Thursday, August 05, 2004

Everything is fine, milady

“Tutto va ben, madama la marchesa” goes the refrain of an old song. The house is burning, the treasures stolen but the faithful retainer reassures his mistress that everything is fine. It’s a boulevardier’s song and able crooner that he is, Silvio Berlusconi no doubt knows it well. As Parliament finally closed shop for the summer recess, the Prime Minister gave his rendering when he declared that “We are finishing the season very well; we’re completing the reform cycle and with the budget, in practice, we’ll have completed the picture”.

Well, up to a point.

Last week there was a fist fight in the Chamber of Deputies where one member needed medication, and an exchange of insults which reduced another to tears. The backdrop was a debate on measures to save the ailing Alitalia; the substance was the longstanding division between the Northern League and other members of the governing coalition. A couple of days earlier the government needed a vote of confidence to push through its pension reform. Less visible but worse than both is that Domenico Siniscalco the new Economics Minister, is showing severe symptoms of the Thomas à Becket syndrome. Becket was the king’s good friend, who was nominated archbishop to keep the church under control. Instead he gave all his loyalty to his new appointment. Siniscalco was never the Prime Minister’s buddy but he was supposed to be a quiet yes-man. Hardly a week into the job and he made it very clear that he cannot support an unbalanced budget; he is proposing overall cuts of € 24 bn.

The proposal, the DPEF, the Economic and Financial Programme Document was passed on Tuesday (3 August) and this is what Mr. Berlusconi was crowing about. The real budget will be discussed over the autumn and usually is not passed until Christmas, often with end of financial year cliffhangers. He has also promised tax cuts in the 2005 budget. “Jam tomorrow, jam yesterday, but no jam today”, how often have we heard that refrain?

There will be serious resistance to welfare cuts from government coalition members as well as the opposition; disability pensions in the south, investment support, payments to city administrations all hurt National Alliance and UDC voters. Even last week’s agreement on extending retirement age to 60 for everyone is being hotly contested by the unions even though most economists have agreed that it is too little too late. There won’t be any savings until 2008 and substantial gains will have to wait even longer.

But the more spectacular fight is over the constitutional reform bill. If passed, there will be a smaller Parliament and from to-day’s perfect bicameralism, the new system will have a lower house for national matters and the “Senate of the Regions” for regional business. More power would be devolved to Italy’s twenty regions and the Prime Minister would be given significantly greater powers. The Northern League has made its approval a condition of staying in the government. The centrist UDC and the opposition are strongly against giving health, welfare, schooling and local policing powers to the regions and do not want to give anyone greater powers and certainly not Silvio Berlusconi. Compared to other systems, the proposed reforms are actually pretty bland; an American state or a Swiss canton have much more power than the reformed Italian region would have. The British Prime Minister is closer to an elected dictator than Berlusconi dares dream of. But in the Italian context, these issues are sensitive. Central government has always been seen as a way of adjusting the north-south economic imbalance and clipping the PM’s power wards off shadows of the real dictatorship under Mussolini.

Far from being an end of term fever as Mr. Berlusconi’s supporters have suggested, the pre-holiday fireworks are a foretaste of a long drawn out autumn campaign: the left once had “lotta continua”, the struggle goes on, now the centre-right has the “verifica continua”, continuous negotiation. This is the political equivalent of an Italian traffic jam. Everyon edges forward testing the nerve of the nearest driver, uncaring that they are worsening everyone’s position (including their own) by winning a few centimetres for themselves.

Mr. Berlusconi has been playing the traffic warden for the last three years and like most figures of supposed authority, has had less than complete control. However, he has managed to see that his own vehicles cleared the jam and now some of the other motorists want to get moving because they know the lights are going to change very soon. Hence the pushing and shoving in the Chamber of Deputies, not even a metaphor for what happens in traffic jams, but the reality of it.

So we can look forward to more threats to bring the government down but even with the serious hiccoughs and bluster of the last ten days, even with Mr. Tremonti’s removal from the Economics Ministry and Mr. Bossi’s formal withdrawal from domestic politics, I still can’t see the government collapsing before the end of the year but the odds on a Spring 2005 election are shortening just a little.

Until then “tutto va ben, signor cavaliere”.

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