DENNIS ARGALL. A letter from Italy: to put some global and Australian issues in perspective.

Oct 22, 2018

In the languages of the mighty, in the temples of globalisation, the simplicities of neoliberal globalisation and orthodoxies of Brussels and money, Italy is the coming big problem, bigger than Greece, needing to be reined in, needing to conform and spend less. A country which many of the serious and mighty think is a bit of a joke. 

My intention in writing this, against a backdrop of daily fast paced developments, is to show the complexities of this country, its compassion and passions and urgencies. Things are in a ditch here. Whereas from 2010 to 2015 Australia’s GDP grew from USD 0.92 to 1.32 trillion, Italy’s shrank from 2.4 to 1.9 in similar period, having doubled in the first decade of this millennium. 

Italy’s intention is to deepen its budget deficit in 2019, contrary to EU wishes. Compromise will be difficult. There are elements in the budget which are naive; the Brussels lambasting will be severe, Merkel seeks compromise, but Brussels is Brussels.

Arriving in Rome fifty years ago, after absorption in Asian and Australian affairs, the distance from home and overall perspective offered abundant opportunity to cringe at the simpleton qualities of Late-Pre-Whitlam Coalition-Era utterances and postures. Europe at that time in some turmoil, the US as well. To spend time here again now gives a sense of deja vu.

There are common threads of populism and information upheaval between here and Australia. But as usual, debate here brings forth more ideas and ideas here are less prone to be shot down because they are ideas. 

The Italian republic was born in 1948 with a divide between wealthier north, wanting a republic and a poorer south, wanting kingdom. 

The new constitution in a spirit of untrusting idealism gave both the Chamber of Deputies and the Senate the power to bring down a government by vote of confidence; consequences known. But if you win in the national elections, the constitution awards extra seats.

The south long shaped by occupation by French, Spanish, Austrian and other kingdoms, over many centuries making Naples the richest city in Europe 200 years ago, sucking money and life out of the south, contributing to the rise of murderous secret societies. In Naples and beyond, the economy, infrastructure, social life and health were shattered by loss of the taxation power to the new Government of Italy in 1860.

In 1968 as now, as I talk to Italians in places coming southwards, there is a tendency to despise those further south and constant, well-founded, talk of corruption. Anger at established parties of both right and left. And now despair at globalisation, at abandonment by France and Germany. “They come here but they don’t like us. Merkel brings her husband here in summer but she doesn’t like us and they won’t help us.” [from an unsoliticed seminar from a woman in Rome as we stood in the rain on 10 October]

The early decades of the Italian republic saw division of vote between Christian Democrats [DC] around 40% and Communists around 30%, the DC not like the Catholic right in Australian politics but filled with every element of the political spectrum, from fascist and monarchist, to socialist and anarchist, much after the pattern of the non-confessional parties. In the 1970s the ‘years of lead’ destroyed much middle ground as also in far off places like El Salvador despite efforts to open government to alliance with the left. Which led to assassination of a former prime minister.

The collapse of the Soviet Union shattered the Italian left. Corruption and Mafia links shattered the DC. In their place there were successions of alliances between parties arising on the left, leading several times to government most recently under the Partito Democratico [PD]; on the right the rise and rise of Berlusconi, dominating media as well as much political discourse as we see in other places when selfishness and self-indulgence are endorsed as national entitlements… and with which we are familiar in Australia.

The president, elected by the two houses of parliament sitting together, has significant capacities to intervene, both in shaping governments and in particulars. The present and immediate past presidents are deeply admired. The immediate past President, Giorgio Napolitano, former Communist deputy, was a minister for the interior in a coalition government in the 1990s. In 2000, as just one example of approach, he struck down nominations by Berlusconi’s party for regional elections near Naples because of Mafia links. There was popular demand for him to remain as president; he stayed a little but retired at 90. Sergio Mattarella, the incumbent, came to politics when his brother, a young politician, was assassinated by the Mafia. Sicily isn’t an easy place for politics. President Mattarella entered parliament with the DC, served in governments across the spectrum, known on all sides for his ferocious decency. He spent much less time in assembling a coalition government in Italy after March 2018 elections than was required in Germany when Merkel lost her majority. 

The present government is between parties of mutual loathing. The party that got the most votes, the Movimento Cinque Stelle [Five Star Movement, M5S] sought a coalition with the left, the PD, which had lost government and lost much of its support. In bruised hubris, but seeing also the fate of the Social Democrats in Germany and Liberal Democrats in the UK, in coalitions, the PD said no. Eventually a coalition between M5S and La Lega, formerly the secessionist Northern League, then opportunistically dropping of ‘northern’ and simplifying its language of intolerance to get huge support in southern Italy.

Luigi di Maio of M5S is more a natural ally of Jeremy Corbin. Green and altruistic.

Matteo Salvini, head of La Lega, has not only been trying to wrench regions from M5S but also, to avoid competition in future, conferring with Belusconi’s party and the Fratelli d’Italia, the Brothers of Italy, descendants of the party governing Mussolini’s brief republic after Germany invaded Italy in 1943 after Italy’s surrender in World War 2.

Neither di Maio nor Salvini would serve as prime minister, both are deputy prime ministers in the coalition. The Prime Minister is from outside, a professor of private law, Giuseppe Conte.

While Salvini has been rabble-rousing at home, di Maio, born in 1986, has in the early months of government been to Chicago and New York, Paris, London and Frankfurt to introduce himself to bankers. He has also been to China to discuss the BRI, collaboration in African development and perhaps future sources of finance. (Worth noting that as leader of a movement, not a party, this deputy prime minister had to produce on social media an economy class boarding pass to disprove rumours and outrage that he’d flown to China business class on KLM. In which context note also that the prime minister’s salary is around EUR 120,000, consistent with recent previous prime ministers.) Salvini is next off to Moscow to discuss sanctions, to which this government is opposed, as it is also opposed to American wars in the Middle East since 2000. 

On 28 September the Italian government announced a budget with deficit of 2.4% of GDP in 2019, the EU wanting Italy’s deficit to be no more than 1.6%. The general rule in the EU is 3% but not for those with high existing debt. 

The government moderated its position swiftly to indicate the 2.4 was for one year only. 

Main planks of the budget include, as neatly summarised by DW:

  • setting aside €10 billion ($11.6 billion) for a universal basic income of €780 for the unemployed and those on low wages
  • lowering taxes to a flat rate of 15 percent for more than a million workers
  • making 400,000 jobs available to the young by enabling people to retire earlier. [one third of under-30s are unemployed.]


At 28 September, the Finance Minister was opposed to this budget; he is now on board. The national budget office has not approved. The budget has gone to Brussels, for discussions next after Brexit this week, along with migration issues. Italy is angry at being pressed to conform to Brussels on this hand while on the other taking 700,000 refugees since the beginning of the Libya war without sharing of the burden. Goodwill shredding in all directions, including inside Italy: anger at refugees, anger at lack of compassion for refugees.

Budget details continue to emerge, making evident a lack of consultation. Yesterday an unexpected point 23 said henceforth there would be no medical school quotas, anyone able would be admitted. The scheme for minimum income is difficult given that in the north EUR780 a month is modest, in the south enormous; and given that many declare no income when they should. Plans for a moratorium on debts to government from tax to parking, to catch everyone in the system, seem naive.

The Minister for European Affairs Paolo Savona wrote to Brussels in early September on the need for a different, fairer and stronger Europe with this epigraph:

There is nothing more difficult to undertake, more perilous to conduct, or more uncertain to succeed, than to introduce a new order of things. For the initiator has the enmity of all who would profit by the preservation of the old institutions and merely lukewarm defenders in those who would gain by the new ones.” (Niccolò Machiavelli, The Prince, 1513)


For long term perspective, it is useful to look at this by the Genovese historian of banking Giuseppe Felloni. On China in the past I urged people not to look at some point on the edge of a bouncing wheel, but at the whole vehicle. This quote serves similar purpose. I draw attention to the last words: “…have no easy explanation.” So we might say of many current affairs. The necessity is to find ways forward, out from bewilderment…

“Between the 11th and 16th centuries Europe’s position with regards to other civilisations radically changed. With the advent of the Ottos in the 10th century, when the fundamental features of the continent‟s policies became established, Europe was still socially, culturally and economically backward, overtaken by the refined and still solid Byzantine Empire, the flourishing world of Islam, albeit showing the first signs of political division, and the magnificent Song Dynasty in China. In the 16th century, with the disappearance of the Byzantine Empire and an upturn in the fortunes of Islam with the Ottoman Empire, Europe by now was able to compete with the China of the Ming dynasty in terms of scientific knowledge and military strength. This self-sustaining change had its roots in Italy and the Flemish area and gradually was to spread elsewhere in Europe. These extraordinary advances, which were set to continue in the forthcoming centuries and would allow European countries to expand their spheres of influences all over the world, have no easy explanation.”

Dennis Argall is a former Australian diplomat etc, who is in Italy for seven weeks.

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