Articles:
Waking from the Coma: A Future for Italy

On my first visit to Italy, at the age of
18, I fell in love with the country and its amazing history almost at first
sight, as I and my friends sailed across the lagoon on the ferry to Venice.
When we returned and found our camper van had been emptied out by thieves, I
felt a little less enamoured, to say the least.

This was my
first glimpse of the split personality of a country that is expressed nearly 40
years later in the title of my 2012 book, “Good Italy, Bad Italy” and is the
theme of the new film I have just narrated for the Italian director Annalisa
Piras, “Girlfriend in a Coma”. Yet what I didn’t realize then, as a (fairly)
innocent teenager, was quite how significant Italy’s history is for the whole
of the West.

The
greatest case study, or cautionary tale, comes from Venice itself. In Medieval
times La Serenissima, as Venice is
known, became the richest and most powerful city-state in the Mediterranean. It
was run by a quasi-democratic “grand council”, made up of the merchants who
were making the city rich, an elite that was open to newcomers if they had new
ideas and new energies. But in the 14^th century the elite decided to
close its doors to newcomers, allowing in only those related by family to the
old guard, and nationalizing trading rights. The decline of Venice began with
that decision.

Italy
today is like a huge re-run of that sad Venetian story. During the 1950s and
1960s, the country was Europe’s own “emerging economy” of the period, enjoying
the third fastest average annual GDP growth rate in the world during those
decades, beaten only by Japan and South Korea. It was helped by the global move
towards freer trade and by the early European Union, but also by its own then
very dynamic society and economy.

New,
entrepreneurial companies were formed, new ideas blossomed, Italy became a
pioneering centre for design, for cinema, for fashion, and the  migration of millions of workers from
the poor South to the industrializing north provided the factories with labour
at a competitive price.

However
then old demons came back to haunt Italy. The sharp polarization, combined with
fear, between left and right that was a legacy of the fascist period of
Mussolini from 1917 until 1943, returned first in the form of a huge wave of
strikes in the late 1960s and early 1970s, and then in the deadly form of
political violence. Nearly 500 people died in shootings, bombings and other
tragedies during the decade and a half from 1970 as extremists on both left and
right fought a running battle.

As
well, sadly, as taking part in the violence, governments responded by trying to
buy social peace, first by implementing a very restrictive labour law which had
the effect of making the law courts the principal arbitrator in industrial
disputes; second by an explosion of public spending (and thus borrowing)
chiefly on pensions and a national health system.

Public pensions
became the main form of unemployment insurance, as unwanted workers were
permitted to retire early and draw pensions. But public debt became the main
Albatross around Italy’s neck as governments ran budget deficits that in
1975-95 averaged (yes, averaged) almost 10% of GDP each and every year. The
result: a pioneering crisis of sovereign debt, a foretaste of the crises now
roiling the euro zone, as Italy’s debt load reached 120% of GDP in the early
1990s and sent the country into near bankruptcy.

That financial
crisis, in the course of which the Italian lira was ejected from Europe’s
pre-euro exchange-rate system (along with the pound sterling) coincided with a
huge political crisis, as corruption investigations brought crashing down the
parties that had dominated Italian politics for the past 40 years. The crisis
brought talk of a new start, a “second republic” (to succeed the first, formed
with the postwar constitution in 1945-48) and even a renaissance. In the
interim, governments led by so-called technocrats (a professor, a governor of
the Bank of Italy, an ex-diplomat) were brought in to make reforms and give the
country a much needed “reset” before normal politics would be resumed.

It didn’t
happen. Hence, 20 years later, Italy finds itself in yet another crisis, one
that looks eerily similar. The country’s sovereign debt is, you guessed it,
120% of GDP. A mix of financial crisis and scandals brought down the
long-running government of the media billionaire Silvio Berlusconi, while also discrediting
establishment politicians of all parties. In November 2011 a technocrat, the
economics professor and former European Commissioner Mario Monti, was brought
in to stabilize the country’s finances, make reforms and give the country a
“reset” before normal politics would commence again with the elections that
will take place on February 24^th.

It is too soon
to say that the “reset”—or, to use a broader metaphor, the upgrading of Italy’s
cultural, political and economic software—will fail again. But it can be said
that progress has been slow and disappointing. Prime minister Monti succeeded
in stabilizing the public finances, but at the cost of a deeper recession than
in all other euro-zone economies except Greece and Spain. Beyond that, however,
no major reforms have been implemented—so the justice system remains painfully
slow, the labour laws still discourage hiring while leave millions of young
people on poorly paid temporary contracts, competition remains overly
restricted, too many markets are over-regulated, meritocracy remains stunted,
corruption remains rife, and the huge cost of politics and political privileges
has been left unchanged.

These tasks all
remain, for whichever coalition succeeds in forming a government after February
24^th. They should, however, have been done during the previous 20
years. Some progress in liberalizing markets was made, but not enough to stop
Italy’s GDP growth rate during 2001-10 from being the 180^th worst in
the world, just ahead of Haiti’s.

Why not?
Resistance from entrenched interest groups has been strong. Mr Berlusconi’s
entry into politics in 1994 was essentially designed to obstruct change, to
preserve his quasi-monopolistic businesses, and to ensure the old political
ways could continue. On the Left, suspicion of capitalism has remained rife,
trade-union powers have been maintained more successfully than in Germany or
even France, and the use of political patronage to build power networks and
reward supporters has helped destroy meritocracy.

The big question,
however, is why Italians have allowed this to happen. The answer in our film,
Girlfriend in a Coma, is taken from the country’s, and arguably Europe’s
greatest ever poet: Dante Alighieri. In his “Divine Comedy” of the 14^th
century, the sin he condemned most vigorously was “ignavia”, by which he meant
sloth, the failure to take responsibility, the failure to show moral courage
and to change things.

That is the
“coma” that filmmaker Annalisa Piras and I diagnose as the Italian condition:
economic stagnation, yes, but also a failure of consciousness and
responsibility, which is in effect a moral failure.

Umberto Eco, the
philosopher and novelist, adds a further explanation in the film. Italians, he
says, “do not have a sense of the State”. They had and respected a very
powerful State in Roman times but that collapsed. The only States that have
successfully replaced it since then have been the city states of Venice,
Florence and elsewhere, which produced great riches and even the Renaissance of
art, science, humanism and culture of the 15^th century, but never
achieved a set of stable, respected, still-less national institutions.

To get Italy out
of its coma, its second crisis of 20 years, new governments will have to work
hard to fix that problem. To make sure they do so, Italians will need to shed their
ignavia and to become more active and demanding—not in their sectional or local
interests, but the national interest.