Italy's government
Unsteady as she goes
Jan 31st 2008From The Economist print edition
Italy has enough problems already: does it really need Silvio Berlusconi once again?
AP
ITALY is notorious for its perpetually changing governments. Between 1981 and 2007, it had 16 prime ministers, including some repeats, compared with Britain's four. Yet lately Italian politics had acquired a patina of stability. Under pressure from voters, its fissiparous parties had coalesced into recognisable blocks of right and left. The centre-right government of Silvio Berlusconi (pictured right) served a full five-year term; when the media tycoon was defeated at the polls by the centre-left in April 2006, the hope was that Romano Prodi (on the left) would also see out his term. It was not to be.
The upheaval triggered two weeks ago, when a tiny centrist party quit Mr Prodi's coalition, unseated the prime minister when he lost a vote of confidence in the Senate. After consultations, the Italian president this week has asked Franco Marini, speaker of the Senate, to form a short-term interim government. But Mr Berlusconi, hungry for power, is baying for an election as soon as possible. His commanding lead in the opinion polls suggests he would win, and return to Palazzo Chigi just 20 months after he left it (see article).




Everybody agrees that the last thing that Italy needs is another succession of fractious, short-lived governments. It could just about get away with them when growth was strong, and vibrant private enterprise, especially in the north, more than made up for a shoddy (and often corrupt) public sector and the sclerotic Mezzogiorno. More recently, though, Italy's economic prospects have worsened. It is the slowest-growing big economy in Europe; the south is barely moving forward at all. Spain has just overtaken Italy by the measure of GDP per head, say the statisticians. Italy's competitive sparkle has dimmed. And the OECD, a think-tank, finds that it has the most heavily regulated economy in the rich world.
The country, in short, desperately needs both stable government and painful economic reform. The question is how to get these things. In 2001 voters overwhelmingly backed Mr Berlusconi (rejecting this paper's view that his chequered business history made him unfit to lead Italy). But he squandered his opportunity, using up political capital to protect his media interests and fend off judicial cases against him, and dithering over economic reform. After a disastrous term, he left behind his own “poison pill”: a law to change Italy's electoral system back to one based largely on proportional representation. By the time Mr Prodi lost his confidence vote, no fewer than 39 political parties were represented in parliament.
The poison has thus done for Mr Prodi. Ironically, it is also hurting Mr Berlusconi, who finds it increasingly hard to control small parties in his coalition. Both sides agree that electoral reform is needed to strengthen big parties at the expense of little ones. Yet the smalls will resist, making it hard for any interim government to get a new electoral law passed. So the odds are that Italy is heading for a fresh election under the existing system. Mr Berlusconi seems likely to win—although Mr Prodi's successor as centre-left leader, Walter Veltroni, a popular mayor of Rome, may whittle down his lead.
In search of liberalismo
New election rules are needed if stable government is to return. But Italy's deeper problem is that so few of its political leaders are genuinely liberalising reformers. Mr Prodi's government cut public borrowing and improved tax collection, but proved too timid to take on the vested interests that always resist change. It left the public sector mostly unreformed. As the renewed Naples rubbish crisis confirms, it failed utterly to sort out the Mezzogiorno. A younger and more energetic Mr Veltroni might be bolder, but his reform credentials are untested and his grip on any centre-left coalition may prove no firmer than Mr Prodi's.
There is not a glimmer of hope that a returning Mr Berlusconi would prove a better bet than Mr Prodi. Judging by his record, he might be worse, starting by undoing the Prodi government's successful tax-collecting reforms. Mr Berlusconi has made clear that his first priority would again be to protect his own interests, by making it harder to use evidence from wiretapping in court cases. However successful he has been in business, he remains unfit for the job he covets. Poor Italy.