Even so Berlusconi nearly wrecked it: openly criticising his finance minister Tremonti, and concealing in the text of the budget wording which would have allowed one of his companies to delay payment of a court judgment in the amount of half a billion. It is almost as if Silvio realises that he has done little or nothing for his country and that at this late stage there is nothing he can do anyway, except save himself.
The trick when facing a debt crisis is to make a successful issue, to show people you still can borrow, and steady the ship. The Bank of Italy did just that, but had to pay an extra 1% per annum, almost at the level where it cannot afford to service its debt.
The budget amounts to saving some €48 billion (a bit more than originally planned) with 80% of it coming after the elections. It involves removal of some tax breaks, taxes on investment portfolios, raising the pension age, higher charges on the health service and some streamlining of local government.
At the same time il Sole 24ore, Italy’s equivalent of the Financial Times, published its own proposals, based on denationalisation. It has not met with much approval in the rest of the press, but I think il Sole is correct. Both budgets are criticised for not promoting growth but in my view people are missing the point with regard to il Sole’s attempt.
When occasionally I am asked by an Italian what is wrong with Italy (they mean financially; everyone agrees the ice cream is brilliant), I say ‘the State is too big and the individual is too small’. Of course there must be cutbacks and of course there must be revenue raising. But the State is too big not just in terms of monetary aggregate. It is too big in terms of power.
The elite, who control the massive state apparat, live in a different world to the rest of Italians. By the elite I mean not just the politicians but their hangers on, their families and also the world of organised crime which they allow to exist (with occasional culls to show they are on the side of the angels). There have been mumblings for years, mainly about little things. I mentioned here that one senator had proposed they have free ice cream on hot days. I mentioned in May last year that there are 629,000 Auto Blu, government sponsored cars.
Then Sergio Rizzo and Gian Antonio Stella, two journalists from the Corriere della Sera, published a book called La Casta, detailing a myriad instances of institutionalised abuse of power. It is no great literary work but soon became the No.1 bestseller, in a nation which doesn’t read much. Now a blogger writes of ‘the caste of Montecitorio’ (the parliament building) where he used to work. Amongst other things he notes that politicians, as well as being able to drive round Rome without being done for parking, speeding or whatever, can nominate several other cars for this privilege. Wives, mistresses, friends.
It is noteworthy, and at last has been noted by the press, that the politicians have passed separate legislation excluding themselves, their families, their pensions from the austerity imposed on the little people.
The Italian political elite are doing each other favours and granting each other concessions at the expense of the taxpayer. And this is why Il Sole 24 Ore’s contention is right. Italy will have no growth while these parasites cream off the surplus for themselves. The sooner all state holdings, all state land, all property of the parastate (eg bank foundations built on the back of tax breaks) are sold off, the sooner power and influence will be taken out of the hands of the elite, and the economy can grow.
That is what Italy needs, not Tremonti fiddling with how much poor people have to pay their doctor. It needs a free economy and it needs growth. It may have to leave the euro anyway if the markets get nasty, but it will certainly have to leave within five years if no one wakes up to the corrupt sclerosis at its heart.
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