Revamping Italy

Berlusconi and the European Union

Andrew J. Fitch
June 26, 2008

For many of us, Italy is a country of beautiful architecture, beautiful food and wine, and beautiful lifestyles. However, although people in other Western nations have been emulating Italian style for centuries, this fine country is in a period of stagnation, even downturn. Italians and global critics alike believe that Italy is in the economic, political and social doldrums: 

 

Italy's prosperity has been plagued by a variety of troubles for decades.

 

The mafia has significant influence on the country's southern regions.

 

GDP growth, already very low, is forecasted to decrease.

 

The country has an enormous debt of €1.9 trillion, with no reduction in sight.

 

Of course, not everyone shares this gloomy outlook. Dr. Simon Hix, one of the foremost scholars on the European Union (EU), maintains that ‘It's a myth that Italy is way off. It's not,' he said. ‘Italy has been quite a core player .' Also, Italy is not the only EU member state to experience such problems. Portugal, Hungary and Greece are having trouble reducing their high public debts as well. However, in spite of Hix's assurance, there is no denying that Italy is indeed lagging in certain policy areas.

 

There is, however, an opportunity to reverse the trend. Berlusconi, back in power as president of the Council of Ministers, has the political backing of a strong majority coalition, which means that things can get done. At the same time, the European Union is pressuring the government to make changes the country will need to regain its social and economic well-being. With European Union coaxing and direction, the Berlusconi government could lead the country to a better future.

 

EU law supersedes national laws of the member states. Thus, when a member state violates an EU law, it receives warnings and is subject to eventual action that can force compliance. Dr. Caterina Paolucci, academic coordinator of the James Madison University in Florence, describes the EU as an external watchdog, ‘promoting countries to be virtuous by its mere existence and by its constant pressure.'

 

The EU is pressuring the new Italian government to make policy improvements in three key areas: the garbage crisis in Naples, immigration and debt. If Italy does not respond, it could face the European Court of Justice (ECJ), which has the power to rule against member states and levy heavy fines and other penalties.        

 

GARBAGE

 

The garbage crisis undoubtedly gives Italy a negative image, but the potential of the mounting garbage in Naples to affect the health of EU citizens is what attracts attention from Brussels. The executive branch of the EU, the Commission, has warned the Italian government that if it does not resolve the crisis, it will be tried before the ECJ, which would lead to global humiliation for Italy.

 

Action has already been taken. In a symbolic gesture, Berlusconi held the first meeting of the new Italian cabinet in Naples, where the executives voted to label previously closed dumps as areas of strategic interest to be re-opened and controlled by the interior and defense departments, thwarting mafia-sponsored protest. However, it is impossible to determine whether these changes are the result of pressure from Brussels or pressure from Italians.

 

IMMIGRATION

 

Immigration is a very sensitive issue in Italian politics. With an estimated 600,000-700,000 illegal immigrants in Italy, the current Italian government is receiving intense demands from its population to deal with this perceived problem.

 

The EU has long considered Italy's immigration policies to be lax. Once a person enters Italy, he or she may pass freely to most other Western European member states. While member states such as Germany and France also experience immigration problems, Italy's position is unique. Its geographic location makes it attractive for illegal immigration from the Balkans and North Africa, and its extensive coastline makes it difficult for officials to stop undocumented people from crossing the borders.

 

The Roma or ‘Gypsy' population is another issue. Because this population tends to remain on the fringes of Italian society and workforce, the Roma are not easily integrated or kept track of. As Hix claims, ‘If the Roma came in large numbers to any other EU member state, would be having the same issues.'

 

Because of Italy's unique position, the EU considers it important to appropriately control immigration to the country. Italy has started to yield to EU pressure on immigration legislation. The new Italian government has joined the EU's Prüm Treaty, which promotes cross-border cooperation in combating terrorism and crime. Also, in its first session, the government proposed a tougher bill that could make illegal immigration a punishable crime.

 

DEBT

 

At 105.6 percent of its GDP, Italy's debt is at a far greater level than allowed by the EU. As a user of the euro, Italy must maintain public debt at or below 60 percent of its GDP. The EU Commission is currently warning Italy that it must comply with its debt requirements or face trial in front of the ECJ. Hix is not confident that the EU can successfully pressure Italy to comply in this case. He thinks Italy will side with other EU member states that advocate looser debt regulations. But EU monetary laws have already benefited Italy financially. For example, by forcing Italy to observe certain rules, the EU promoted increased control over budgetary spending. ‘The euro saved us,' says Dr. Alessandro Gentili, the director of James Madison University in Italy. ‘Without the euro, Italy would have ended up in a mess.'    

 

Does Italy stand a chance of turning the tide on these and other issues? Italy's membership in the EU has helped give it increased stability and an ultimatum to upgrade in the past. With the EU acting as a watchdog and Italy beginning to make some advised improvements, there is a chance that the new Italian government will make the changes it needs to regain Italy's former prominence. The question remains whether or not the EU can help the new Italian government as well.

 

 

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