Romano Prodi's victory in last month's Italian elections saw the end of one of Europe's most hated right wing governments. But, asks Chris Bambery, can the coalition that beat Berlusconi stand up to the pressure for neo-liberal 'reform'?
The narrow victory of the centre left in last month's Italian elections has served to revive ruling class fears about the future direction of Europe's core economies. While the narrowness of the victory has mainstream political commentators rolling out the usual stereotypes and chuckling, "How typically Italian," the apparent inability of Italy's political classes to force through a package of neo-liberal reforms to the electorate has made right wing "Anglo-Saxon" economists apoplectic with rage and led them to forecast a collapse of the economy.
In the end it came down to the votes of Italians living abroad to decide the outcome of the election. Their votes unexpectedly gave Unione, the centre left coalition, the narrowest of majorities in the Senate - unexpectedly because the outgoing government had given émigrés the vote believing they would vote for the right.
Mirko Tremaglia, the minister responsible for the émigrés, sums up everything that was hated about the Berlusconi government. As a young man he had volunteered to fight for Benito Mussolini in the final two years of the Second World War. Now a member of the "post-fascist" National Alliance, Tremaglia did not seem so keen to ditch his past, declaring, "If Il Duce's Italy had won the Second World War it would have been good." Among the 40 million Italians at home who voted, the gap between the centre right and the centre left was just 25,000 votes. Italy was split down the middle. The Italian daily La Repubblica's assessment of the result was that it would lead to paralysis: "It is as if Italy has been stung by a poisonous scorpion - it cannot build a new government, but it also can't keep the old one. It is perfect metaphor for Italy."
Romano Prodi, the new prime minister, began his political career in the centre right Christian Democrats and was president of the European Commission from 1999 to 2005. He ran a lacklustre election campaign that almost allowed Berlusconi to rescue his, which had threatened to self-destruct.
In the former industrial heartland of Northern Italy, and above all in Lombardy, the region centred on Milan, the left lost - their traditional support base declining as new industries have replaced the old. Their votes were best in central Italy (including the old Communist heartlands of Emilia-Romagna and Tuscany), Umbria, Lazio including Rome, the Marche and parts of the south and the islands (the Basilicata, Sardinia and Calabria). The victory in the Basilicata came after a successful popular campaign two years ago against nuclear waste dumping, which combined with a successful strike at a nearby Fiat plant which paid wages lower than in the north. These successful struggles had the effect of increasing the vote of the left. It was a textbook example of how political, ideological and economic resistance to neo-liberalism could fuse together.
Today the US and British financial press call Italy "the sick man of Europe". Yet just two decades ago the Italian treasury minister announced that Italy had overtaken Britain to become the fifth largest global economy. Nigel Lawson, the chancellor in Margaret Thatcher's Tory government, was incandescent with rage. His was a government proud to boast that it had seen off the trade unions and halted Britain's long term economic decline. Now the pride with which the Italian government and media trumpeted their success seems long gone.
Italy has a budget deficit which breaks the conditions upon which it joined the euro. Many of its core industries, including textiles, clothing and shoe manufacture, and ceramics, are finding competition from Eastern Europe and China increasingly difficult to deal with. In March the Organisation for Economic Cooperation and Development (OECD) warned that Italy may be excluded from the G8 meetings of the leaders of the eight richest countries in the world (excluding China) because of its poor economic performance.
Globally Italy is the third biggest borrowing nation. The International Monetary Fund is urging that the new government deals with public finances, because Italy's public debt is more than 107 percent of its gross domestic product (GDP) compared to Britain, where the public debt is 42 percent of GDP. One Financial Times columnist to warn of "an Argentinian-style debt default". For 14 out of the last 15 years economic growth has lagged behind the European Union average. Last year Italy recorded zero economic growth.
The fact that a quarter of Italians receive pensions indicates an obvious target for the advocates of the European equivalent of a structural adjustment programme. The OECD factbook for 2006 estimates that by the year 2020 there will be 11 pensioners for every nine workers in Italy. In Britain there will be just two pensioners for every three workers. Such statistics will be used by the ruling class as a pretext for an assault on workers and their pensions.
Italy's bosses genuinely fear that their economy is going into nosedive. For example, while Germany's exports rose in the five years up to 2004, Italy's fell. Thus Prodi's new government faces demands for root and branch "reform". However, contrary to some British media representations of lazy workers being the cause of Italy's woes, labour productivity in Italy is above the European Union average and compares well to Britain. Traditionally Italy would have devalued its currency to try and reduce the cost of its exports, but since January 2002 its currency has been the euro, which the Italian state does not have the authority to devalue. As a result, sections of the right, beyond the traditionally anti-EU regionalist Northern League, have raised the idea of Italy quitting the euro.
The Financial Times caused consternation in Italian ruling and business circles by suggesting that financial speculation might force Italy out of the euro, and this was widely seen as a green light for those who want withdrawal.
While both the international and Italian ruling classes are in agreement over the need for an aggressive programme of wage reductions, productivity rises, deregulation and privatisation, combined with welfare and pensions cuts, it is a strategy that is continually rejected by the majority of Italians. The Italian ruling class is desperate for a "Thatcher figure" who will do battle for them. Therefore you would be forgiven for thinking that supporters of the free market would line up behind Italy's richest man, Silvio Berlusconi, as he sought re-election. But he was widely regarded as having failed to go on the offensive, preferring instead to pursue his personal interest in fighting off corruption charges.
Some sections of the ruling class are extremely enthusiastic about the alternative of Romano Prodi. Interviewed by the BBC a week before the elections, Prodi argued that Italy had to "liberalise and privatise" and pointed to his own record of achieving that as EU commissioner. Some sections of the business class, who showed no enthusiasm for either Prodi or Berlusconi, are arguing for a grand coalition to "implement economic reforms that were inconceivable under any other political constellation". This leads many political commentators to predict that Prodi's coalition government will fall apart. The assumption here is that if Prodi moves to implement a full-blooded neo-liberal agenda, just as he did in the wake of the 1996 elections, the left will have to break with him - and thereby open the door to such a coalition.
In 1998 Prodi was the prime minister in the government of the left that took Italy into the European Monetary Union (EMU). In order to meet the economic criteria demanded by Brussels, Prodi presented a budget of austerity measures that included an assault on pensions. The measures were greeted by a wave of strikes. Those, together with the government's decision to back the US-led war in former Yugoslavia, led Prodi's radical coalition partner, Rifondazione Comunista, to quit the government, and ultimately caused the collapse of the centre left government. In the end, Italy joined the EMU only when it relaxed its rules and accepted Italy's budget despite the fact that its figures bore very little relation to reality.
In the wake of this election, Rifondazione's leader, Fausto Bertinotti, has gone out of his way to denounce talk of a grand coalition. In truth it would be difficult to construct such a thing. The golden boy of the Anglo-Saxon evangelists is Gianfranco Fini who is seen as a model neo-liberal, but he heads the National Alliance. The strength of anti-fascism in Italy would mean there would be an explosion if anyone in the Unione coalition made overtures to Fini.
In all likelihood Prodi will head a government containing the bogeyman of the neo-liberals - Rifondazione Comunista.
Rifondazione emerged from the dissolution of the million-strong Italian Communist Party in 1991 following the fall of the Berlin Wall. A majority voted to launch what is now the Democratic Left (DS), which is the biggest party in the Unione coalition. At first, Rifondazione was portrayed as an ageing Stalinist rump, but after exiting the Prodi government in 1998 Fausto Bertinotti took over as head of the party, and steered it in a more radical direction by linking it to the emerging anti-capitalist movement.
Berlusconi returned to office in April 2001. On 20 July, just hours after Italian police guarding the G8 summit in Genoa had killed protester Carlo Giuliani, Bertinotti argued for an Italian-wide mobilisation as a response. He repeated that call on national television hours later. Rifondazione ensured that within hours 300,000 Italians defied all sorts of obstacles to march in Genoa the next day, and then helped organise protests across the country over the next days. The party threw itself into an exciting two years which saw three million Italian trade unionists march in Rome against Berlusconi, six nationwide one-day general strikes, and a turnout of 100,000 at the first European Social Forum in Florence, culminating in a march of a million and a half against the coming Iraq war. In February 2003 over two and a half million Italians joined the global day of protest against the war.
Today, the party has some 80,000 members, the vast majority of whom joined after the demise of the old Communist Party. Umberto Oreste, a member of the party's federal bureau for the Naples region, points out, "We got around 10 percent of the vote in Naples. We have 100 branches across the region with 5,000 members. In aggregate we are a strong force." But while throwing itself into the movement, Rifondazione has stressed it is "non-ideological", meaning it does not intend to hegemonise or dominate it. Its youth wing has increasingly merged into the autonomist movement, which stresses direct action and eschews parties.
In the last two years Bertinotti has steered the party back into a coalition with the centre left, arguing that a victory for Berlusconi would damage democracy in Italy. At the party conference last March, he won a majority to continue this policy. This decision flowed from a widespread pessimism that after the monster protest marches and strikes, Berlusconi remained in office and that the only way to remove him was to vote him out. It would have been possible for Rifondazione to refuse the invitation to join the Unione coalition, instead supporting a centre left government from the outside - but this path was rejected. The consequence of this is likely to be the loss of a certain amount of independence of action, and increased pressure for Rifondazione to toe the line of the new government.
During the period running up to the elections the trade unions went into semi-hibernation. The left failed to build the demonstration against the occupation of Iraq on the worldwide day of action on 18 March this year. At the last minute Italy's biggest union, the CGIL federation, even withdrew its support and stopped the transport it was funding. Nevertheless, over 50,000 people marched in Rome. This pessimism also extended to the Disobbedienti movement. They have come to accept the idea that revolution is not achievable, or even desirable, and instead aim to create liberated zones free of capitalist domination.
In the wake of the elections Rifondazione proudly declared, "Our party has increased its vote everywhere, in terms of both percentage and absolute number of votes - from 5 percent achieved at the 2001 election to 5.8 percent in the lower house and 7.4 percent in the upper house. 41 MPs will represent our party in the lower house (up from of 11) and 27 senators in the upper house (instead of three). This is the largest parliamentary representation ever achieved by Rifondazione."
On election night Bertinotti appeared on Italy's main current affairs programme and warned against the new government pursuing full-on neo-liberal measures. A Democratic Left politician rounded on Bertinotti, demanding that he keep his house in order. It was a marker of faultlines in the Unione coalition. Cofindustria, the Italian bosses' organisation, pleaded with the new government for the laws that allow employers flexibility when sacking workers (known as law number 30) to be kept intact, saying they are vital to kick-start Italy's stagnant economy. Bertinotti responded with a call for an "essential, profound reformism". He stressed that a "fight on precarious employment is the [Unione] manifesto's hallmark. Hence our close focus on how the new government is going to move on this issue. It is a fact that the manifesto explicitly quotes superseding law number 30."
All of this suggests that Rifondazione is serious about setting boundaries for its involvement in the Unione coalition, which if crossed could result in the party breaking ranks, just as it did in 1998. The question is, when the pressure is on will they stick to their guns?
The two biggest parties in the Unione, the Democratic Left and the former Christian Democrats of the Margherita party, are advising caution. Tiziano Treu, a member of Margherita, dismissed a call from CGIL to scrap law number 30 as "an ideological outburst". Meanwhile the La Stampa newspaper reported that Prodi is expected to pick former European Central Bank board member Tommaso Padoa-Schioppa as minister for the economy because his "economic expertise" would be favoured by international markets.
Italy has the largest left in Europe, and between 2001 and 2003 it saw the biggest mobilisations of the social movements and trade unions. Across the country there are hundreds of thousands who took part in those mobilisations. Professor Gianmario Anselmi, professor of Italian studies at Bologna University, describes students in Italy as being politically "orientated on the centre left, or even further left. Many have strong views on peace and the environment. The young appear to be anti-war in general, not just against the Iraq war. But they are not Marxists in the classical sense."
He touches on a real problem. The old Italian Communist Party was, in its post-war prime, a force engaged in a long evolution from Stalinism to traditional social democracy. From 1944, when it led the anti-fascist resistance, it stressed its commitment to parliamentary democracy and the Italian constitution. But the party also created a wider, if bowdlerised, Marxist culture.
That has increasingly faded. It means there is very little anchoring down of the movement in terms of ideas. As a result there is an acceptance of a sort of liberal eclecticism, the idea that "anything goes", and a suspicion not just of political parties but any attempt to map out strategic and tactical priorities. At Rome's La Spazienza University, the centre of a massive student movement before Christmas, the Rifondazione branch has increasingly found itself challenged by autonomists who have profited from a sense of disquiet with the party's overall electoral stress.
All of this has blunted the emergence of an alternative to Rifondazione's leadership's decision to join the Unione. At last year's congress the opposition to Bertinotti largely came from those who had denounced the stress on taking part in the movement at the time of Genoa, and who couched their opposition in arid Stalinism, rather than those who coupled opposition to entering a Prodi government with a continual stress on the centrality of opposing neo-liberalism and war.
Across Rifondazione, the unions, and the anti-war and "no-global" movements, the creation of a debate drawing on the classical Marxist tradition is urgently needed. That is linked to building a current within Rifondazione which combines being immersed in these wider movements with opposing many of the social and economic policies that Prodi will pursue. Bertinotti has recently stood down as party secretary of Rifondazione after he won the position of chairman of Italy's chamber of deputies (the equivalent of the speaker in the House of Commons). The debate over Bertinotti's successor can heighten debate in the party as members begin to question Rifondazione's presence in a Prodi government.
Decisive issues also loom. Soon there will be a vote on removing Italian troops from Iraq, then on spending more on the growing Italian military presence in Afghanistan (which the centre left supports as "humanitarian"), and then on the promise that Unione made on repealing law number 30. Any backtracking on these questions will greatly increase the tempo of debate within Refondazione. In order to maintain itself as the centre of the Italian radical left, the party must urgently reconsider itself in relation to the various social movements, otherwise it will dissipate the support it gained in the wake of the Genoa protests - particularly from students and young people.
Meanwhile on the bosses' side, pessimism over the inability of Prodi to push through a full-blooded neo-liberal assault combined with the victory of the French movement against the new labour laws have spread gloom among the free marketeers. The prime minister of Luxembourg was honest when he said, "Everybody knows what reforms we need to implement, but nobody knows how to implement them and win an election afterwards." The continent-wide push for grand coalitions is an expression of the fact that parties of the centre left and centre right find it difficult to attract votes when they champion the neo-liberal agenda.
What happens in Italy will be crucial to the prospects of an emerging European, and indeed global, radical left committed to fighting war and free market policies.
Chris Bambery is editor of Socialist Worker