Italian General Strike - European Meltdown

Italy's largest union strike in protest against proposed public spending cuts Berlusconi has imposed, but is all this in vain?
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‘Let me ask you something: do people in Britain have any idea what Berlusconi is trying to do here?’ I looked up from my notebook and saw that – apropos of nothing – I was being asked whether the Great British public cared about, or were even aware of, the variety of ways in which Silvio Berlusconi is concentrating political power into his own hands, by a man whose only previous contact with me was ten minutes ago, when he asked to have a look at my copy of La Repubblica. I was sat down on the steps of a church on the edge Piazza Navona in the heart of Rome, watching the latest in a long line of toothless, meandering demos against the Italian prime minister and his crooked gang of power-hoarders, feeling the energy being sapped from me with every second of every interminable speech. His weary, resigned look was only enhanced by the fact he was towering over me, and the powerful back light that the afternoon sun was providing made every sad line on his face all the more obvious. He can’t have been any older than me, but right then he looked like he’d been through two disappointing lifetimes of the same old shit. I explained to him that the popular perception of the Italian Prime Minister was of an typical Italian stereotype: he fucks around; he cheats on his taxes; he’s always making gaffes; he probably likes a bribe or two and as far as we’re concerned is little more than a clown, a buffoon from a provincial backwater who’s one of the mainstays of cheap panel show trash like Mock The Week. He nods an unsurprised nod, and says: ‘How easy is it to get a job in London? I think I’d like to live there for a while. There, or maybe Limerick.’

the stench remains, not least because he once employed a Mafia boss to work at the villa near his home town of Milan

Over a year has passed since this chance encounter with Ricardo, a 27-year-old (now 28, presumably) from Tuscany who had just that April got his degree in Cinema History, and this was not the first or last time someone has talked to me about emigrating. In truth, if you’re an Italian with a bit of brains about you the reasons for staying get fewer by the day. Today there was a national general strike in protest against the Berlusconi government's austerity budget, which has proposed €45.5billion (£40billion) worth of cuts. However while this is today's reason for marching and demonstrating, it's not hitting at the heart of the matter; the fact is that Italy, from the political class downwards is seething with clientelism and corruption. Around the time I met Ricardo, when Berlusconi was trying to force through a law that would make it illegal to report on ongoing trials (and therefore conveniently stop the press from reporting on the trials that involved him and his cronies), Sicilian advertising executive Marcello Dell’Utri, co-founder of the Forza Italia! Party which brought Berlusconi to prominence back in 1994, had a nine-year prison sentence reduced to seven after the Palermo courts found that there wasn’t enough proof to show that he was involved with the Mafia after 1992. This has effectively cleared Berlusconi (legally, at least) of accusations that his rise to political power was sponsored by Cosa Nostra, but the stench remains, not least because he once employed a Mafia boss to work at the villa near his home town of Milan, and that his party won every single Sicilian seat in the 2001 general election. Not only that, but it has been proved that one of his key allies was deeply involved with the Mafia for a large chunk of his life. We’re expected to believe that he cut all his ties before helping his friend gain Premiership of the country.

Then there was the case of Aldo Brancher – a former priest and director of Berlusconi’s financial holding company Fininvest, who was involved in the legendary Tangentopoli (bribesville) scandal which brought down the first Italian Republic – being parachuted into a position as ‘minister for federalism’. Brancher was on trial for suspected banking fraud and the laundering of over €1million, a trial he could avoid for months by invoking the ‘legitimate impediment’ law. The legislation, which Berlusconi has already used himself to avoid two trials in which he is accused of bribery, tax fraud and false accounting, allows ministers who are on trial to say that they are too busy with official duties to attend court. It is of course entirely a coincidence that the statute of limitations was halved to seven and a half years for white collar crimes by the prime minister during his first stint in power, and that Italy’s judicial process is so notoriously slow – because prosecutors don’t have discretion over which crimes to pursue, so have to go after even the most minor of infringements – that it is possible to stall proceedings until they are ‘timed out’. The kicker in this tale was the fact that Umberto Bossi, the vicious, racist leader of the Lega Nord and key government coalition partner, was already minister for federalism, so Brancher’s job title was immediately changed to ‘minister for decentralisation’. Massimo Donadi of Italia dei Valori (anti-corruption party Italy of Values) handily summed up the situation thus: ‘There are two ways to escape justice in Italy: either become a fugitive or win a seat in the Berlusconi government.’ Currently Silvio is involved in yet another scandal involving his crotch, apparently being blackmailed by the wealthy businessman Gianpaolo Tarantini, the man who allegedly supplied the government with the prostitutes for their 'bunga bunga' parties. Up until a couple of months ago he was being paid €20,000 a month, with a final pay-off of half a million, money paid to keep him quiet. Silvio's excuse? That he was just helping out a friend in financial difficulty. This is the country in which I live. A country that finds itself on the brink of financial meltdown, which frankly makes Berlusconi's outrageous indiscretions look like small beer.

the Euro has taken away the country's biggest weapon in keeping itself afloat: the ability to artificially inflate and deflate its currency

On Sunday German Chancellor Angela Mirkel compared Italy's parlous financial state with Greece, and the European Central Bank has warned Italy that it won't keep buying the government issued bonds, an action that has kept yields down and stopped borrowing costs from rising so high that they drag the country to default. It seems absolutely incredible that the Eurozone's third largest economy could collapse, but that's what it's in danger of doing; why? Because the serious structural problems that Italy has been carrying since the end of the Second World War have never been addressed, and the Euro has taken away the country's biggest weapon in keeping itself afloat: the ability to artificially inflate and deflate its currency. In the past, whenever Italy looked to be in trouble, the government had the option of simply deflating the value of the Lira, encouraging exports and tourism. With this catch-all solution to economic crisis, it was easy to avoid the gaping holes in the economy, holes that now have to be plugged. It's these holes that are now causing Berlusconi's government some serious problems. The proposals so far have come across to many as regressive, and even outright useless: one of the initial ideas in the budget, which has been kicked about by politicians like a football, was to raise taxes by one per cent for everyone earning over €90,000 a year, which sounds like a great idea, until you hear this anecdote: one of my girlfriend's good friends, a freelance translator, earns a high five-figure sum with which she found herself in the top one per cent of Italy's declared (a very important word here) incomes. Not that it mattered anyway, as the government soon upped the sum at which the emergency tax would come in to €200,000, and in Italy, not very many people declare that kind of money to the tax man. Tax evasion in this country is a huge problem, but it should be pointed out that there are two types of evasion: by those who are rich and who can get away with it; and by those who work in the black economy, who would be homeless if they paid up. Part of the problem is that no-one actually appears to know how much tax is paid by different income bands, and that it's incredibly regressive: middle earners like my friend above pay over half their income in tax and national insurance, while another friend of mine, who earns €1,400 a month gross, takes home half of that. My girlfriend, on going to the tax office to sort out her contributions for the year, was met with a confusing question from the accountant: 'why?'

Rosy Bindi, the President of the National Assembly for the centre-left PD (Partito Democratico, or Democratic Party), said that Italy's current government 'is the problem' facing the country, but this is only partly true; Berlusconi and his friends have done serious harm, but the problems run much deeper than that, and the entire political class is culpable. As I said before, corruption poisons the state apparatus, which is slow and inefficient, while Italy's MPs (all 630 of them) and Senators (315) are the best paid in Europe (Not all that long ago they voted unanimously against any pay cut, by the way). There are 8,093 comuni (city or town councils) in Italy, a staggering number when you think that Rome and Milan (populations: 2.76million and 1.32million respectively) and Pedesina, in the north of Lombardy (population: 34; yes, thirty four) have a single comune each. The region of Lombardy has 1,546 comuni alone. The comune does most of the sort of civil functions that you would expect of you local council: registry of births, marriages and deaths, registry of deeds, roads, public transport and what have you, and each one will come with a mayor and a whole staff. The Comune di Pedesina (population: 34, lest we forget) for example, has the following: a mayor; a vice-mayor; four assessori (advisers appointed directly by the mayor); 12 consiglieri (more advisers, for who knows what reason); and a secretary. Assuming that they all live in the village, that's 19 people, potentially the entire adult population of Pedesina working in local government. Now, this is something of an extreme example, and from what I can gather from their website the mayor only appears to work 12 days of the months, so it's clearly a part-time role, but this is the kind of administrative set up that provides extremely fertile territory for nepotism and clientelism; there are hundreds of tiny comuni like this, wasting huge sums of money. In fairness to the government, they initially proposed scrapping all comune with less than 1,500 inhabitants, and amalgamating them, but small-time public officials in poxy little towns up and down the country made a big fuss, and the proposal was declared unconstitutional. The government promised to have another look at it in the future, but there's little doubt it will be put on the back burner and forgotten about, at least for the foreseeable future. This is what Italians mean when they talk about La Casta, pigs at the trough.

All in all 100 squares were occupied by the strikers, the majority of whom are standing behind the banners of CGIL

As I typed this, demonstrators occupied Piazza Navona and the area around the Colosseum. All in all 100 squares were occupied by the strikers, the majority of whom are standing behind the banners of CGIL, the country's largest union. I would be there myself, if the public transport workers weren't on strike, probably being bored by endless speeches by he old men who part of the problem, each claiming to represent the youth. Demos here are much the same, wherever you go: a long march, followed by a succession of speeches. Whistles fill the air and flags are waved. There is a lot of hot air blown, and at the end of the day everyone goes home peacefully. There is no follow up, no threat to those in power, and if anything gets changed it's rarely to do with pressure from the public. Even strikes rarely have any real impact, despite their frequency: transport strikes in Rome, for instance, take place between the morning and evening rush hours, meaning that they hardly inconvenience anyone beyond having to get up a little bit earlier. And in any case, around three quarters of the population drive to work, at least some of the time. While I was preparing this article I was talking to a friend of mine on MSN (yes, some of us still use it); he summed up why these tame demonstrations won't mean a thing unless they stretch beyond the grip of the likes of CGIL: 'For 30 years the unions have been on the side of the political class, rather than the workers. These people are going to demos with music, to dance, to smoke weed... how can they expect to be taken seriously?'

Huge amounts of money is pissed away through bad management and corruption including money funnelled to the country's four Mafias

Meanwhile the government appears to have come to a decision on how to make things right: it's raising VAT from 20 to 21 per cent, cutting the wages of public sector employees who earn more than €90,000 by five per cent (ten per cent for those earning more than €150,000), moving the retirement age of women in the private sector up to 65 (in line with men's) as of 2014, and a three per cent tax increase for those who earn over €300,000 (a whopping 34,000 people, apparently), up until such point that the budget is balanced. When that might be no-one knows yet. For one thing the bill has to go through the senate, which will vote on it today. Then it will have to pass through the chamber of deputies, where Berlusconi has a much slimmer margin; there have already been calls for him to step down to allow a emergency government to sort out the books, but frankly I doubt they have any answers that won't upset the people just as much: the fact is that Italy spent €414,738,000,000 on social security alone in 2008 (according to the latest 2010 figures from Istat, the national statistics office), and over half of that (€212,274,000,000) was spent on pensions for around 16,000,000 people (around a quarter of the population). In a country that is ageing rapidly this is a huge problem, not only for the state but for the elderly, who are drawing an average pension of around €14,000 a year, at a time when the cost of living is beginning to outstrip the money coming in. Here comes the crunch (and some uncomfortable reading for those on the Left, including myself): the worker claims his or her state pension after 40 years of work (or when he reaches 65 or she reaches 60), from which your time at university or doing (the now abolished) national service is deducted. This means that those who start work at 15 years old, and there are plenty of them, can be drawing their pensions from their mid-50s, which is great for your man on the street (and especially when you can carry on working cash-in-hand while you draw it), but when a large part of the population live into their 80s, you have a serious issue on your hands. Berlusconi's government can raise taxes all it wants, but until the system of collection is revised from top to bottom, and vigorously enforced (which would take years; maybe Silvio himself could pour in vast sums of his own personal fortune, eh?), it won't bring in enough on its own – in the short to medium term – to make up the shortfall. While in the UK cutting down on public sector 'waste' is usually the clarion call of the free-market Right to start pushing their private sector buddies into cushy positions, giving 'choice' to people when what they need is a strong, well-organised and well-funded public sector, including the welfare state, in Italy it is a complete necessity. Huge amounts of money is pissed away through bad management and corruption (including money funnelled to the country's four Mafias through public contracts), at all levels of government, while the services available to people simply don't represent value for the huge amount of tax that the low to middle earners are burdened with. It also should go without saying that the ludicrous tax system needs to be completely overhauled, made much easier to understand and more progressive, taking the burden off the poor. The time is now for complete reform of just about every single facet of government, otherwise the world's eighth largest economy will be staring down the barrel of financial catastrophe, and could bring others down with it.

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