Allan Massie: Clown prince has nothing to offer austere Italy

The situation in Italy is complicated by 'complicated by the re-emergence of the clown prince Silvio Berlusconi'. Picture: Getty
The situation in Italy is complicated by 'complicated by the re-emergence of the clown prince Silvio Berlusconi'. Picture: Getty
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One of the curiosities of the eurozone crisis is that the British commentators who deplore the austerity imposed on the Mediterranean countries – by the EU Commission, the European Central Bank and Germany – are often the same people who applaud George Osborne’s austerity programme while insisting that it doesn’t go far enough and that he should cut public spending more severely. Make of that what you will.

Mario Monti, the Italian prime minister who will resign once his budget has been passed, when a general election will be held, claims his austerity programme is working because debt has been reduced and Italy can now borrow at reasonable rates. He is supported by the director-general of the Bank of Italy, Fabrizio Saccomanni, who forecasts that Italy will emerge from recession by the end of 2013. Monti may be wrong. Saccomanni may be too optimistic.

On the other hand, it is possible that they may be better judges of Italy’s condition than foreign journalists, one of whom this week trotted out someone from RBS to say that Italy would benefit from leaving the eurozone and re-establishing the lira as its currency. Setting aside the fact that RBS people no longer speak with the authority they once enjoyed, this would be a characteristically British solution since it would result in a sharp devaluation. Whereas German politicians, bankers and industrialists believe that a strong currency and prosperity go together, British ones for most of the last 60 years have regularly sought to escape from economic difficulties by seeking the short-term advantage that a weaker currency may offer.

Monti, installed as what is called a technocratic prime minister, will be happy he has done his job if the elections are favourable – if, that is to say, the centre-left parties secure a parliamentary majority. The situation is complicated by the re-emergence of the clown prince Silvio Berlusconi. Allegedly corrupt, incompetent and self-indulgent as he may be, Berlusconi is still capable of putting on a good show, and thanks to his ownership of television stations and newspapers, has no difficulty in promoting himself and his People of Liberty party. On the other hand, he was prime minister when Italy got into the financial mess from which Monti has been trying to rescue it. He has had years in power without achieving much. It would be a surprise if the majority of Italian voters haven‘t had enough of him.

Italy has been two distinct countries since the fall of fascism. There is official political Italy, which, after the initial idealism of the Christian Democrats faded, engaged in a dance of parties that resulted in a succession of weak governments. Few lasted long, but a change of government rarely meant a change of personnel, only the shift of a few portfolios. This system collapsed in the 1990s, and the past 20 years have been dominated by Berlusconi, whether in or out of office.

The other Italy, hard-working, enterprising and imaginative, went its own way, achieving the “economic miracle”of the Fifties and Sixties. Despite the drag of the economically backward south, where the politicians turned a blind eye to organised crime, the other Italy created one of the strongest and most inventive economies in Europe.

Official figures are to be distrusted everywhere, but nowhere more than in Italy where it has long been common for small and medium-sized businesses to keep two sets of books, one for the taxman, the other for themselves. Youth unemployment is nominally very high, but one wonders how many of the registered unemployed engage in at least part-time work, often in small family businesses. One consequence is that the Italian economy has always been more healthy than official figures suggest. This is almost certainly still true today.

Although turn-out at Italian general elections has usually been good – better than here in the UK – few politicians have been held in high esteem, and few elections have resulted in any significant change in policies. The business of government was to keep things ticking over, and, for 40 years after the war, the one party that was deemed to be generally honest and comparatively free from corruption, was barred from participating in the national government. This was the PCI (Italian Communist Party), which at local or municipal level showed itself unusually competent. Its stronghold, Bologna, was recognised as the best-governed city in Italy. Now the PCI is no more but in Italy the Left has mostly provided better government at local level than the Right.

If the centre-left parties win this election and a majority government can be formed, with the Democratic Party’s new leader, Pier Luigi Bersani, a former communist, as prime minister, and with Monti holding a supervisory brief, Italy will continue on the course of seeking financial stability, and the eurozone countries will breathe more easily.

Defeat for the centre-left would throw everything into confusion. Not only is Berlusconi unpredictable and untrustworthy, a government of the Right would include the Northern League, whose policies are full of self-contradictions.

Berlusconi’s return is not, however, welcomed by all on the Right, and not only because the criminal case in which he is charged with paying for sex with an under-age prostitute is due to come before the courts in the new year. He is backed by Alessandra Mussolini, granddaughter of the fascist dictator, but some of his old followers say his return would be “political suicide” for the Right. Meanwhile Berlusconi’s wild rhetoric – he claims that since he left office all the economic figures have got worse – and the prospect of his return have alarmed the markets, and dismayed self-respecting Italians who have found it an agreeable change to have a prime minister who isn’t a laughing-stock throughout Europe.

The truth is that Italy’s case is not desperate. There is no need for a change of direction. If the present course is maintained, Italy will be out of the woods in a year or 18 months – and austerity relaxed there before that happens here in the UK.