Italy’s Renzi Has Failed on Two Counts

The Democratic Party leader has failed to unite the left and failed to convince voters he can still deliver reforms.

Italian prime minister Matteo Renzi answers a reporter's question in Berlin, Germany, July 1, 2015
Italian prime minister Matteo Renzi answers a reporter’s question in Berlin, Germany, July 1, 2015 (Palazzo Chigi)

When Matteo Renzi won back control of Italy’s Democratic Party a year ago, I argued he had two challenges:

  1. Uniting the left.
  2. Convincing voters who are desperate for reform that he could still deliver.

He has failed on both counts.

Uniting the left

Renzi has made pacts with smaller center-left parties, but their support adds up to no more than 3 or 4 percent.

Left-wing purists who split from the Democrats to form their own party, called Free and Equal, are polling at 6 to 7 percent support — enough to deny the Democrats a plurality.

The Democrats are polling at 23-25 percent; the populist Five Star Movement at 26-28 percent.

To be fair, Renzi did try to win over his critics. Their shortsightedness and unwillingness to compromise on key issues — immigration and labor reform — will be primarily to blame if the left loses power in the election in March. But personal animosity toward Renzi played a role.

Reform

Renzi’s labor reforms, which made it easier for firms to hire and fire workers, have not been without effect. Unemployment has come down from 13 to 11 percent.

But a third of young Italians are still out of work and Italy’s economy is growing at half the pace of Spain’s: 1.5 percent in 2017.

The reason: Renzi watered down his reforms in the face of left-wing and trade-union pressure.

  • The reforms did not apply to anyone already in work.
  • Tax breaks to incentivize hiring were phased out after a year.
  • Licensing requirements that make it almost impossible for young Italians to become a lawyer, notary, pharmacist or taxi driver were unchanged.

Little wonder Italians are wary of giving Renzi a second chance.