reflections

Oct 14, 2015 | 23:41 GMT

6 mins read

How Meaningful Are Italy's Political Reforms?

(Stratfor)
It can be difficult to separate the important from unimportant on any given day. Reflections mean to do exactly that — by thinking about what happened today, we can consider what might happen tomorrow.

Italian Prime Minister Matteo Renzi is exultant. On Wednesday, he told the Italian Parliament that Rome had the right stance on the refugee crisis all along, unlike the rest of the European Union, which failed to see the complexity of the problem. His mood was boosted the previous day, when the Italian Senate passed a reform that will reduce its own powers and concentrate most of the legislative process in the lower chamber. By doing this, Italy will abandon its so-called perfect bicameralism, according to which the two chambers have equal powers.

This is the third large institutional reform that Renzi's government has passed in 2015. Earlier this year, Italy approved a new electoral law, according to which parties winning 40 percent of the vote are automatically given a majority of seats in the legislature. More recently, Italy also approved a constitutional reform that clarifies a previously ambiguous division of attributions between Rome and regional governments and gives the central government exclusive powers to legislate on issues such as energy and public infrastructure.

The three reforms should be considered part of a strategy to consolidate stronger and more stable central governments. Before the reform, Italy was one of the few European countries where a new government had to be ratified by two legislative chambers that, to make things more complicated, had the same powers but were elected by different mechanisms. Under this system, the 2013 general elections put the center-left in control of the lower chamber and the center-right in control of the Senate, making it impossible for either faction to appoint its candidates for prime minister.

In the weeks leading to the vote in the Senate, lawmakers opposing the reform accused Renzi of trying to build an authoritarian system. This debate is as old as Italy itself. When Italy was unified in 1861, there were two main lines of thought regarding what the new country should look like. Some argued that a country as geographically and culturally fragmented as Italy should have a decentralized system, so that the recently reunited political entities would have greater autonomy. Others argued that a strong central government was needed to build a national economy with national infrastructure, administration and rules. The latter position won the argument, and the Kingdom of Italy began as a deeply centralized state.

After World War II, Italy tried different political systems to keep the country together and prevent a new fascist government from emerging. Several electoral laws were introduced, most of which pivoted around different types of proportionality and often led to unstable governments. Italian regions were given more autonomy, especially those — such as the country's islands and the regions close to France and Austria — that were seen as potential cradles for secessionism. In many ways, Renzi's reforms go in the opposite direction.

Of course, reforms are no small feat in Italy. They are often hard to pass and even harder to enforce. Renzi was probably wrong when he said that within a decade Italy will be a European power comparable to Germany, but in less than two years the prime minister has managed to introduce reforms in core areas of Italy's political system, as well as in labor legislation.

Despite criticism about the way the prime minister handled the reforms, Renzi's ideas are not original. The United Kingdom and France have centralized systems with strong executive powers. More important, a stable government does not necessarily mean an effective government. Most of the resistance to Renzi's plans for reform did not come from the opposition but from within the ruling Democratic Party. And as France clearly exemplifies, even the most centralist government will still encounter difficulties in passing legislation in a country with strong vested interests and combative corporations.

Unlike France or the United Kingdom, however, Italy has an additional problem: the enormous disparity in economic development between the country's north and south. One of the main difficulties for the European Union is reaching common policies for a Continental bloc that includes economically disparate countries such as Germany and Greece. Italy's problem is that it includes regions like Germany and Greece within its own borders. Gross domestic product per capita is more than 40 percent lower in the south than in the center and north, and unemployment is twice as high.

These divisions affect policy priorities. Northern Italy demands more access to European markets, more autonomy and lower fiscal pressure. Southern Italy demands protection and subsidies. Conservative forces in the north desire more divisions in government fiscal functions — which could consolidate the differences rather than erase them — while southern Italy depends on a welfare system that is becoming harder to sustain. In broad terms, northern Italy wants less state, while the south wants more. These conflicting demands will continue to limit Rome's room for action, regardless of its stability.

Institutional reforms will also be undermined by the fact that Italy's justice system is slow and often politicized. Moreover, organized crime, which was once confined to the south, operates throughout the country and beyond. The mafia organizations have moved beyond drug trafficking and prostitution to include activities such as transport and public health. The Mafia Capitale scandal, in which alleged crime organizations misappropriated money destined for city services in the city of Rome and the region of Lazio, is only the most recent case in a long list connecting public officials with criminal organizations.

Finally, despite Renzi's reforms, Italy's recovery is still weak, unemployment is high and some sectors of the economy are still uncompetitive. Thus, popular support for the euro in Italy is among the lowest in the European Union, creating fertile ground for the emergence of Euroskeptic parties. The right-wing Northern League and the anti-establishment Five Star Movement are dealing with internal problems that prevent them from taking advantage of the situation, but Italians' skepticism about their ruling class and the benefits of EU integration opens the door for political forces to rise and challenge the status quo.

A century and a half after its unification, Italy is still looking for the right political system to rule a country that is often perceived by locals and foreigners as ungovernable. At some point in 2016, the Italians will have to express their opinion on the Senate reform in a referendum. If approved, the new institutional framework will somewhat reduce, but not completely abolish, Italy's perennial political fragility. The decision-making process will probably be simpler but not necessarily more effective. Italy's institutional changes at the top of the political system will have only a limited impact at the middle and lower levels, as inertia, vested interests, regional divisions and conflicting priorities will continue to weaken their effect.

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