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  • Published in Opinion
flags of Italy and the EU

Crisis at the heart of the EU which would overshadow Brexit. Photo: Shabbir Lakha

Chris Bambery argues that Italian left needs to break with its ways in order to advance

Remember the mantra “too big to fail, too big to fall?” That dates back to 2008 when the great investment banks were tottering on the edge of collapse. Now it is being repeated in ruling circles in regards to Italy. It is, after all, the third biggest economy in the Eurozone.

For a long time economic commentators have been warning that Italy’s banks are tottering on the edge of collapse and that the mountain of government debt is unsustainable.  Added to that is that since Italy joined the Euro and the Eurozone its economy has been flat lining – between 1997 and 2017 its Gross Domestic Product rose by a miserly three percent, worse than Greece.

The European Union has stopped short of taking over its economic affairs to impose full blooded deflation, as it did in Greece, but it has ensured successive Italian governments follow its austerity template and did, in 2011, impose a “technocratic” government led by an unelected ex-Goldman Sachs banker.

The effects of all this have fallen hard on ordinary people. Unemployment in March 2018 was 11 percent, but youth unemployment was 31.7 percent. The regional variations show a yawning gap between the North, traditionally the industrial and financial centre, and the South and the islands where youth unemployment tops 50 percent in Calabria, Campania and Sicily.

Friends and relatives in work bewail pay levels which have been frozen for years, the soaring number of temporary or precarious jobs and having to wait weeks and even months to get paid.

The blame for this is seen to lie with a political class which is seen as self-serving and corrupt to a degree unparalleled in Western Europe, but also with the EU. It is hard to recall, but prior to Italy joining the Euro there were high hopes that Brussels would deal with corruption, rigged budgetary figures and much more. Instead they got Silvio Berlusconi, Premier four times between 1994 and 2011. A media mogul, the Financial Times and Economist turned all their Anglo-Saxon hatred on a man who they saw putting his own economic self-interest before that of Italy’s or the EU’s, and who was mired in scandal. Incredibly he is still around, with his Forza Italia party polling 14 percent as Italy’s fourth largest party.

But the lion’s share of the blame has become firmly attached to Italy’s left, particularly the Democrats who formed the government prior to the general election in March. Berlusconi was shrewd enough to criticise the EU when it suited him, but the Democrats, the main trade union federation, the CGIL, and much of the more radical left formed a fan club for the EU, with the Democrats embracing Brussels austerity, neo-liberal agenda as their own. The Italian left has paid dearly for this, the Democrats above all, but not just them. The love affair with the EU was one reason in the spectacular suicide of Europe’s key radical left party, Rifondazione Comunista, a decade ago.

It is obvious to the dogs on the street that the Euro is the old Deutsche Mark under new colours, and that it’s overvalued, making Italy’s exports too expensive. Traditionally Italian governments devalued the old Lira to make exports cheaper and to drive the economy forward – exports have always been crucial to the post-war Italian economy. Further the European Central Bank and the German government refused to allow the Italian government to bail out their collapsing dogs even though those same dogs knew they would not hesitate to rescue Deutsche Bank if needed.

The outcome of all this has come home to roost in the March elections. The Democrats lost and the victors were MS5 (Five Star), which took 32.68 percent of the vote, and the Lega 17.35 percent.

MS5 is usually described as populist but that does not tell you much. It is a supposedly anti-establishment party which has adopted certain left policies allowing it to scoop up left wing votes in Southern Italy, but also attacking migrants and also espousing free market policies.

The Lega is a rebranding of the old Northern League, which began life 30 years ago attacking Southerners as being work shy, spongers and lazy, and supporting a break away by the North. It has dropped attacks on Southerners and shifted fire to migrants, Muslims and the EU. It is a thoroughly unpleasant right wing party.

Now MS5 and the Lega have agreed to form a coalition, the former having failed in attempts in creating one with the Democrats. The immediate cause for concern is their plan to kick out 500,000 migrants and to shut down facilities for them. The likelihood of them being dumped on the shores of Libya is horrific.

But they also propose higher public spending and lower taxes. MS5 campaigned on the pledge of a guaranteed basic income which was popular, especially in the South. Both have pulled back on previous anti-EU and anti-Euro policies but they are saying they will stand up to Brussels if it tells them they can’t back track on austerity.

Here lies the possibility of a crisis at the heart of the EU which would overshadow Brexit. Italy was always a central pillar of the EU in a way the UK never was. If this new government proceeds with its programme, international investors will start taking their money and running, leaving Italy’s banks and state finances looming on the edge once more. The choice then would be bowing the knee to Brussels or taking measures as the Italian state to stop collapse. That might well mean having to choose whether to keep the Euro or not.

Some might argue that the presence of various technocrats in the new administration will ensure that will never happen, or that “Trasformismo” will weave its spell again, the trick of the Italian elite in taking challenging political forces and recasting them in their own mould. It might.

What to do? In the March elections the radical left did get its act together and got over four percent of the vote. Beyond that many Democrat supporters are deeply unhappy and could be won over by a viable left challenge, plus there are those who voted MS5 because of its basic income promise.

Now the radical left needs to do two things. Firstly, it needs to mobilise to defend migrants and to stop the expulsions. But, secondly, it needs to be hypercritical of the EU and start demanding things which go much further economically than the MS5-Lega proposals in dumping austerity and neo-liberalism. In other words, a real programme for economic growth, jobs and increased living standards.  In addition it needs to break from loyalty to the supposed anti-fascist roots of the Italian Republic, created in 1945 after the defeat of fascism. Corruption and the rule of a self-perpetuating elite flow from its constitution. It needs ripping up with a popular debate launched nationwide to work out the basis for a new Republic. Nothing else will do. It can drive a wedge between those who voted MS5 in particular, but even the Lega, and their leaders.

In other words for the radical left to advance, it needs to break with its past; not easy, but necessary. 

On a wider front this new government in Rome is bad news for Emmanuel Macron in Paris. He is attempting to drive through a programme of EU “reform", in reality greater centralisation, but is already getting a cold shoulder from Angela Merkel in Berlin, faced as she is with the rise of a Eurosceptic right in Germany. Now Italy has a government which cannot back Macron in any way.

Chris Bambery

Chris Bambery

Chris Bambery is an author, political activist and commentator, and a supporter of Rise, the radical left wing coalition in Scotland. His books include A People's History of Scotland and The Second World War: A Marxist Analysis.

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