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Five Star Movement

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Italy: “I Say No”

“Today saying No is the most beautiful and glorious form of politics….Whoever doesn’t understand that can go screw themselves.” It could have been Donald Trump before the US election two weeks ago, or Boris Johnson during the Brext campaign in Britain last June, but it was actually Beppe Grillo, founder and leader of Italy’s populist Five Star Movement.

Grillo unhesitatingly compares his movement to “Trumpismo” in the United States, and the Five Star Movement (M5S) is currently running neck-and-neck with Prime Minister Matteo Renzi’s Democratic Party in the opinion polls. Moreover, if Renzi loses the referendum on changing the Italian constitution that takes place this Sunday, there may be an election in Italy quite soon.

Matteo Renzi wanted to replace the elected Senate with a smaller appointed body and make other changes to streamline the process of passing laws in Italy. He got his proposal through both houses of parliament last April – but with such a slim majority that the results had to be confirmed by a referendum. At the time Renzi was confident that he would win it easily.

But that was before the Brexit vote in the United Kingdom and the irresistible rise of Donald Trump in the United States put wind in the sails of the Five Star Movement. Now the M5S’s “Io Dico No” (I Say No) campaign is drawing huge crowds as it tours Italian cities, and the final opinion polls before the vote on 4 December gave the “No” a five-point lead in the referendum.

As the polls began to turn against his constitutional reforms, Renzi warned that he would resign if the vote went against them. But all that did was to turn it into a referendum on his own popularity, which is turning out to be considerably less than he imagined. And if M5S comes to power, it is pledged to hold another referendum – this time on pulling Italy out of the euro “single currency”.

At the moment a large majority of Italians still want to keep the euro, but that could change. Italian cities don’t look as devastated as the US Rust Belt, but the same processes that brought Donald Trump to the presidency have been at work in Italy. Average family income is still less that it was before the 2008 crash, and unemployment among the young is close to 40 percent.

An estimated quarter of Italian industry has closed down in the past decade, and the country is staggering under the burden of a public debt that amounts to 132 percent of GDP. If uncertainty about the euro crashes Italy’s economy (the third-largest economy in the Eurozone), then all 19 countries that use the euro, some 340 million people, are in deep trouble.

And the Italian economy could go belly up, because Italian banks are now as vulnerable as American banks were before 2008. They are stuffed with “non-performing loans” that have not been written off, but stay on the banks’ books at around 45-50 percent of their original value. But they are really only worth about 20 percent of the original price.

If Italian banks marked these loans down to their true market value, it would wipe out their capital and they would all go bankrupt overnight. It is an accident waiting to happen – and a “No” victory in the referendum could be that accident, because it might open the Five Star Movement’s road to power.

In theory, it’s a long road from a “No” in Sunday’s constitutional referendum to an M5S government and a referendum on the euro. If Renzi resigns, and if no other combination of parties in parliament can form a government (probably not), there would be an election. But then M5S would have to win a majority, which is a long way from its current 30 percent support.

In practice, it might be quite a short road. A lot of Italians are so angry that they just want to punish “the elites”. If both M5S and the right-wing Lega Nord (which also wants to quit the euro) did well in the election, they might be able to form a coalition government, and then the fat would be in the fire.

Technically, only the single currency would be at risk, but in the current febrile atmosphere in Western politics, with support for populist parties surging everywhere, things can change very rapidly.

It is no longer inconceivable that the National Front, which wants to leave not just the euro but the European Union, could win the French presidential election in April. With Britain on its way out, a French government that wants to follow suit, and an Italian government that
at least wants to leave the euro, the entire 60-year-old project of European unity could crumble by the end of next year.

That’s a lot of ifs, and the likelihood of such a calamity is still very small. But we do live in interesting times.
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To shorten to 725 words, omit paragraphs 8 and 9. (“And the…power”)

Italy: Grillosconi Wins

28 February 2013

Italy: Grillosconi Wins

By Gwynne Dyer

The winner of last week’s election in Italy was a mythical beast called “Grillosconi”. That is bad news for Italy, for the single European currency, the euro, and even for the future of the European Union. Not that “Grillosconi” will ever form a coherent government in Italy. The problem is that he – or rather, they – will prevent anybody else from doing that either.

The newer part of this hybrid beast is Beppe Grillo, a former stand-up comedian who is essentially an anti-politician. His blog boils with bile against Italy’s entire political class, and his public appearances are angry, foul-mouthed, arm-waving rants against the whole system.

Raging against Italy’s privileged, corrupt and dysfunctional political class is a perfectly reasonable thing to do, but Grillo’s Five Star Movement, which in just a few years grew from nothing to take a quarter of the national vote in last Sunday’s election, has nothing useful to put in its place. Just “throw the bums out”, and the democratic power of the internet will solve all of Italy’s problems.

“We want to destroy everything,” Grillo said in a recent interview with the BBC. “But not rebuild with the same old rubble. We have new ideas.” We have heard this sort of talk in Europe before, always from people who turned out to be totalitarians of some sort, whether Communist or fascist. It should not be necessary for Italy to go through all that again.

The older part of the beast is Silvio Berlusconi, the former cruise-ship crooner and billionaire media magnate (he’s the richest man in Italy) whose cynical populism has dominated Italian politics for the past twenty years. For more than half of that time he has been the prime minister, and even when he’s out of power he dominates the political stage.

Berlusconi is 76 now, but he still manages to generate constant sex scandals. (His “bunga bunga” parties are notorious, and he currently faces charges in connection with an under-age prostitute.) He has been fighting charges or appealing against convictions for corruption for the whole time he has been in politics, and keeps changing the criminal law to avoid doing jail time. Yet a large number of Italians go on voting for him.

Their devotion is even more inexplicable when you recall that Italy has been in steady economic decline for most of Berlusconi’s two decades as the country’s dominant political figure. The Italian economy is smaller than it was twelve years ago, over a third of the under-25s are unemployed, and the state auditor estimates that 60 billion euros is stolen from the national budget by corrupt politicians every year.

So 29 percent of Italians voted for Silvio Berlusconi’s party in the election last weekend, and 25 percent voted for Beppe Grillo’s. More than half of Italy’s voters preferred some part of the “Grillosconi” monster to more serious politicians who talked about fixing the economy, tackling the budget deficit, fighting organised crime, and reforming the country’s badly broken justice system.

The result is political paralysis: no party or group of parties is able to form a stable government, and there will probably be another election within a year. (Only one Italian government in the past seven decades has served out its full five-year term.) But why should we believe that that will produce a better outcome? Grillo confidently predicts that his Five Star Movement will win a majority next time round, and he may well be right.

Berlusconi promises to bring back the good old days with a wave of his magic wand: 4 million new jobs, tax cuts, and even refunds for taxes paid in the recent past. But you have to shut your eyes to the financial disaster that is engulfing Italy to believe that, and it will be even harder to do that a year from now.

Grillo promises salvation in a fantasy future where everything happens on the web, but he’s really just getting the protest vote. Even he admits that “the (Five Star) Movement is a dream of what could happen in 20 or 30 years. Not now. Now, nothing will happen.” So why would anyone look to him for a solution to today’s pressing problems? Good question.

Meanwhile, the Italian economy continues to decay, and the government goes on spending money it does not have. One number says it all: about 70,000 Italian public officials are given cars with chauffeurs. (In Britain, the number is 300.) The risk grows that Italy will need a financial bail-out so massive that it causes a collapse of the euro.

Why so many Italians put up with this kind of thing passes understanding. But so does the fact that so many of those who are infuriated by it turn to a clown like Grillo, who offers salvation in the form of a web-based direct democracy. The crisis will therefore continue indefinitely.

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To shorten to 725 words, omit paragraphs 10 and 11. (“Berlusconi…question”)