November 08, 2011

Berlusconi's decay and the rise of debtocracy

Sixteen months ago, with the majority of Italians, I celebrated Berlusconi’s loss of control over a parliamentary majority - but with a bitter aftertaste. Since then, he has further weakened by more scandals, more economic difficulties, more international pressure, more electoral defeats and more defections. Yet he managed to scramble through a number of confidence votes and instead of his end we have witnessed a long agony, a revolting process of rotting and regurgitating parliamentary defectors on either side.

Today he has finally announced his intention to resign soon, immediately after the new budget law. It cannot be excluded that, after having survived all possible political near-death one can imagine, he might survive again. Over the next weeks he will certainly not spare efforts or money in order to re-buy some MPs, for a further extension of his rotting process in government, whether still as prime minister personally, or (no substantial difference) through his formal replacement by the loyal Angelino Alfano.

But whether he ends within weeks or a bit later, the bitter aftertaste of last year has become stronger, and nobody really is celebrating in Italy today – despite a multitude having waited for years for this day. The end of Berlusconi is not necessarily a move to something better, even if it is difficult to imagine something worse. It looks more and more, in Italian history’s terms, like a 25th of July rather than a 25th April. The reference is to the 25th of July 1943, when Mussolini was forced to resign by his own party’s Council and was arrested – but while millions of Italians celebrated the apparent end of the war and fascism, there were more almost two years of further, and more horrific, war, fascism and Nazi occupation, and Mussolini, having been liberated by the Germans, only ended on the 25th April 1945 (the Italian national day, which part of the Right wants to cancel).

Just as fascism could go on after the 25th of July, thanks to German troops, it looks like Berlusconi might be replaced not by a democratic turn, but by a technical government supported by large part of his party and of the opposition, under direct control from EU institutions, and possibly led by Mario Monti, former Internal Market Commissioner. I listened to Monti at a Conference in Warsaw three weeks ago, when he said that, ‘in a way’ what is happening to Greece and Italy is actually ‘the biggest success of the Euro’. By this point the Polish audience was checking whether their simultaneous translation headphones were working properly, but Monti went on explaining his original idea of ‘success’: without Euro, it could not be imagined that Greece and Italy would ever undertake the difficult, long-needed reforms they are undertaking now...

After many governments (starting from Bush, and until Slovenian Pahor last September, but still counting) have been taken down by the crisis, Berlusconi’s would be the third taken down specifically by the Euro crisis, in just a month. The Slovak government fell on the Euro-rescue, but as Slovakia is not itself in a debt crisis, Slovak democracy is proceeding on its course and Radičová will be likely replaced by Fico, who with all his limits is probably the best the weak Central Eastern European left has produced in many years. The problem is what is happening to Greece and Italy, and to a lesser extent Spain.

The fact that the ‘markets’ and the EU could not accept the idea of a referendum in Greece and forced, after the approval of new austerity measures, a new coalition government to be led by, surprise, the former deputy president of the European Central Bank says it all about the degree of democratic governance. Sure, a referendum on fiscal issues is inherently absurd (because taxes are not a binary matter of YES-NO) and it is even unconstitutional in Greece (and in Italy), but a general address referendum on the Euro is useful if reforms are to be carried out with the people and not against them. As Chatzistefanou and Kitidi have put it, the birth country of democracy has now shifted to debtocracy. Politically, Italy is following exactly the same path, even if economically it is still not in the same mess.

Over the Summer, the European Central Bank sent two confidential letters to the Spanish and Italian governments, stating the conditions for its intervention in defence of their sovereign bonds. Now, creditors do have the right to set conditions, but those letters went much further than anything creditors can ask. They even included the requirement of constitutional reforms, violating this core of democratic sovereignty. And they included labour market liberalisation measures with no link to public debt and with no evidence of economic benefits – in fact, if Italy liberalises dismissals, Fiat will save a lot of money when shutting its factories down, but unemployment and public expenditure will go up. In Bruno Amable’s words in today’s Libération, this is new European absolutism: replacing elected democracy with neoliberal bureaucracy.

Last Friday, it was the round of the European Commission to send a letter to the Italian government, setting up, with an insultingly arrogant tone that I would never be allowed in my feedback to even the worst students, 39 corrections or additions to the plan Berlusconi presented in Brussels last week. I am not defending Berlusconi: he really made a fool of himself denying that Italy is in any crisis (given that ‘restaurants are full’) and even recycling measures already passed or promised in the past. I am not defending any national honour – that has been destroyed by Berlusconi before the EU. But the tone of the letter, asking for full responses within a week (!) and thereby factually keeping him in power for longer shows who has the power now. It is not Berlusconi, in advanced state of decomposition. The Italian centre-left, which is pleased by the EU’s and the markets’ treatment of Berlusconi, has nothing to be pleased about. It may have to deal, soon, with a much more difficult opponent than Silvio – maybe, we will miss the times when we had such an easy opponent as him.

Not all is lost. As Philippe Schmitter said at last week’s conference on the public realm in honour of Colin Crouch, there are still elections, and governments still lose them. Italy and Greece (and Slovakia) will have elections soon. But unless we rebalance, globally, the powers between creditors and debtors (in the old language, between rich and poor), and European institutions remain unelected, those elections will not matter much.

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