Miércoles 19 de Diciembre de 2007, Ip nº 221

In Italy, a winter of discontent
Por Ian Fisher

ROME: All the world loves Italy because it is old but still glamorous. Because it eats and drinks well but is rarely fat or drunk. Because it is the place in hyper-regulated Europe where people still debate with perfect intelligence what, really, the red in a stoplight might mean.

But these days, for all the outside adoration and all its innate strengths, Italy seems not to love itself. The word here is "malessere," or malaise, and it implies a collective funk - economic, political and social - summed up in a recent poll: Italians, despite their claim to have mastered the art of living, report themselves the least happy people in Western Europe.

"It's a country that has lost a little of its will for the future," said Walter Veltroni, Rome's mayor and a possible future prime minister. "There is more fear than hope."

The problems are, for the most part, not new - and that is the problem: They have simply caught up to Italy over many years to the point that no one seems clear how change can come - or if it is possible anymore at all.

Italy has long charted its own way of belonging to Europe, struggling like few other countries with fractured politics, uneven growth, organized crime and a tenuous sense of nationhood.

But frustration is rising that these old weaknesses are still no better, and in some cases worse, as the world outside outpaces it: In 1987, Italy celebrated economic parity with Britain. Now Spain, which had joined the European Union only the year before, may soon overtake Italy.

Its low-tech way of life may enthrall tourists, but Internet use and commerce here are among the lowest in Europe, as are wages, foreign investment and growth. Pensions, public debt, the cost of government are among the highest.

The latest numbers show a nation older and poorer, to the point that Italy's top bishop has proposed a major expansion of food packets for the poor.

Worse, worry is growing that Italy's strengths are degrading into weaknesses.

Small and medium-size businesses, long the nation's family-run backbone, are struggling in a globalized economy, particularly with low-wage competition from China.

Doubt clouds the family itself: 70 percent of Italians from the ages of 20 to 30 still live at home, condemning the young to an extended and underproductive adolescence. Many of the brightest, like the poorest a century ago, leave Italy entirely.

The stakes have risen so high that Ronald Spogli, the U.S. ambassador with 40 years of experience with Italy, warns that the country risks both a diminished international role and relationship with Washington.

America's best friends, he notes, are its business partners, and Italy, increasingly, is not. Bureaucracy and unclear rules kept United States investment in 2004 to $16.9 billion. The number for Spain: $49.3 billion.

"They need to sever the ivy that has grown up around this fantastic 2,500-year-old tree that is threatening to kill the tree," Spogli said.

But interviews with possible prime ministers, business people, academics, economists and ordinary Italians suggest that the largest reason for this malaise seems to be the feeling that there is little hope the ivy can be cut - and that is turning Italians both sad and angry.

There is a connection between the nation's errant political system and its worsening mood: Luisa Corrado, an Italian economist, led the research into a study at the University of Cambridge that found Italians the least happy of 15 West European nations. They link happiness, as measured in 2004, with trust in the world around them, not least in government.

In Denmark, the most happy nation, 64 percent trusted the Parliament. For Italians, the number was 36 percent.

"Unfortunately we found this issue of social trust was a bit missing," Corrado said.

Two best-selling books - both sparked months of self-probing debate - capture the current distrust of large powers that cannot be controlled.

"The Caste" sold a million copies (in a nation where 20,000 makes a best-seller) by exposing the sins of Italy's political class, how it became privileged and unaccountable. Even the presidency, considered above the fray, was not spared: The book put the office's annual cost at $328 million, four times that of Buckingham Palace.

"Gomorrah," which sold 750,000 copies, concerns the mob around Naples, the Camorra. But politics, the book argues, allows the Camorra to flourish, keeping Italy's lagging south poor and organized crime, by one recent study, the largest sector of the economy.

These are Italy's age-old problems, but Alexander Stille, a Columbia professor and Italy expert, argues that this moment is different: While the economy expanded, from the 1950s to the 1990s, Italians would tolerate bad behavior from their leaders.

But growth has been slow for years, and life is tipping into decline. Numbers now show 11 percent of Italian families under the poverty line, and 15 percent have trouble spreading their salary over the month.

"The level of anger is great because before you could slough it off," Stille said. "Now life is harder."

Italians rarely associate this crop of aging leaders with capacity to change: They are, in fact, the same people who have battled it out, trading terms in power, for more than a decade. Last year, they voted out Silvio Berlusconi, Italy's richest man and prime minister first in 1994, for not keeping his promises for American style growth and opportunity on merit. When he left office, economic growth was zero.

But after the election, it became clear that getting rid of Berlusconi would be no magic cure. Prime Minister Romano Prodi, who also had the job from 1996 to 1998, has been saddled with a shaky coalition of nine warring parties.

He promised a clean slate, but his unwieldy center-left government disappointed with its first symbolic act: Its cabinet had 102 ministers, a new record. He has managed to push through two reform packages, and the economy is growing again. "Ours is not a happy situation, but it is better than before," Prodi said.

But the government has fallen once and threatens to again at every difficult vote. Small proposals spur protestors to the streets, one difficulty making change as protected interests seek to preserve themselves. Pharmacists closed their doors this year when the government threatened to allow supermarkets to sell aspirin. The cost for just 20 aspirin tablets at a pharmacy: $5.75.

The measure passed, but in all, the government is largely paralyzed. Voters are fed up, and Prodi's opponents know it.

"I understand the bad humor, the malaise," said Gianfranco Fini, leader of National Alliance, the second largest opposition party. "People are starting to get strongly angry because you have a government that doesn't do anything."

Economically, it was once easy to solve problems by devaluing the lira. That is now impossible with the euro, which has also increased prices, particularly for housing.

Then there is the family: The divorce rate has risen. Large families have been replaced by one of Europe's lowest birth rates, the fewest children under 15 and with the greatest number of people over 85 apart from Sweden. Unemployment is low, 6 percent. But 21 percent of people aged 15 to 24 did not work in 2006. And the old are not letting go.

Evidence of Italy's age is everywhere: In parks, clutches of old ladies coo at a single toddler. On television, stars are craggy (median age for the presenters of this year's Miss Italia contest: 70. The winner, Silvia Battisti, was 18). In politics, Prodi is 68, Berlusconi is 71.

"The generational problem is the Italian problem," said Mario Adinolfi, 36, a blogger and aspiring politician. "In every country young people hope. Here in Italy there is no hope anymore.

"Your mom keeps you home nice and softly and you stay there and you don't fight. And if you don't fight, it is impossible to take power from anybody."

He added: "We don't have a Google. We can't imagine in Italy that a 30 year old opens a business in a garage."

In September, word spread through a house of young Romans, over beer and pasta, that Luciano Pavarotti, the tenor and arguably the world's most famous Italian, had died. "Dammit!" yelled Federico Boden, 28, a student. "Now all we have is pasta and pizza!"

Italy does not seem to rank as it once did for greatness. There is no new Fellini, Rossellini or Loren. Its cinema, television, art, literature, music, are rarely considered on the cutting edge.

But it does have Ferrari, Ducati, Vespa, Armani, Gucci, Piano, Illy, Barolo - all symbols of style and prestige. What Italy has is itself - and many believe the future rests in trademarking mystique into "Made in Italy."

Italian wine was an early test. Producers moved with success from quantity swill to quality. Illy, the coffee house, has flourished by combining quality and uniformity - they make just one blend - with innovation in methods and style in presentation.

"This is where Italians are winners," said Andrea Illy, the company's president. "Use your particular strengths, which are beauty and culture."

But Italian industry depended on low wages, making it vulnerable to competition from China as labor costs here rose. Alarms began ringing several years ago, with fears that many of Italy's traditional businesses - textiles, shoes, clothes - could not compete. Many could not: In northeast Friuli Giulia, a capital of chair making, the number of chair companies has shrunk to about 800 from 1,200.

"At first they thought this phase would just pass," said Massimo Martino, director of Max Design, a small furniture company. "But in reality many businesses ended up closing because fundamentally the market didn't need them anymore. They didn't want to change."

Some companies took up the challenge. Wood was the primary material there, but Martino began to create chairs, mostly of molded plastic, well-designed but inexpensive. Others decided competing on price against China was impossible. Instead, the aim would be quality and Italy's uniqueness, something China could not match.

Pietro Costantini, head of a third generation furniture company, said he began focusing not just on the upper end - he makes extra-large furniture for big Americans - but created lines that would sell the Italian lifestyle itself. Customers, he said, are returning.

"For example, if you pick a Russian type of customer, he must have a German car, a Swiss watch and Italian clothing," he said. "Like Italian clothing, we are sure they are looking at Italian furniture."

It is not clear this "Made in Italy" strategy will be enough. Skeptics argue that foreign investment, research and development, venture capitalism, remain too low, as does competitiveness with other European countries.

But the nation's entrepreneurs are one bright spot in a landscape with few others. Some argue the younger generation is another key, if not now then when those in power die off. They are educated, well traveled and - like Beppe Grillo, an actor and comedian, in attracting his masses - use the Internet.

Politically, two center-left parties merged to produce the Democratic Party, aimed at overcoming the system's crippling fragmentation. All sides finally agree that a new electoral law must be redone to give more breathing room to the winner of the next elections - crucial for pushing through any major changes.

But understanding the problems is the smallest step. Many worry, meantime, that Italy may share the same fate as the Republic of Venice, based in the most beautiful of cities, but whose domination of trade with the east died with no culminating event.

Now it is essentially an exquisite corpse, trampled over by millions of tourists. If Italy does not shuck off its comforts for change, many argue, a similar fate awaits Italy: blocked by past greatness, with aged tourists the questionable source of life, the Florida of Europe.

Peter Kiefer contributed reporting from Rome and Trieste and Elisabetta Povoledo contributed from Rome.

  12/12/2007. International Herald Tribune.


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