Renzi Picks the Wrong Fight — Again

Matteo Renzi
Then-Italian prime minister Matteo Renzi answers questions from reporters in Rome, December 10, 2015 (Palazzo Chigi)

Former Italian prime minister Matteo Renzi has pulled the plug on the country’s ruling center-left coalition.

Renzi, now a senator, has withdrawn his 48 lawmakers and three ministers (one junior) from the coalition ostensibly over a spending dispute. He wants to use Italy’s €200+ billion share of the European Union’s €750 billion coronavirus recovery fund to invest in infrastructure and the green economy. The other ruling parties prefer to use the bulk of the money for short-term stimulus.

Renzi has also proposed to tap into the European Stability Mechanism (ESM), set up in the wake of the euro crisis, to help pay for Italy’s increased health care expenses, something Prime Minister Giuseppe Conte has resisted. ESM funding would come with strings attached. Countries are free to spend their share of the coronavirus recovery fund however they see fit.

Renzi’s proposals have merit. Italy is failing its next generation. It needs structural reforms — which ESM support would require — to catch up with the rest of Europe. Spending €200 billion to prop up the Italian economy in the short term is a wasted opportunity.

But expecting the other ruling parties to meet his terms, when Renzi’s is by far the smallest of the three, is unreasonable. Throwing Italy into a political crisis when it is still suffering one of the worst outbreaks of coronavirus disease in the world is irresponsible.

Conte must now try to find a new majority in parliament, perhaps with members of former prime minister Silvio Berlusconi’s Forza Italia, or call early elections. Read more “Renzi Picks the Wrong Fight — Again”

Be Wary of the Return of Big Government

Union Station Washington DC
South Front Entrance of Union Station in Washington DC, July 4, 2019 (Unsplash/Caleb Fisher)

Big government is back.

Massive rescue programs have prevented business failures and unemployment on the scale of the Great Depression, even though last year’s economic contraction was nearly as bad. The European Union agreed a €750 billion recovery fund, financed, for the first time, by EU-issued bonds. The money comes on top of national efforts. The United States Congress passed a $2.2 trillion stimulus, worth 10 percent of GDP, in March and added another $484 billion in April. An additional $900 billion in relief was included in this year’s budget.

Joe Biden, the incoming American president, wants to spend $2 trillion more over the next four years to transition the United States to a greener economy and create a public health insurance program. Corporate tax would go up from 21 to 28 percent.

In Spain, a socialist government has introduced the biggest budget in Spanish history — partly to cope with the impact of coronavirus, but also to finance digitalization, electric car and renewable energy subsidies, infrastructure and rural development. Taxes on income, sales and wealth are due to increase.

In the United Kingdom, the ruling Conservative Party is building more social housing and it might renationalize rail. Unlike during the last economic crisis, it does not propose to cut spending even though tax revenues are down.

Same in the Netherlands, where all the major parties agree the government needs to do more to reduce pollution and prevent people at the bottom of the social ladder from falling through the cracks.

I’m not opposed to more government per se. I’ve argued that the United States should imitate countries in Northern Europe to improve its public services, particularly child and health care and housing.

But let’s be careful not to throw “more government” at every problem. Sometimes government is the problem. Read more “Be Wary of the Return of Big Government”

Italian Regional Elections: Results and Takeaways

Palazzo Balbi Venice Italy
View of the Palazzo Balbi, the residence of the regional president of Veneto, in Venice, Italy, April 1, 2013 (Wikimedia Commons/Wolfgang Moroder)

Italians elected new regional councils and governors in the Aosta Valley, Apulia, Campania, Liguria, Marche, Tuscany and Veneto on Sunday and Monday.

They also voted in a referendum to reduce the number of lawmakers in the Chamber of Deputies from 630 to 400 and in the Senate from 315 to 200.

The right has gained control of one more region — Marche — but the center-left Democrats held their own in the regions they governed.

The populist Five Star Movement, which shares power with the Democrats nationally, underperformed everywhere. Read more “Italian Regional Elections: Results and Takeaways”

Everything You Need to Know About the Italian Elections

Arcevia Italy
View from Arcevia, a town in the central Italian region of Marche, December 24, 2013 (Giorgio Rodano)

Seven of Italy’s twenty regions hold elections on Sunday and Monday. Four are currently governed by the center-left, two by the right. Polls suggest that balance could flip.

The seventh, the Aosta Valley, is governed by local parties representing its French-speaking minority.

Italians will also elect over 1,100 mayors, two senators and decide in a referendum whether or not to cut the number of lawmakers.

Here is everything you need to know.

Italian law forbids the publication of polls in the two weeks prior to the vote, so all the numbers cited here are at least two weeks old. Read more “Everything You Need to Know About the Italian Elections”

Italy Should Heed Dutch Advice

Giuseppe Conte Mark Rutte
Italian prime minister Giuseppe Conte is received by his Dutch counterpart, Mark Rutte, in The Hague, July 10 (Palazzo Chigi)

The Dutch government is criticized in the international media for resisting EU grants (it prefers loans conditions on reforms) to help pay for the economic recovery in coronavirus-struck Southern Europe. But the critics are oddly incurious about the Netherlands’ motives.

An editorial in Monday’s Financial Times is typical. It accuses Prime Minister Mark Rutte of singlehandedly putting the EU economy at risk, but it resorts to stereotype and innuendo to explain why he’s unwilling to sign off on a €750 billion recovery fund: the Dutch are stingy and Rutte is worried about losing voters to the Euroskeptic right. (He’s never been more popular.)

Mr Rutte pays lip service to the idea of a stronger, geopolitical Europe but is unwilling to accept the price tag that comes with it, especially with national elections looming next year.

I single out the Financial Times because it should know better. There have been worse opinion columns in the Italian and Spanish press.

At least the Financial Times hints at the need for “productivity-enhancing reforms” in Italy and Spain, which have borne the brunt of the coronavirus pandemic. But it doesn’t say which reforms or why.

In an opinion column for EUobserver, I do. Read more “Italy Should Heed Dutch Advice”

Right-Wing Italians Swap Salvini’s for Even More Right-Wing Party

Matteo Salvini
Matteo Salvini, the leader of Italy’s Northern League, gives a speech in the European Parliament in Strasbourg, April 29, 2015 (European Parliament)

It’s been a bad few months for Italy’s populist right-wing leader, Matteo Salvini.

First his erstwhile governing partner, the Five Star Movement, and the opposition Democrats outmaneuvered him by teaming up to avoid snap elections which polls predicted Salvini’s League would win.

Now his antics in reaction to the government’s coronavirus policy are falling flat.

Salvini and his party “occupied” parliament (refusing to leave the chamber) to demonstrate against the COVID-19 quarantine. He has tweeted out disinformation about the disease, claiming it was created in a Chinese lab. Few Italians care.

Polls find two in three have little faith in the EU anymore, which many Italians feel has been too slow to come to their aid. (Italy has had one of the worst outbreaks of coronavirus disease in the world.) Yet it hasn’t given the Euroskeptic Salvini, who once argued for giving up the euro, a boost. Read more “Right-Wing Italians Swap Salvini’s for Even More Right-Wing Party”

Renzi Won’t Become the Italian Macron

Italian Democratic Party leader Matteo Renzi visits a police academy in Rome, November 9, 2016
Italian Democratic Party leader Matteo Renzi visits a police academy in Rome, November 9, 2016 (Palazzo Chigi)

Former Italian prime minister Matteo Renzi is leaving the Democrats to form his own new centrist party. Some thirty lawmakers are reportedly ready to go with him.

Renzi, a social democrat, is hoping to do for Italy what Emmanuel Macron did for France.

Don’t bet on it. Read more “Renzi Won’t Become the Italian Macron”

Italy’s Problem Is Not Its Electoral System

The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome
The facade of the Palazzo Montecitorio, the seat of the Italian parliament, in Rome (Shutterstock)

Alberto Mingardi of the libertarian Bruno Leoni Institute in Milan argues in Politico that the “deep roots” of Italy’s coalition chaos lie in an electoral system that makes it hard for any one party to govern.

I think the roots actually go deeper than that. Read more “Italy’s Problem Is Not Its Electoral System”

Matteo Salvini Appears to Have Made a Huge Mistake

Matteo Salvini, the leader of Italy's Northern League, gives a speech in the European Parliament in Strasbourg, March 15, 2017
Matteo Salvini, the leader of Italy’s Northern League, gives a speech in the European Parliament in Strasbourg, March 15, 2017 (European Parliament)

Italy’s most popular politician appears to have made a huge mistake.

Matteo Salvini, the country’s hardline interior minister, brought down his far-right League’s government with the anti-establishment Five Star Movement on Tuesday, hoping to trigger early elections that polls suggest his party would win.

But none of the other parties are willing to play ball. Read more “Matteo Salvini Appears to Have Made a Huge Mistake”

Italy Is Failing Its Next Generation

View of the Piazza del Duomo in Milan, Italy, November 24, 2009
View of the Piazza del Duomo in Milan, Italy, November 24, 2009 (Bjørn Giesenbauer)

Italy is creating a lost generation.

Consider the following statistics, some taken from the Financial Times:

  • 30 percent of Italians between the ages of 15 and 24 are out of work, more or less the same rate as in Spain but almost double the eurozone average.
  • Of those in work, the majority are on temporary contracts.
  • Nearly eight out of ten young Italians are in part-time work and unable to find full-time employment, the highest rate by far among large European economies. In France and Spain, it’s about 50 percent.
  • Italy spends far less on tertiary education that its neighbors. The result: only 27 percent of Italians in their thirties have a university degree, the second-lowest rate in the EU, where the average is 40 percent. Italy does especially poorly in educating migrants: just 13 percent of its foreign-born population has completed university against 36 percent in the EU as a whole.
  • Average real incomes are roughly at the level they were in 1995. In France, Germany and Spain, they have grown about 25 percent.
  • 3.2 percent of working-age Italians now live elsewhere in the EU, up from 2.4 percent in 2008. Read more “Italy Is Failing Its Next Generation”