News Release

Italy: Run by the European Central Bank?


ANTONIO TRICARICO, (in Rome) atricarico at
Tricarico is coordinator of the Italian NGO CRBM (Campaign for World Bank Reform) based in Rome and has been the economic correspondent of Il Manifesto at several international summits. He was recently at the G20 Summit in Cannes. Tricarico said today: “The Berlusconi era is finally coming to an end, but the economic legacy of his government’s decade will stay for a long time. A new coalition government, likely based on the principle of national unity, is set to guarantee the implementation of harsh austerity policies non-democratically imposed by the European Central Bank and the European Commission — and more recently by the IMF in Cannes. This would be a tragedy for Italy, leading to depression and a crisis of its banking system.

“The time has come to question the responsibility of the European Commission, the European Central Bank and the German government in taking Europe to the brink of the collapse. These institutions have forged a wrong economic integration of Europe centered around an export-led model, at the disadvantage of those weaker economies in the EU not able to compete with Germany and forced to accept the German trade and financial surplus. This has been coupled with the implementation of strict fiscal and monetary policies for supporting a ‘strong’ Euro, which in turn produced higher public and private debt in the periphery countries.

“Greece might leave the Euro, but Italy is too big too fail for the Eurozone. So the Euro is at risk and might even collapse, but also the whole EU project based on regional solidarity risks dying as well. As was true 50 years ago, new visionary thinking reclaiming public finance and public policies is needed, starting with the reform of the European Central Bank and its policies.

“In this emergency situation it is necessary to restore capital controls and introduce financial transaction taxes in Europe, while mobilizing national and regional resources to support the economy and prevent a collapse of the banking system. It is inevitable that some banks under stress should go under public control and this should be used as an opportunity to restart the economy as well as to promote a public debt audit to expose who benefited and who lost from the Euro and its management failure. This would be the first step in reviewing the Euro architecture. Saving the EU project through solidarity action should come first rather than saving the Euro just for the sake of financial markets.”

Engel-Di Mauro is editor of the book The European’s Burden: Global Imperialism in EU Expansion, associate professor of geography at SUNY New Paltz and editor of the journal Capitalism Nature Socialism. He said today: “For the many in Italy, especially those that are young or are denied basic political rights (such as immigrants), the fall of Berlusconi will mean little to nothing, as it will not change their life of precarious employment, meager wages and general social marginalization. …

“Unable to garner internal agreement over how to slash public funds, the Berlusconi government is now teetering more than ever on its way towards implosion. Nov. 15 might signal the end of the Berlusconi leadership if ‘stability package’ budget cuts are not approved. This could mean the assertion of a technocratic interim government with early elections. Such an unelected body would likely pass all sorts of unpopular measures that would then undermine any subsequent government attempting to redistribute wealth, as happened under Dini and Amato in the 1990s. In part this situation is due to power struggles internal to the coalition ruling parties (made up of straightforward misogynists, racists, homophobes, crypto-fascists and free-marketeers), including over the fate of Berlusconi, and in part because of a lot of outside pressures from large domestic and foreign businesses.

“The latest financial speculation on Italian government bonds is the most recent manifestation of pressures by large foreign and domestic investors (hedge funds, banks, etc.) to force extremely unpopular cuts in public spending through extra-parliamentary means. Some such measures had been introduced and approved this summer in the Senate, under pressure from a secret letter from the European Central Bank, but they could not meet with final approval of all ruling coalition parties, especially with respect to the issue of pensions.

“The many protests and strikes that have occurred over the past four to five years, due to threats to social spending or cuts that have been implemented, have had almost no representation through opposition parties. These are largely preoccupied with showing a moderate or centrist face so as to ensure votes (in the face of business class extremism and police brutality). In the past, such parties, while in government, promoted or enacted right-wing legislation (much as Clinton did for the U.S.) that enabled right-wing parties like those in Popolo della Libertà to become as influential as they have (this includes enabling Berlusconi to retain media and financial corporate monopolies throughout his political career).

“The lack of political alternatives and waning standards of living have only disaffected more people from mainstream politics (which could be a positive effect) and have exacerbated mounting tensions, many of which blew up in the Oct. 15 protests in most major Italian cities. The rush to further reduce an already low level of welfare provisions (Italy, among the wealthiest countries in the world, is below the EU average in welfare provisions) makes it all the more painfully obvious that the large public debt has more to do with serving corporate interests, through such mega projects as the Val di Susa high-speed train and the expansion of military interventions (including bombing Libya), than with serving social needs.”