Italy’s Upcoming Election and Its Ongoing Neoliberal Project

Italy’s Upcoming Election and Its Ongoing Neoliberal Project 1

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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