Italy elections an anti-austerity vote, say experts

l43-austerity-130224090542_mediumItaly‘s recent elections should be interpreted as a vote against the austerity policies being imposed by some EU countries, an Italian economic policy expert said during a panel discussion in Washington, on 18 March. “The real problem is not fiscal spending but Italy’s lack of growth,” said Domenico Lombardi, senior fellow at the Brookings Institution, speaking at the School of Advanced International Studies (SAIS). Austerity policies have caused Italy’s economy to shrink, which has increased its debt-to-GDP ratio despite the government having actually slashed public deficits, he noted. Lombardi argued that now that Italy had “made its downpayment” to its EU partners by reining in public spending, “it is time to have a more open conversation on a more balanced approach“. He suggested that Italy would find itself unable to catch up with Germany in its competitiveness unless workers’ wages in Germany were increased at a faster rate. The 24-25 February vote in Italy has triggered renewed turmoil in the EU as the party of caretaker Prime Minister Mario Monti, who has been implementing EU-endorsed austerity policies, only won 10% of the vote. The anti-austerity Five Star Movement, led by former comedian Beppo Grillo, won 25% of the vote, while former Prime Minister Silvio Berlusconi‘s centre-right alliance won 30%


Several panelists slammed the Economist magazine’s humorous ‘Send in the clowns’ front-page headline in response to the election result. Renzo Cianfanelli, senior correspondent for the Corriere della Seranewspaper, said that Grillo’s core voters were young, highly educated and fed up with Italy’s political system in which politicians are overpaid and young people are excluded from the job market. He described Berlusconi as a “brilliant salesman” but “an absolute failure as a politician“. Similarly, Carol Mershon, politics professor at the University of Virginia, said “there is nothing clownish about the Grillo phenomenon“. Mershon noted that it would be hard for a future government to pass any legislation given the fragmented makeup of Italy’s Senate and Chamber of Deputies. She predicted that a caretaker government would persist in Italy for a few months after which a new Italian president would call fresh elections.

Unusually, an official from the US State Department also participated in the panel discussion. Colombia Barrosse, who is about to take up her new post as US consul-general in Naples, described the reforms of the caretaker Monti government as “encouraging” and urged the next Italian government to continue with them. “It is important to continue reducing financial market stresses” even as Italy proceeds with pro-growth policies simultaneously, she said. Her message largely echoed the “growth-friendly fiscal consolidation” mantra that EU leaders have been embracing, most recently at the European Council, on 14 March.

Brian Beary – Europolitics.info


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