Italy Gets A Government

It is perhaps an unpleasant fact, but if any political party in power anywhere had a clue how to restore growth, employment and drive-down public debt and deficit, it would have done so by now. As a consequence, parties of the left, the right or centrist parties has almost universally been dumped from power by a frustrated electorate as soon as they get the chance.

In Italy, a technocrat, unelected government was brought down when Silvio Berlusconi’s People of Freedom Party (PDL) withdrew its support, forcing an election. The outcome was that the technocrats garnered about 10% of the vote; the Democratic Party (DP) emerged with the majority of the votes, but fell short of the mark required to form a government, lacking a majority in the upper house. PDL came second overall, but, then leader of DP, Pier Luigi Bersani, made it clear he would not enter into a coalition with Mr Berlusconi. The joker in the pack was a new party the Five Star Movement led by a comedian (really) called Beppe Grillo which garnered almost a quarter of the popular vote. However, his attempts to form a government did not succeed and he has refused to enter into a coalition, leaving the country adrift since the election.

On Sunday, a Grand Coalition involving DP, PDL and some technocrats was invited to form a government under the leadership of the new DP head, Enrico Letta. The new government passed a vote of confidence on Monday and now has the challenge of sorting out Italy’s economic woes. The new PM has said that the country is “dying” under austerity drives and wants to make economic growth his priority. He wants 18 months to turn the country around and has pledged to reform electoral law to avoid future impasses; reform welfare provision and to suspend an unpopular property tax. He also intends to cut the pay that MPs who serve in government receive which will probably be popular everywhere except in parliament. Mr Letta aims to get support from other EU countries for a switch of policies from austerity deficit reduction to growth promotion measures.