Italy’s Upcoming Election and Its Ongoing Neoliberal Project

Yves here. Please give a warm welcome Conor Gallagher, who will be writing for NC every other week, alternating with KLG.

Conor has been a professional journalist for years, at small outfits in the US and as an editor/producer at CCTV News in Beijing and TRT World in Istanbul. As this post suggests, Conor has also worked in Italy. He’s also experienced many of the degradations of neoliberalism first hand, including toiling in the gig economy, struggling with student debt, and fighting with the US health care system to get treatments for his mother, suffering from a terminal illness.

Conor is also keen about NC’s esteemed commentariat and looks forward to sharing information and perspectives with you.

By Conor Gallagher, a relapsed journalist living in the southwestern US 

The media is predictably up in arms over the “fascist” Brothers of Italy Party (Fratelli d’Italia or FdI) that looks set to lead the country’s next government after the Sept. 25 election.

While the party does not yet meet the qualifications for Fascism, it is fiercely anti-immigrant and nationalistic. The Brothers are expected to join forces with the anti-immigrant, pro-business League Party and Silvio Berlusconi’s “catch-all” party Forza Italia to form a coalition government.

For the legions of dissatisfied Italian voters the Brothers are their latest hope. It will be the 14th government since the turn of the century, and from the voters’ perspective there is a recurring theme: the decades-long decline in Italians’ standard of living.

Annual net income of the Italian household, which was €27,499 (at constant 2010 prices) in 1991, declined to €23,277 in 2016—a drop in median living standards of 15%. Mean net household income fell by €3,108 between 1991 and 2016 or by about 10%. Italy is the only major Eurozone country that, in the past 27 years, suffered not stagnation but decline.

Not surprisingly, distrust, pessimism, and frustration with the government have remained widespread throughout the previous 13 ruling coalitions. Despite the frequent changing from center-left to right to center-right, Italians have a harder time getting by, and the post-WWII welfare state, chronically underfunded, continues to crumble like the ruins of Pompeii.

So how to continue to sell the austerity policies prescribed by the EU? Italian governments in recent years have either embraced neoliberal reforms or been handcuffed by Brussels.

In 2011, at the height of the Eurozone crisis, Berlusconi resigned after he claimed he came under heavy pressure from the EU and the US. Former U.S. Treasury Secretary Timothy Geithner denied this in his book “Stress Test: Reflections on Financial Crises” writing:

…as helpful as it would have been to have better leadership in Europe, we couldn’t get involved in a scheme like that. We can’t have his blood on our hands.

Either way, after months of tension on financial markets led to fears that investors could refuse to buy Italian bonds, the crisis was used as an excuse to institute a heavy dose of Neoliberal shock therapy under a technocratic executive. Former EU Commissioner Mario Monti was installed as PM (after some serious bending of the Italian Constitution) and imposed a series of austerity measures which predictably failed to halt a steep rise in Italy’s public debt or restore growth.

And Italians were none too happy about it, despite the technocrats’ assurances it was being done to restore the country’s “credibility” for financial markets.

In 2014, leader of the Democratic Party Matteo Renzi was the “change” candidate. Largely supported by the PMC, businesses, and identity liberals. He proceeded to lead a weakening of worker rights and push corporate-style management of schools. Renzi bowed out after his constitutional referendum that would have allowed further fast tracking of neoliberal policies crashed and burned.

The Five Star Movement, which railed against the establishment and its austerity policies, took power in 2018. It vowed to reverse the country’s long standard-of-living decline and provide concrete benefits to working class Italians. Meanwhile its government partner, Lega, focused on its own raison d’etre: beating back the tide of immigrants.

Five Star’s draft budget plan called for an increase in the public deficit, a tax amnesty for lower incomes, pension reform allowing early retirement, and a basic income for citizens.

The EU, to put it mildly, was not a fan and threatened Italy with the dreaded excessive deficit procedure. Therein lies the rub: how do you appeal to a wide swath of the Italian electorate by reversing the decline in their living standards while remaining inside the straitjacket of EU rules? The Brothers of Italy Party and its leader Giorgia Meloni appear likely to get their shot.

After another technocratic government led by former European Central Bank President Mario Draghi lasted for the past year, polls show Meloni as the favorite to become the next prime minister.

Despite all the media panic over the resurrection of Mussolini, Meloni and the Brothers are focusing primarily on anti-immigration efforts coupled with piecemeal financial assistance.

The economic proposals don’t go nearly as far as Five Stars’ in 2018, but they do include the creation of free nurseries and the introduction of €400 per month for families with children under 6 years old in an effort to boost the country’s birth rate. It remains to be seen, however, if the budget can absorb such line items without drawing the ire of Brussels.

Meloni and company are already softening their stances on abortion, swearing allegiance to the EU and NATO, and are toeing the company line on Russia.

Instead of another March on Rome, the situation is more reminiscent of Poland and its Law and Justice Party, which took power in 2015 (and has remained there ever since) on a platform similar to the Brothers of Italy. Poland had also been grappling with decades of neoliberal policies and a steep drop in quality of life.

Despite criticism of its conservative social policies, the Law and Justice Party enjoys widespread support from the working class due to its popular programs, including an increase in pension payments, subsidizing children’s school supplies and monthly payments to families per child, from the second child onward.

Much like the Law and Justice Party, the Brothers of Italy may be on the verge of offering a mixture of nationalistic conservatism that co-opts particular social forces to accept the promotion of neoliberalism.

But if they offer too much in the way of benefits to the working class and the EU steps in or if they go too small and lose support, there will likely be new faces after the next election to ensure the neoliberal story will remain the same.

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  1. lou strong

    Fair points by the author.
    The antifascist alarm in abscence of real fascist forces in Italy becomes even more grotesque in the light of the support to some real neonazis in Ukraine.
    Not so complete the comparison to their Polish political relatives as Meloni AFAIK is not proposing to raise welfare.
    Little attention in the economical ambients has been paid to the ECB’s recent launch of the TPI
    Whenever trouble will get to the markets,troubled countries sovereign bonds will be purchased under 4 conditions :
    a) fiscal discipline
    b) macroeconomical stability
    c) sustainability of public debt
    d) compliance to the prescriptions of the Next Generation program, which for Italy sum up to the number of 528 conditionalities/prescriptions.
    Assessments and decisions about the above points will be taken by a “joint committee” composed by EU Commission , ECB, European Stability Mechanism .
    All this while after years of Italian positive trade and current account balance,which were in part the dark side of the suppression of internal demand (the author correctly shows the data about net incomes )
    Recently both the trade and the current account balances went negative.

    1. DJG, Reality Czar

      lou strong:

      Thanks for adding these facts. A few more things on my radar screen:

      –The Fratelli d’Italia are going on about being Atlanticists, although an Italian writer (it may have been Alessandro Orsini) recently noted that their Atlanticism is to make sure that the U.S. doesn’t get edgy. So they support the neonazis in Ukraine in exchange for less U.S. meddling in Italy.
      –So far as I know, the centrodestra wants to get rid of Reddito di cittadinanza. So they can offer child support all they want, but it won’t make up for the monthly Reddito di cittadinanza.
      –Salvini and Berlusconi trotted out the flat tax again, but Fratelli d’Italia nixed it. The flat tax is a malformed idea in search of fools to advocate it. Does this make Fratelli d’Italia a smarter group than, say, the Lega?
      –As you mention, in spite of Italy’s big deficit, the trade balance and current account balance have been carefully managed. Yet this care means that Italy is still treated by the EU like a Magna Grecia. This treatment is being commented on.
      –The “center” is a mystery, a swampy mystery, of Matteo Renzi and Carlo Calenda (who is referred to now and again by Fatto Quotidiano as the Man from Confindustria).
      –Enrico Letta is presiding over a social club that no longer has a connection–deliberately severed–to its historic mission and base. What base? And this group with no ideas and no program is going to win the elections?
      –It is obvious that Draghi wanted to get rid of Conte, who was asking for too much–and Draghi, being mainly A Manager, wasn’t all the interested in passing a legislative program.

      And thanks to author Conor Gallagher for not doing the usual handwaving and gnashing of teeth about ungovernable Italy, land of so many filled shapes of pastas, and the inscrutable arancini-arancine divide.

      Italy has economic problems, brought on by its elites. (Americans will recognize the symptoms.)

      And because Draghi was parachuted in (like Monti), the voice of the People was delayed from speaking. And, now, ooops, there will be elections.

  2. Pelham

    Really nice summation of Italian politics, a subject so complex that I normally dread exploring it. One question: How did Five Star lose power? Through another helpful EU intervention, perhaps?

  3. Matthew G. Saroff

    I’m thinking that Italy may have to backdoor its way out of the Euro to get out of this mess.

    Basically, it needs something akin to the Mini-BOT for the provinces to develop the infrastructure to dump the Euro.

    It would still be exceedingly difficult.

    Of course, ejecting the Germans from the Euro would do 90% of the same thing with much less effort, but that is not going to happen.

  4. ThePodBayDoorsAreClosed

    Great stuff. But because fascists were nationalists, does that automatically make nationalism bad? Have globalists (WEF, WHO, UN 2030 etc) not sufficiently revealed both their agendas and their competency at this point? “Stakeholder capitalism” ( i.e. not the kind for you and me) plus “equity” (today’s rebranding of the word “communism”)?

    I heard one of the top BBC “journalists” spitting fire about Meloni and the two worst curse words he could come up with were “nationalist” and “populist”. In other words, the BBC hates countries and they hate the will of the people in those countries. To that I say: Vai Meloni! Even if she is dead wrong about Ukrainistan

  5. Ignacio

    It is sad to witness how politics are being degraded in many countries and particularly how the EU turned to be the enforcer of TINA politics. Supposedly liberal outfits like El País are already missing the very beloved figure from the PMC, Mario Draghi and will surely fall in horror when the yet to qualify as neofascits form the new government.

    Sad times indeed. But, welcome here Conor Gallagher!

  6. zagonostra

    My sister lives in Brescia and when conversing on news/politics in her neck of the world, few references are made to alternative news sources. I’ve often send NC links, but it seems that Italians once they read the links/articles they go back to glittery MSM news outlets. When I mention CIA operations like “Operation Gladio” I get blank stares from her children (early 20’s and 30’s). I’d be curios to know what your impressions are of Italian’s media feeding habits – certainly seems less rich than their gustatory tradition.

    1. BillS

      From what I see in Veneto, many still get their media in the traditional way: TV and newspapers. Social media is popular, but politically aligned newspapers like Manifesto (calls itself “Communist”, but really social democrat left) to Avvenire (Democristiano) to Libero (Conservative) are still widely read. TV is dominated by RAI and Berlusconi’s media network. RAI tends to the mushy left and Berlusco’s channels go for whatever sells (usually flashy, content free infotainment).

      All mainstream news outlets, everywhere on the (now meaningless) left-right spectrum have gone all-in on the Ukraine (mis)adventure. The main political struggle seems to be between the various flavors of populism and the technocrats. Neoliberal dogma infests all sides of politics. In my mind, this is what did in the 5 Stars movement. They did not stick to their guns with respect to their anti-austerity promises. I realize it would have caused a rupture with the EU, and maybe M5S did not have the courage to go that route. They paid the political price for this. None of my Italian friends who sit on the “left” have any idea who to vote for. They are not eating the neolib dog food anymore, but see no alternatives. The populist Left has been totally eviscerated. They do fear that Meloni’s FdI may attempt constitutional changes similar to those attempted by PiS in Poland and Orban’s Fidesz in Hungary, so will probably support PD as the lesser of two weevils. My acquaintances on the political right share much of the conspiratorial worldview of the Trumpian right and there is a general sense that we should just bring the whole sham down as soon as possible – which I find hard to disagree with, but shudder at the thought of what comes after!

  7. eg

    The Euro Zone is an unsustainable neoliberal omnishambles — it’s only a matter of time before it unravels.

  8. orlbucfan

    Hola Conor! You’re joining a terrific news room. I need my niece right now; she speaks/reads fluent Italian. Thanks for the read. Did the U.S. craporate start this neoliberal/austerity nightmare? Cos Italy sure sounds suspiciously like here, even with several political parties.

  9. Irrational

    Welcome Conor, what an excellent way to relapse!
    My comment is in no way a criticism of the post, but the quote that Italy is the only major EU economy to suffer decline prompts me to mention Greece. It neither was nor is a major EU economy, but the press headlines are that the country will finally exit EU supervision and get their financial sovereignty back – after over a decade in a straitjacket (ably covered by NC over the years). In that time GDP per capita dropped from over USD 30,000 to about 2/3 of that and the debt to GDP ratio increased to 190%! I am surprised there is a Mitsotakis in power and not a distinctly less establishment figure.

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