Enrico Letta; Italy’s Prime Minister Designate

These last few days as Enrico Letta became the favourite for prime minister, the question from all but serious political nerds was “Who is Letta? I don’t know anything about him”. That is the point.
President Napolitano made it very clear in his inaugural speech on Monday that the only possible government is a coalition between the centre-left Democratic Party (PD) and the centre-right People of Freedom (PdL). The PD has the majority in the lower house, the Chamber of Deputies but needs an ally in the Senate.

These are two parties that have considered each other as an absolute opposite since their foundation in 2007 (and their predecessors felt the same way). From November 2011 to December last year, they were uneasy bedfellows in the Monti-led grand (technocratic) government. But even there, they sniped at each other and prevented the implementation of policies they didn’t like. Since then, both during and after the February elections, the rhetoric and the substance of their antipathy has gone up many notches.

Hence the appointment of Enrico Letta as one of the few people who has the personal and political qualities that just might be able to put together a working government.

First of all, he is a centrist and a Catholic leaning to the left, not a Marxist or ex-Communist or Socialist. He learnt his politics with the leftish Christian Democrat economist, Beniamino Andreatta and then worked with Romano Prodi. In the PD, he has never been closely associated with a single faction. His thinktank VeDrò has annual get-togethers in which politicians and policymakers from both sides discuss issues in convivial surroundings, discussions which continue throughout the year in Rome.

At 46, he will be the third youngest Italian prime minister if he succeeds and so represents a generational renewal. His family connections also bridge gaps; his uncle Gianni Letta has for long been Silvio Berlusconi’s eminence grise.

As the PD deputy secretary, he is the natural successor of Pierluigi Bersani who stepped down after his multiple failures.

Over the next few days, he will talk to party leaders and draw up a list of cabinet and junior ministers.

The jostling has already begun but will be muted until Friday when Berlusconi gets back from Texas, a guest at the inauguration of the George W. Bush library, because in the PdL it is Berlusconi who has the last word (and usually the first too). He wants the key ministries of Justice, Interior and the Economy. The first is essential to have some influence on his trials, the second to influence public order and antimafia policy and the third to condition taxes and overall policy in order to safeguard his family holding company Mediaset and curry favour with the voters in elections which are not far away.

In the PD the everpresent risk is that once again the choice of ministers will render the internal splits very visible. Today there are many grassroots PD branches which are in open revolt with the party’s centre.

But despite these difficulties, the division of the ministerial spoils is the easy part of Letta’s job. In the old days of the so-called First Republic, there was precise tabulation of the worth of different jobs known as the “Manuale Cencelli”. This little virtual handbook measured ministries in terms of prestige, money and vote control (Foreign Affairs prestige but no money or votes, Post and Telecommunications lots of vote gathering but little prestige or funds, Treasury, Budget or Finance all gave control over funds and some prestige but not a lot of votes). The electoral strength between parties and internal party factions determined which prizes you won. Letta and his staff are no doubt working on a new edition of the Cencelli at the moment.

The real obstacle is the programme. For months PD and PdL have been listing their different policies. For the last week, Berlusconi and his people have been repeating the election promise of abolishing Monti property tax, the IMU and re-imbursing last year’s payment. No matter that he and the PdL approved the tax only a year ago.

The PD and Monti’s Civic Choice (SC) see no way of balancing the budget with the IMU and have said so.

On the other hand, the PD would like to see more stringent conflict of interest and anti-corruption laws, something which is anathema to Berlusconi.

Napolitano’s committee of Ten Wise Men produced an agenda which will probably be the basis of Letta’s programme but their issues were shared between left and right and are hardly compatible.

Finally there is the electoral law reform, an issue that Napolitano has been hammering on for more than five year to no effect. All pay lip service to the idea that the law should be changed but no one has an idea of what to put in its place… or rather they all have many ideas, the best recipe for doing nothing.

I had a couple of queries, one from Irene Metropolou of To Vima in Athens and one from Camila Maia of Brazil’s Agência CMA What are the biggest challenges in terms of politics and the economy? The electoral law and the path to growth and recovery (austerity v. spending, liberalisation – the same issues of the last five years). Will it be stable enough to press on with reforms? Highly unlikely, because of the internal contradictions. They were not able to do so under Monti and probably won’t do any better under Letta. And what about the future of the PD? Will it implode and split? Have the changes harmed or strengthened the party? It will (it already has) change physionomy. Fabrizio Barca is trying to re-invent it from the left and Renzi from the right. There is no guarantee that their visions will coincide.

Maia also wants to know if Berlusconi has any chance of returning to power. At the moment the opinion polls give him a substantial lead which he can and is using to his advantage in government formation. He can threaten withdrawing support and bringing about early elections but real elections are a risk as Bersani learnt to his cost. And policital instability would lead to economic instability which would hurt his already weak Mediaset. So he will probably not be back in power this year.

And finally, will Napolitano dissolve parliament? He has two powers; one is dissolution of parliament, the other is his resignation, putting the responsibility firmly at the feet of the parties. He will only use them if Letta fails in his task and even then, he will look for just about any way out to avoid what would be the meltdown of the political system with serious effects on the economic and financial systems.