Austerity leads to political gridlock in Italy

On 24-25 February, elections were held in Italy to replace the unelected administration of Mario Monti that had effectively been imposed on Italy by its creditors. Monti’s remit had been to squeeze the Italian people until the pips squeaked with swingeing austerity measures, designed to extract as much wealth from the Italian economy as was humanly possible – and preferably more – for the benefit of the country’s creditors and various interested billionaire speculators.

Monti carried out his instructions to the letter, and no doubt all the fat cats got their cream. However, for Italy his policies were a disaster: “among Italy’s estimated six million companies, businesses of all sizes have been going belly up at the rate of 1,000 a day over the last year, especially among the small and midsize companies that represent the backbone of Italy’s €1.5tr, or $2tr, economy …

“One in two small companies cannot pay its employees on time, according to CGIA di Mestre, a research institute. With layoffs surging, unemployment rose to 11.7 percent in January. Youth unemployment has jumped to 38.7 percent.” (‘On the brink in Italy’ by Liz Alderman, New York Times, 12 March 2013)

Besides all this, Italians have been hit with tax increases, including a highly unpopular property tax on family homes, as well as severe cuts in public services. The result is that “living standards have fallen back to the levels of the 1980s”. (Editorial, New York Times, 28 February 2013)

Austerity measures fail to revitalise the economy

Unsurprisingly, when the leeches of finance have been feasting off the lifeblood of the Italian economy, the patient is no more likely to recover than were those of the sawbones of yore. As the economist Paul Krugman noted:

“For Mr Monti was, in effect, the proconsul installed by Germany to enforce fiscal austerity on an already ailing economy; willingness to pursue austerity without limit is what defines respectability in European policy circles. This would be fine if austerity policies actually worked – but they don’t. And far from seeming either mature or realistic, the advocates of austerity are sounding increasingly petulant and delusional …

“But the confidence fairy was a no-show. Nations imposing harsh austerity suffered deep economic downturns; the harsher the austerity, the deeper the downturn. Indeed, this relationship has been so strong that the International Monetary Fund, in a striking mea culpa, admitted that it had underestimated the damage austerity would inflict.

“Meanwhile, austerity hasn’t even achieved the minimal goal of reducing debt burdens. Instead, countries pursuing harsh austerity have seen the ratio of debt to GDP rise, because the shrinkage in their economies has outpaced any reduction in the rate of borrowing. And because austerity policies haven’t been offset by expansionary policies elsewhere, the European economy as a whole – which never had much of a recovery from the slump of 2008-9 – is back in recession, with unemployment marching ever higher.”(‘Austerity, Italian style’, New York Times, 25 February 2013)

Election gives the Italian public a chance to say ‘Basta’

In these circumstances, it is hardly surprising that, given an electoral opportunity to express their disgust at the way their country is being run, the Italian electorate seized it with both hands.

Almost 57 percent of the vote went to parties who, in words at least, committed themselves to tearing up the austerity agenda.

Which were the parties prepared to do this? First, there was the demagogic Beppe Grillo’s ‘Five Star Movement’, “which took about a quarter of the national vote after campaigning against big business, bankers and infrastructure projects such as a fast-speed train line across northern Italy”. (‘Italy’s bosses rail at political “losers”’ by Rachel Sanderson, Financial Times, 1 March 2013)

Secondly, there was ‘The People of Liberty’, led by the scandal-ridden former conservative prime minister, Silvio Berlusconi, who obtained 21.56 percent of the vote for the Chamber of Deputies (ie, the lower house). Berlusconi, however, was in alliance with other parties standing together as the Centre Right Coalition. The most important of the Berlusconi allies was the notorious, xenophobic Northern League, which obtained 4.08 percent of the vote, and altogether the Centre Right Coalition polled 29.18 percent of votes cast.

Italy’s main social-democratic party, Bersani’s Democratic Party (DP, largely the inheritors of Italy’s former revisionist Communist Party, which dissolved in 1991), obtained the most votes (25.42 percent). The DP was part of the ‘Common Good’ alliance, along with the Left Ecology Freedom party (securing 3.20 percent of the vote) and others, which collectively obtained 29.54 percent of the total vote.

In the context of Italy, however, this is a disgraceful result. Compared to the last elections in 2008, the Democrats had lost some 3.5 million votes – about 30 percent of its supporters. This loss came as a big blow to parasite financiers.

As an editorial in the New York Times noted: “The big losers were centrist supporters of Mr Monti, who came in a dismal fourth, and the centre-left Democratic Party, led by Pier Luigi Bersani, which won only a slim plurality in the lower house and ran a disappointing second in the regionally apportioned Senate. These two blocs were expected to form a coalition government with policies not very different from Mr Monti’s. That would have pleased Europe, but is now impossible.” (27 February 2013)

Since the Democratic Party was not the party in power either at the time of the election, nor at the time that Mr Monti was parachuted in to take over Italy’s government in 2011, the unavoidable explanation for its loss of support is its refusal to take a stand against austerity. It is as much – or rather as little – an opponent of austerity as its Labour party counterpart in this country.

Other ‘left’ Italian parties also fared badly. Rifondazione Comunista and the Party of Italian Communists (PdCI, formed as a split from Rifondazione in 1998) both participated in an alliance called Rivoluzione Civile, which obtained only 2.25 percent of the votes for the Chamber of Deputies and 1.80 percent for the Senate.

The coalition led by a former leader of Rifondazione, Nichi Vendola, who left to establish ‘Left Ecology Freedom’ in 2009, obtained 3.2 percent of the vote, which has given it 11 seats – again, a dismal result in view of the fact that in 2011 the coalition’s constituent parties garnered 10-14 percent of the vote.

Rifondazione itself, however, now finds itself shut out of parliament for the second election in succession, having lost its credibility with the Italian electorate following its participation in the Prodi government elected in 2006. The 41 seats gained by Rifondazione at that time enabled its leader, Fausto Bertinotti, to negotiate for himself the position of leader of the lower house.

However, the price paid for that little bit of ‘power’ was the party’s support for the Prodi government’s anti-people programme. In particular, Rifondazione voted to prolong Italy’s involvement in the imperialist Afghan war, to send troops to Lebanon, and to impose drastic pension cuts on the Italian people – all of which cannot but have shattered many an illusion in the party’s left-wing credentials.

As a result, Rifondazione lost all its 41 seats in the 2008 election, while PdCI, which had also been part of the Prodi government, lost all its 16 seats. The Italian parliament was left bereft of communists for the first time since the end of World War II, and has remained so.

A hung parliament

As the bloc with the largest number of votes, the ‘Common Good’ is, under Italy’s electoral law, awarded extra seats in the lower house (Chamber of Deputies) to ensure its voting strength in that house is brought up to a minimum level of 55 percent. So although the ‘Common Good’ actually won only 123 seats, this number was made up to 340, whereas Berlusconi’s ‘Centre Right Alliance’ was left with 124 seats, and the Five Star Movement with a mere 108 seats.

However, Mario Monti’s result was the biggest disappointment to the financiers, as he did not gain enough seats for it to be worth anybody’s while to forge a post-electoral alliance with his party. He has become an irrelevance.

Since the voting in the lower house is officially rigged to give the party/alliance with the highest number of votes an unassailable majority, what matters in terms of being able to make decisions concerning the governance of the country is the situation in the Senate.

In the Senate, seats are allocated to regions in proportion to the size of their respective populations. However, the party within each region which has the most votes is allocated extra seats from the region’s allocation to bring it up to 55 percent of the region’s voting power. In the Senate itself, however, there is no built-in majority for any party – yet all legislation has to be approved by the Senate as well as the lower house.

The distribution of seats in the Senate has turned out as follows:

[img src=”/images/proletarian/extras/issue53_italyelection1.gif” /]

It is evident that within the Senate the Five Star Movement, for all the modesty of the number of its seats, holds the balance of power, since even if Monti joined forces with either ‘Common Good’ or ‘Centre Right’, the other two could outvote them.

Grillo has been loudly announcing his refusal to ally with any of the ‘old guard’, since part of the demagogic cry on which he obtained as many votes as he did was to suggest that all would be well in Italy if only old politicians were replaced by new, young ones. There are some signs, however, that there are those among the ‘young ones’ who would quite like to enjoy the fruits of office that would be available if only an appropriate alliance were made, which could lead to the Five Star Movement fragmenting into warring factions.

The future

The good news is that the Italian electorate is extremely happy to use its voting power to express its rejection of austerity. The bad news is that there is no sign that people are understanding the causes of that austerity; that it is the capitalist system itself that is to blame.

This is particularly regrettable in a country which not so long ago had a fine communist tradition. This tradition has fallen prey to revisionism and has therefore effectively disappeared. Italy is subjectively ready for a fight, but it seems likely that it is not a fight that can be won with the current levels of political understanding among the masses – to the extent that their voting gives an accurate picture of this.

None of the four leading coalitions even claim to be anti-capitalist. The anti-austerity Five Star Movement and Party of Freedom both hold out patent medicines for curing capitalism of its ills, in Italy at least. Both Grillo and Berlusconi claim that restricting immigration will help in this endeavour.

Grillo proposes scrapping major programmes of public works as an iniquitous burden on taxpayers – ‘forgetting’ that this would involve not only the loss of thousands of jobs, but also the loss of thousands of contracts for his petty-bourgeois businessman constituency. He also targets corruption, bankers, the euro, etc; everything except capitalism itself. In his favour is his opposition to Italy’s participation in the imperialist war in Afghanistan, even if he only opposes it as a waste of money.

Berlusconi, as a true conservative, though perhaps not in a strong position to make a big issue out of corruption, thinks that capitalism can be cured by reducing taxes and the role of the state, ‘forgetting’ that taxes pay not only for services to the working class such as health and education – from which the capitalists indirectly benefit – but also for public works contracts and the like, from which his constituency, big business, benefits directly and to a considerable extent.

Except as an admittedly valuable distraction to the working class, neither Berlusconi nor Grillo meet with the approval of the powers that be, who wish the same austerity policies pursued by Monti to be continued and deepened. The feeling in ruling circles is that there is not a lot of point, at least for the time being, in re-running the election, as the result would probably be even greater losses for the Democratic Party and even greater gains for Grillo.

It can be expected that international financiers will put up interest rates for Italian debt to the point of unsustainability, and then use the panic this engenders to secure an Italian government of its choice, be it by election or by direct appointment, as was the case with Mario Monti. In the meantime, communists in Italy need to redouble their efforts at spreading the understanding that the problem is capitalism itself and in uniting all Marxist Leninists in the country into a single, united party that can start to reclaim the fine communist traditions of the Italian proletariat.