Italy: A country in a coma
11 December 2012
In his documentary "Girlfriend in a coma", the former editor of The Economist Bill Emmott analyses the reasons for Italy's insurmountable resistance to the necessary changes and reforms. An attitude it shares with many European countries, it partly explains why Silvio Berlusconi wants to get back in business.
If someone had told me, a dozen years ago, that by now I would be writing and thinking, and even making a film, not about Japan, China or my other old topics but instead about Italy, I might have wondered whether they were smoking illegal substances. But as I think about it now, and as I think too about how crucial will be Italy’s imminent general election, the way I have spent my past several years isn’t surprising at all.
The reason is not just those two infamous words, Silvio and Berlusconi. It is because Italy is central to many of the things that have long worried me about the future of the West.
I first became passionate about Italy because of, yes, Silvio Berlusconi. We at The Economist declared him “unfit to lead Italy”on our cover in April 2001 for reasons of principle, not anything to do with the sort of sex scandals for which he later became notorious in Britain and America.
We were against the capture of the powers of government in a western democracy by a single, huge private interest, and against the erosion by that interest of the rule of law. As Umberto Eco says in my film, we in other countries also have tycoons and concentrated media and powerful lobbies, so this was and still is a danger for Britain, America and many others too.
Resistance to change
That cover began my Italian journey, a journey enlivened by two libel cases from Berlusconi (both of which The Economist won), but then intensified by the knowledge I gradually absorbed about the nature of Italy’s problems, in all their forms – economic, political or moral.
This process was fascinating and often fun, but also had two effects on me: it made me more pessimistic, and it made me even more worried about the sicknesses of the west.
The journey made me gradually more pessimistic because I became steadily more conscious of the huge amount of resistance there is to change and reform in Italy, from interest groups of all kinds. This resistance has been Prime Minister Mario Monti’s biggest problem during the past year.
He thought that if he could persuade such interest groups, be they trade unions or big companies, professional orders or pensioners, that everyone was going to make some concessions and give up some privileges for the common benefit, then they would do so, rather as countries agree during disarmament negotiations to give up their tanks and missiles. But so far this hasn’t worked.
It hasn’t worked because Monti had to depend for his parliamentary support on parties that refused changes in order to please their core voters or just to spite each other. And it hasn’t worked because everyone knew that the Monti government was temporary: just delay and “the night will pass” as the saying goes. Even local governments used this tactic, delaying the implementation of new laws knowing that elections would soon come.
Country in self denial
This made me pessimistic too for a second reason. For years, until the bond-market crisis of 2011 forced the elite to acknowledge Italy’s true economic sickness, I had noticed a strong, very widespread tendency towards denial of reality, to use false or outdated facts to reassure oneself that the country was really strong rather than weak: high household savings (they have actually halved), rich families (try selling the house that underpins that "wealth", strong manufacturing (only one-seventh of GDP, and getting less competitive, not more), an innate Italian creativity (yet meritocracy has been destroyed, and the most creative new graduates emigrate to Berlin, London and New York).
The bond-market shock seemed to change this. But did it, really? If interest groups still block reform so fiercely, they presumably think that change is not necessary, after all. In my optimistic moments, I tell myself that they are just playing for time, hoping to be stronger relative to other interest groups after the 2013 elections. Equally, however, they may simply be hoping that something magical will occur to enable change to be avoided: a miracle cure from Mario Draghi at the European Central Bank, or a sudden German decision to pay for debt write-offs by southern European countries, or something else. The truth is still being avoided.
These tendencies, of interest groups hanging on to their entitlements and privileges, and of elites seeking to avoid facing reality, are not unique to Italy. Such problems exist in the rest of the West too. As America waits and watches to see how its Congress deals with “the fiscal cliff”that threatens its economy after January 1, it too is waiting and watching interest groups defending their privileges and elites denying reality.
Asleep to the dangers
The difference with Italy is that this process has been going on for so long – 20 years, in truth – and that meanwhile other economic and social strengths have degenerated. America and Britain are just at the start of this process, and I still hope we can avoid it. But Italy, as in my film’s title, has put itself in a coma.
Will it wake up? The apparent decision by Berlusconi to run for the elections by opposing Monti’s fiscal austerity suggests reality-denial remains strong at least on the right. The election is going to be a crucial, perhaps even historic test. A test of whether political parties, and the interest groups that support them, truly understand the nature of Italy’s problems and realise that continuing old policies is not an option. A test of whether the demand of voters for new ideas, new accountability and even new faces will be met. And, for the West, it will be a test of whether our faith in democracies’ability eventually to correct mistakes is justified.
Prime Minister Monti is right to resign and to bring that test closer. It is not a test that can or should be delayed any longer.