Exit Berlusconi

From the desk of Carlo Stagnaro on Mon, 2006-04-10 21:38

Even though the final results of Italian Parliamentary elections are not yet available, there is little doubt that the center-left coalition Unione has won. The Italians do not want Silvio Berlusconi in power any longer.

It is not certain yet how large the new majority of the Left will be, particularly in the Senate. Because of the change in the electoral law (the Berlusconi administration introduced a shift from a majoritarian to a proportional law with a premium for the winning coalition that is calculated on a national basis for the Chamber, and on a regional basis for the Senate) the Left might end up with a tight majority, or even a minority, of Senators.

Nevertheless the political significance of the elections is pretty clear: Exit Berlusconi.

The reason why Berlusconi has been ousted is plain and simple: Italy’s economic performance, with a level of growth near to zero in the past 5 years, is very poor. Berlusconi was not able to deliver any of the reforms he promised to spur development, the most important ones being substantive tax cuts, liberalizations, and privatizations.

Just a couple of months ago Berlusconi was expected to lose by more than 10 percent. However, he succeeded in significantly reducing the loss by creating the perception that the Left would increase taxes. This tells an important thing: in Italy there is a somehow “free market oriented” constituency that believes less taxes, as well as less public expenditure, is good for the economy. It was these who enabled Berlusconi’s center-right Casa della Libertà (House of Liberties) to gain the majority in 2001; and it is these who, by not voting Berlusconi or by shifting their votes leftward to the center parties Margherita and Rosa nel Pugno, fired Berlusconi, in spite of his last-minute recovery.

If he can rely on a majority in both Chambers when he is appointed Prime Minister, Romano Prodi will face serious challenges. The first challenge is that of survival: the center-left coalition comprises two openly Communist parties and a Green party as well as more market oriented parties such as Margherita and Rosa nel Pugno. The major leftist party, i.e. the Democratic Left Party, still includes some who believe in a form of central planning and some who believe that the free market works. The second challenge is substantial: will Mr Prodi be able to obtain from his coalition the necessary support to pursue the needed reforms? These reforms range from a reduction of the payroll tax (explicitly mentioned in the electoral platform) to liberalizations in utilities, liberal professions, etc., and they include the flexibility on the labor market that has allowed a strong reduction of the unemployment rate to the historical minimum.

As far as the European Union is concerned, it is reasonable to expect the new administration to pursue a closer dialogue with the Commission and other EU institutions. One may draw two conclusions. On the one hand, it may be good if this implies, as it is hoped, a stronger will to achieve liberalizations. On the other hand, it may not be so good if this means that a higher level of European centralization will be supported by Italy.

It is too soon to tell which direction Mr Prodi will take. It is nevertheless certain that the Italians have shown a low level of tolerance for those who make bad choices or lack the courage to make reforms. An Italian motto says “a man warned is half saved”. The left has been warned.

To Brigands: what the fat lady is singing (2)

Submitted by George2 on Wed, 2006-04-12 05:55.

Prodi or Berlusconi, it really doesn't matter. The fat lady keeps on singing for the Italians. And the Italians from the north do not like the song. They, like the Flemish, have but one choice in order to survive: go their own way, follow their own culture, work ethic.¨

The political EU is joke, completely void of any realism. The sad thing about EU politics is that is even not the voice of its population. French and Italian politics are also a joke, because they lack realism. Here politics do reflect their people's choices whether through voting or mere street blackmail. French and Italian politics reflect their people's inability to change. It corresponds with my experiences 'on the floor'.

To Brigands: what the fat lady is singing

Submitted by George2 on Wed, 2006-04-12 05:40.

The economy of a country is the sum of all economic decisions taken by companies and individuals like all of us. Likewise, a political culture in a democratic system is the sum of the political decisions of individuals (= voting). Changing a political culture is a hard thing to do. Sometimes one sees a drastic swing after an election, only to come back to its previous state with the next selection.

I have been working and living in some European countries. My work is changing people’s minds to work in a different way. The same minds that take economic and political decisions. I have seen that this ability to change differs from country to country. It requires guts to admit that change is needed and that old behaving patterns need to be cast away. It requires flexibility.

The most flexible people I have worked with are the Dutch. As long as you explain to them in a clear and comprehensive way the why and what, the ‘average’ Dutchman/woman knows how to deal with this reality. The ‘average’ Frenchman and Italian ability to do is, is a lot lower (see the recent riots, demonstrations, national deficit, debts etc). Only those companies that have the necessary flexibility, do survive. The same counts on the country level. It takes a lot more than a politician with a big mouth and likewise ego to change a country. It all comes down to its people. And the ‘average’ Italian just does not have it. They do not have the guts and will to accept lower spending through less statism.

Lame ducks

Submitted by cstagnaro on Tue, 2006-04-11 10:25.

Obviously Romano Prodi is a lame duck, relying on a tight majority in the Senate (although the majority is larger in the Chamber). Yet Berlusconi is a lame duck too: despite the recovery, his own party has fallen from 30% to 24% in 2001-2006. He sold a dream (cutting taxes, making Italy freer and delivered nothing. He could succeed in raising votes by just reversing the strategy, i.e. selling the nightmare (which is partly realistic, though) that Prodi would in fact raise taxes. But it is clear that the center-right will have to go through major changes and platform revisions if they want Italy to have a serious alternative on the right next time we will have to vote (which I suspect will be no later than 2 years from now).

It ain't over untill the fat

Submitted by Brigands on Tue, 2006-04-11 08:39.

It ain't over untill the fat lady has sung.
A 0.1% marging of victory is nothing..we'll have to wait on what's left to count. I doubt a 0.1% difference is sufficient to say the Italians want Berlusconi to exit the Big Brother house...euhm the Italian Government.

What's the fat lady singing, george2?

Fat lady2

Submitted by George2 on Mon, 2006-04-10 23:06.

The fat lady has been singing since a long time ... for Italy.

Financial crisis hits Italy

Submitted by Chris Gillibrand on Mon, 2006-04-10 23:06.

....even before Prodi's (now disappearing) victory.

This morning he went into a cafe and offered everyone a cup of coffee and being a "good" socialist then found that he did not have enough money in his wallet.

I once heard him talk about the failing EU Lisbon Process.  He asserted no less than four times that it is not an academic exercise.  He himself is a former academic.

 

No future for prodi government

Submitted by Deepdiver on Tue, 2006-04-11 09:08.

I wouldn't agree entirely that the Italians wanted Berlusconi out. The final majority for the Unione was of less than 0.1% in the lower chamber, and the Casa delle Liberta' actually won a majority in the senate.

Prodi is a lame duck - he simply cannot govern effectively with this result. After the left pulled out all the stops it's evident that half the italian population did not buy their story. I bet that after a period of unstable gov't the italians will re-elect the centre-right.

I banged out a post giving some views just after the results came out. Whoever is inter4sted may find it here: http://www.gardjola.org/#Cliffhangers_and_Damp_Squibs

too hasty

Submitted by rudi on Mon, 2006-04-10 22:54.

also Carlo Stagnaro...
Take it somewhat more relax, dude!

Indeed

Submitted by Peter Fleming on Mon, 2006-04-10 22:18.

the latest results predict a majority for Berlusconi in both houses of parliament

this looks like another 2004 US election: the polls were wrong and some media were too hasty do declare the end of the incumbent

Fat lady

Submitted by Bob Doney on Mon, 2006-04-10 21:54.

Nevertheless the political significance of the elections is pretty clear: Exit Berlusconi.

The fat lady, apparently, has not yet sung.

Bob Doney