Trying to Reinvent Italy
ROME — ITALY has long suffered from inertia, its individual vitality smothered by the bureaucracy and opacity of the state. Italians are rich, prudent savers. Their state is poor, profligate and inefficient. For 30 years now, since I was a correspondent in Italy, I have watched the country deploy its ingenuity to evade modernization, culminating in the orgy of baroque escapism known as the Berlusconi years.
So it was with some astonishment that I found Prime Minister Matteo Renzi sweeping in to meet me the other day in jeans and a white open-neck shirt (“I hope you don’t mind, it’s casual Friday!”), without the obsequious retinue of past Italian leaders, bearing a message of change. His aim: the creation of “un paese smart” — a smart country — that has “stopped crying over itself.”
Renzi, who has been in office less than 10 months, is 39. This in itself is something unthinkable for the political gerontocracy that was Italy, the lugubrious state epitomized by the late Giulio Andreotti, who was prime minister seven times. “The new generation should do politics the American presidential way, two mandates and out,” he told me during an hourlong interview in his office at Chigi Palace. “I give myself a maximum of eight years if I win the next election, and then I’ll leave politics.”
He is a man in a hurry: constitutional reform, electoral reform, sales on eBay of a fleet of official luxury cars, women thrust into top jobs (half the cabinet is female), plans to slash the number of members of Parliament and senators (currently almost 1,000 of them). “In America, notoriously smaller and less important than Italy, you have 535 representatives and senators,” Renzi said, smiling, raising his eyebrows. Message received.
He held up his portable device and said he wants the whole labyrinthine Italian public administration simplified on an app. “This is the future of our administration!” he said. “How much pension do I get — all will be here.”
Un paese smart.
The jeans and app talk send a message — no more business as usual. As a European politician in an age when national politics often seem a charade, outpaced by borderless finance, Renzi knows that symbolism is important in producing substance. The “Jobs Act,” Renzi’s pivotal economic reform, was approved by Parliament this month. It simplifies the labor code, makes it easier for companies with over 15 employees to fire workers, and links workers’ protection to their length of service. By Italian job-for-life standards, it is a revolutionary step. To have a job was always to be “sistemato,” which roughly meant security within the system forever.
I asked Renzi why the legislation has an English name. “Because I like what Obama did,” he said. “The most interesting things he’s done have been on the domestic front. He took an economy in crisis in 2009, intervened, relaunched growth, and created jobs, all things that Europe has not succeeded in doing.”
That sounds nice, but of course the American economy is hard-wired for growth, labor mobility and innovation. Italy’s is hamstrung. It is saddled with climbing public debt and recession. Unemployment is over 13 percent. When I arrived in Italy, I found central Rome closed by protests against the “Jobs Act.” Renzi has a big fight on his hands to get Italians to change their ways.
His room to maneuver and pump up the economy is limited. The European Commission is warning that Italy may find itself in breach of the European Union’s Stability and Growth Pact, which sets tight limits on budget deficits and stringent regulations on reducing debt. Angela Merkel, the German chancellor, said this month that any breach would be “negative for Europe.”
This sort of talk gets Renzi exercised because he believes it makes growth impossible. His Democratic Party is just seven years old. In a Europe where extremist and xenophobic parties have been growing, a reflection of widespread anger at high unemployment and stagnation, it represents an exception: a mainstream party of the center-left that has surged.
This success has set up Renzi as perhaps the second-most-powerful politician in Europe after Merkel. In schematic terms, he’s Mr. Anti-Austerity versus Ms. Austerity. He’s also the only new game in town, with Britain caught in a debilitating debate over a possible exit from the European Union and France turning in circles under weak leadership.
“Here a lot of people have accused Merkel of being the guilty one in the crisis,” Renzi said. “But the fault is not hers. It’s ours. We got ourselves into this. If we had done labor reform 10 years ago, when Germany did it, we would have been a lot better off.” Still, he went on, something has to give in a Europe caught “in a dictatorship of bureaucrats and technocrats,” unwilling to accept that “politics is the realm of flexibility.” Iron Frau, take note.
The European economic model, Renzi declared, is wrong. “We cannot go on reasoning only on the basis of austerity and rigor. In a phase of deflation and stagnation, we can’t. We have to keep our accounts in order, spend money well, yes, because Germany is preoccupied that southern countries don’t spend money wisely — and it’s true — but the central point is that if we tackle our problems, European economics must change in favor of investment in growth.”
I asked Renzi how. He said investment in strategic areas — digital broadband, education, research, energy, the green economy — “should be outside the calculation of the Stability Pact, which is the instrument of rigidity and austerity.”
How, he asked, can he fight criminality and massive unemployment in Sicily if some Stability Pact formula on deficits and debt blocks him?
The eurozone, in which Italy is the third-largest economy, is an unwieldy entity — tied by a shared currency, divided by everything from fiscal policy to culture. Anger over stagnation is boiling over. Renzi is right: Something has to give for Europe and its jobless youth. In the past, even Germany has broken Stability Pact rules in a time of need. Now it’s payback time. But if Renzi gets some margin of budgetary flexibility, he must deliver. Waste and corruption are endemic to Italy. Curtailing them is a Sisyphean task. “First I must put my own country in order,” Renzi acknowledged. “Otherwise I will never be credible.”
A spell has been broken in Italy. Politics have shifted. He compared the country to “a sleeping beauty in the enchanted wood that can be woken up.”
The beauty is certainly stirring. Whether she will now bound forward remains to be seen. Italians, versed in the rise and fall of powers and the vanity of ambition, tend to be skeptical of transformation. It will be an arduous journey. But I’m inclined to give Renzi the benefit of the doubt.