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| Matteo Renzi, Prime Minister of Italy, speaking at a university in October 2015. Photograph: Matteo Renzi a San Giobbe by the Università Ca' Foscari Venezia (License) (Cropped) |
In Italy, the Left-Right dynamic that emerged over the last two decades finally seemed to have broken in favour of the Left. Silvio Berlusconi's powerful populist Centre-Right groupings lost ground at the 2013 elections and have struggled in the polls since - falling below even the anti-establishment party Movimento 5 Stella (M5S).
Meanwhile, polling had put the party of the Centre-Left, Partito Democratico, consistently ahead as the only party with a truly national mandate. Even despite having had three separate leaders since the election, Pierluigi Bersani, Enrico Letta and now Matteo Renzi, the Democratici have remained the only stabilising force in Italy's political mainstream.
Matteo Renzi, as leader of the Democrats, is the centre point for what little stability remains. Yet he has staked it all on winning a controversial constitutional referendum - with opposition to be found in all corners of Italian politics - making the plebiscite a vote of confidence in his continued leadership and job as Prime Minister (Politi, 2016).
If that were not enough, on top of Renzi's struggle to change the political and electoral systems, he also faces a battle with the European Union over the rules regarding how he can tackle Italy's National banking crisis (Sanderson & Alex Barker, 2016) - a crisis which, if it where ever to fully unravel, would dwarf the chaos into which Greece has been plunged.
Italy's major national banks are drained of funds, burdened by impossible debts - €400bn in bad loans - and need recapitalisation. EU rules say, however, that the government cannot buy out the banks of their debt (Guerrera et al, 2016), despite support for the policy from the European Central Bank (Jones, 2016), unless the burden falls first on investors.
But in Italy that is all but impossible. The largest share of the debts now weigh heavily upon its citizens, thanks to retail bond and investment schemes. That state of affairs has already caused tragedies, when problems at regional banks led to suicides after families lost hundreds of thousands in savings (Poggioli, 2016).
To force creditors to take the burden is to invite the collapse of Italy's biggest banks and destroy the lives of and impoverish its people. Renzi has expressed his intention to defy the EU and save Italy's banking sector, to protect particularly the country's ordinary savers.
Renzi's government also has ambitious and extensive welfare plans in the works to help those in poverty. Intended to begin in September, after a significant trial period, a programme would extend support for hundreds of thousands of families with children living in poverty, covering a million people to €320/month (Conte, 2016).
The €750mn/year investment, to be doubled as the programme goes forward is conditional on meeting educational and job searching objectives, to spread the governments aim of increasing 'income inclusion'. But it could make a massive difference for the most vulnerable.
But future action depends upon Renzi and the mandate of the Democrats surviving the referendum, which looks to be taking place in increasingly heated circumstances. Anti-establishment and anti-European sentiment seem to be rising hand in hand. The banking crisis and the intransigence of European institutions is not helping. It's no big surprise then that September's vote is being touted as the next big turning point for the future of European institutions after Greece and Brexit.
In that toxic atmosphere, Renzi has staked his efforts against his own position - not the Prime Minister's first act of brinkmanship as he tries to reorganise Italy, having made a similar move to pass same-sex unions (BBC, 2016). But the move stakes more than just his own career on the vote: Renzi is virtually the last man standing in the Italian political arena.
The Democrats are internally divided (La Repubblica, 2016) and only the anti-establishment, anti-elite and Eurosceptic populists M5S, who sit with UKIP in the European Parliament, have something approaching the national mandate to take over.
Making the matter personal by making it a vote on Renzi as well is a dangerous move, not least in this political climate - as former President Giorgio Napolitano stressed (Politi, 2016). It clouds motivations, particularly when Renzi is the central figurehead of the establishment, pushing through reforms that are each time controversial to some large group - from labour reforms (BBC, 2014) to same-sex unions, to the banking crisis currently unfolding - and likely only to feed anti-establishment populism.
Europe finds itself now, once more, with a crisis on it hands. The only leader with a modicum of a mandate is risking his position and the country's stability each time he tries to push through a reform. And yet even as Renzi takes on that task, he finds himself also pressured by the EU that would force him to act punitively against citizens by nullifying their investment savings.
The institutional rules themselves are in essence intended as pro-market
anti-trust regulations, aimed at preventing state-corporate collusion,
as a bulwark against corruption. For progressives - who want to see an open Europe where all parts
cooperate in mutual support for the common good - to see them deployed
to prevent the state from performing its basic duty to the people is
disappointing.
If Renzi falls, Italy risks falling back into political paralysis, much as Spain has been by its electoral deadlocks. The fact so much has come to rest on the career of one politician should be a disconcerting warning to Europe of the need to find stable ground for all of its member states. Yet at present, Europe institutions seems unwilling or unable to respond positively. Europe's present system of legal authority without sufficient democratic accountability has alienated.
Reform is needed. The need is pressing to argue the case against the flaws of the present system and for the building of a better one. The Democrats were elected in Italy on the slogan 'Bene Comune' - the Common Good. It is long overdue time to start rebuilding Europe under the same words.
References
James Politi's 'Italy’s Matteo Renzi stakes political career on autumn referendum'; in the Financial Times; 5 May 2016.
Rachel Sanderson & Alex Barker's 'Renzi ready to defy Brussels and bail out Italy’s troubled banks'; in the Financial Times; 3 July 2016.
Francesco Guerrera, Jacopo Barigazzi & Silvia Sciorilli Borrelli's 'Europe’s next crisis is Renzi and the banks: A fight in Brussels over the fate of Italy’s troubled financial system is prelude to a long, hot political autumn in Rome'; from Politico; 19 July 2016.
Claire Jones' 'Draghi backs public bailout of Italy’s ailing banks'; from the Financial Times; 21 July 2016.
Sylvia Poggioli's 'After Brexit, Another European Referendum Looms'; from NPR; 4 July 2016.
Valentina Conte's 'Piano contro la povertà: 320 euro al mese per un milione di persone - Il ministero del Lavoro rilancia il Sia, Sostegno per l'inclusione attiva, strumento creato dal governo Letta nel 2013 e ora esteso a tutta Italia, dopo una lunga sperimentazione nelle grandi città. Gli aiuti arriveranno a 180-220 mila famiglie in difficoltà. Le domande dal 2 settembre'; in La Repubblica {in Italian}; 19 July 2016.
'Italian MPs back same-sex unions in vote for Renzi'; on the BBC; 11 May 2016.
'Pd, Bersani replica a Renzi: "Noi abbiamo distrutto l'Ulivo? Ha passato il segno" - Botta e risposta a distanza tra il premier e l'ex segretario dem all'assemblea di Sinistra riformista di San Martino in Campo: "Se lui è la vera sinistra, noi cosa siamo?". Tra i temi trattati anche la legge elettorale: "Penso tutto il peggio possibile dell'Italicum". D'Alema: "Ci sarà il tempo, un momento per replicare"'; in La Repubblica {in Italian}; 12 March 2016.
'Italy trade unions strike over Renzi's labour reforms'; on the BBC; 12 December 2014.
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