2021

5: Italian politics

The structure of the business community with the many small, self-employed people also has a political side: Self-employed people in most countries are naturally to the right. They are against high taxes and state control and skeptical of certain aspects of modern capitalism, such as globalization, large national and international corporations and immigration. In Italy, they have wanted the state to protect them from competition, have been culturally conservative and supported the Catholic Church.

Until 1992, they therefore joined the moderate Christian Democratic Party (DC) , which was the dominant governing party for decades. Against DC stood Western Europe’s largest Communist Party (PCI), which had the support of the workers and many intellectuals. DC, the Church and the United States wanted to keep these out of government participation and political influence. Italy never got a large liberal conservative party like the Conservatives nor a large social democratic party like the Labor Party. But the dissolution of the Soviet Union around 1990 led to the PCI changing its name and transforming itself into a Social Democratic party in 1991.

In 1992, the court system revealed that DC had for many years accepted bribes from the business community for public assignments, and DC was dissolved . Silvio Berlusconi , who had made a fortune in the construction and insurance industry and was investigated for corruption, filled the void left by DC when he formed Forza Italia (“Heia Italia”) and won the 1994 election.

How could a person who was investigated for corruption and suspected of having obtained his fortune through mafia connections, win? The class and business structure means that very many can never imagine voting for anything other than the center-right (cf. above).

  • He had a program with a broad appeal: tax relief, the fight against bureaucracy and inefficient use of resources and appealed to the Church and Catholics’ view of the family, opposition to the legalization of cohabitation and homosexuality.
  • He pointed to his own success, promised to make Italy rich
  • He appeared as something completely new and as an anti-politician in a country where the contempt for politicians was great.
  • Many Italians believe that all politicians are only looking for their own benefits, and that there was no big difference between Berlusconi and other politicians.
  • He spoke more clearly and communicated in simple language better than his opponents, who spoke like politicians otherwise in an abstract language distant from most people.
  • He used his network of insurance agents to form parties and election campaign groups everywhere, propaganda in his nationwide television channels and his large fortune for a massive poster and advertising campaign.
  • The opponents were a complex coalition with an unclear program.

After 1994, there have been several divisions and new formations in the party system. In 2011, the party system looks like the table here shows.

  • The PDLis Berlusconi’s party. Although he resigned as party leader in 2011, nothing happens against his will there. It is strongest in southern Italy.
  • Lega Nordis strongly against immigration and taxes, for law and order and independence for northern Italy. It was part of Berlusconi’s government until his resignation in 2011.
  • The PD- the Democratic Party – is most similar to our Labor Party, but is more composed of a Catholic and a liberal wing. It is today the largest in the polls.
  • Between the PDL and the PD is Il terzo polo- The Third Pole – which is an alliance between the Christian Democratic UDC, breakaways from the PDL (FLI) and from the PD. To the left of the PD is the “Italy of Values” led by the former head of investigation di Pietro, famous for his many corruption revelations in the 1990s. An SV-like party ( “Left, Ecology and Freedom” ) is expected to enter parliament in 2013.

Opinion polls currently show that the center-right group Il terzo polo would have come to the fore and decided whether there would be a government from the center-right or the center-left if there had been an election today.

6: Berlusconi’s fall

According to TOPSCHOOLSOFLAW, Berlusconi had to resign in November 2011 both as a result of the financial crisis and because his own way of life had undermined the trust of both his own voters, his supporters, the EU and the international financial market. The successor economist Mario Monti basically has confidence.

The government is described as a technocrat government – that is, a government of experts. But it is a democratic government, appointed in accordance with the constitution by the president and with the confidence of parliament. Monti is supported by Berlusconi’s PDL, PD and the center group “The Third Pole”. Monti will only sit as long as the majority supports him, and it is not a given that this support will last until the election in 2013.

Monti has previously marked itself as a centrist and supporter of “social market economy”, which is a free economic market combined with welfare benefits when people lose their jobs, become ill or old. He emphasized the Scandinavian (ie Danish) combination of flexibility and adjustment in the labor market and good welfare benefits. The first measures have been the reintroduction of property taxes, which Berlusconi abolished, increased VAT and luxury taxes and a higher retirement age.

As the next round, he has announced the fight against tax evasion, the removal of privileges and monopolies for various professions to increase competition and lower the prices of various services. He wants reforms that move resources from the elderly to the young and support for the many young unemployed who today depend on the family to survive financially. It is far from certain that he will receive support to carry out such a program.

Facts about Italy

  • Area: approx. 301,000 km 2
  • Population: Approx. 61 million inhabitants (2011)
  • Median age: 43.5 years (divided by population into two equal parts)
  • Annual population growth: 0.4% (in + due to immigration)
  • Fertility: 1.4 children per woman
  • Life expectancy: 81.8 years, K: 72.4; M: 69.4
  • Urbanization rate: 68% of bef. living in cities
  • Gross domestic product(GDP) per capita by purchasing power (PPP): $ 30,500 (2010)
  • GDP value creation: agriculture: 2%; industry 25%, services: 73%
  • GDP employment: agriculture: 4%; industry 31%, services: 65%
  • Market interest rate on long-term government securities, nov. 2011: 7.06%

Italy - an Eurozone Country in Crisis 3