Italy – EU banker drafted in to guide recovery for the bosses…again

20 February 2021

The back story to the crisis

The 2018 general election resulted in two populist parties the Five Star Movement (M5S) and the Lega (League) win a majority of votes. Both are relatively new parties.

The M5s was founded in 2009 and grew out of a movement started by the comedian Beppe Grillo. It’s main mobilising slogan was to call on the political caste to va fan culo (F..k off) It combined some progressive policies with weird stuff about how the internet could revolutionise political democracy. It never engaged with the labour movement, identifying the trade unions as part of the caste. By 2018 it had shed most of its radical movement ideology and was keen to be a responsible governing party.

The Lega started out as the Lega Nord in 1991 fighting for the independence of a mythical Padania composed of first the Lombardy region (Milan) but also encompassing other northern areas. Like Berlusconi’s new political party it benefited from the complete break-up of the old duopoly of the Christian Democrats and Communist party in the swamp of the bribesville (tangentopoli) scandals. So it formed governments with Berlusconi. By 2018 under Salvini it had transformed itself into a national anti-EU, pro-sovereignty party – dropping Nord from its name and putting Salvini for Prime Minster on all its posters instead. Salvini’s racist crusade against migrants was a key factor in its success

Conte 1 and 2

Despite spewing vitriol against each other for years they came to a ‘contract’ for the government under the ‘independent’ (though M5S inclined ) lawyer, Conte. While the Lega wanted flat taxes and tough measures against migrants the M5S was for a new welfare benefit for the poorest called citizens’ income. Both were pro-business, pro-sovereignty and eurosceptic.

The first Conte government lasted until August 2019 when Salvini launched a pre-emptive strike with a no-confidence motion. Since the Lega was riding high in the polls he was hoping for a general election. However the Italian president, Mattarella looked around for a new majority and managed to get the Democratic Party (PD) to come on board despite the fact that the M5S had excoriated the PD for all of its existence. The PD’s Orlando, now the new Labour Minister, once declared: “Go into government with the M5S? Not even if Superman appeared!

Renzi torpedoes Conte 2 and the saviour of the nation arrives

The second Conte government came to an end this January when Renzi – who used to lead the Pd – but split to form Italia Viva (Long Live Italy) – took his ministers out. He threatened to vote down legislation on the post-Covid recovery plan and on reforming the justice system. Ironically Renzi had been the architect of the second Conte government, encouraging the Pd to come on board. Observers have suggested Renzi was a player for Draghi from the start, citing visits to his house but the press are reluctant to alter their ‘man of destiny’ narrative.

After the failure to set up a third Conte government Mattarella called in Draghi, ex-governor of the Bank of Italy and of the European Bank. He was hailed as the man of providence, the saviour of Italy, who saved the Euro after the 2008 crisis…who can walk on water by an utterly supine mass media. Pundits and representatives of nearly all political parties outdid each other in their praise of this unelected banker. Today the new Draghi government has been given an overwhelming vote of confidence in both houses. The M5S and PD are now joined in government by the right-wing forces, Berlusconi’s Forza Italia and the Lega, as well as smaller pro-European centrist forces.

Landini, at one time a more radical leader, but now the leader of the main trade union confederation, has praised Draghi’s high-quality speech and said now let’s create jobs. Landini forgets that Draghi was involved in a previous government’s big privatisation programme and ditching of labour laws.

From the beginning of the process, the PD was the most enthusiastic cheerleader for Draghi as they have for many years totally bought into a pro-business, pro-modernising agenda. Hardly surprising, after the continual hagiography of Draghi on the mass media and the support of nearly all the political parties, that the first polls give over 80% support to the new government.

A government of national unity

The new prime minister has distributed the ministries more or less according to the relative electoral support of each group although he clearly gave Forza Italia a present with three ministries, the same as the PD and Lega despite having at least half their support. Draghi Berlusconi still represents key sectors of the business community. The unelected experts – the ‘Draghi boys’, colleagues from his banking career – have been given the key portfolios controlling the resources for the recovery. The Lega is happy with the Tourism and Economic Development ministries which distribute lots of grants to the sort of business that often supports the party. Nine of the twenty-four members of the cabinet are unelected technocrats. Only a third are women and this has caused a fuss inside the PD where leading women are upset that their leader, Zingaretti, did not push for party policy on gender parity.

The Financial Times went into a paroxysm of delight when Draghi quoted the architect of Italian reunification, Cavour, “Reforms enacted in time, instead of weakening authority, will actually strengthen it”. The newspaper seems to think the mere fact that Draghi is respected by the bankers and leaders of other countries will somehow lift the economic ranking and status of Italy. Nevertheless, it is true that the Italian bosses want decisive action to restructure the economy in their favour while maintaining social peace as far as possible.

What sort of recovery plan?

The programme outlined in his speech today tried to appeal to all parts of his coalition. Reading some of the discussion on Facebook today by Italian comrades there is a debate about how far Draghi has a long term plan and also how neo-Keynesian it is. Will there be ‘new deal’ elements to it? Clearly, the deficit will increase, some social spending is likely but the overall aim is for Italian capitalism to become more competitive with France and Germany. He represents the dominant sectors of Italian capitalism and his plans for both the ecological and economic crisis will involve restructuring in their interests rather than those of working people. For example, he will want less protected national contracts and conditions and more autonomy for the different regions, both of which affects workers’ living standards negatively. He is on record as not wanting to subsidise the so-called lame ducks like Alitalia, the national airline. Better use of digitalisation, more efficient public administration and a less archaic legal system are all top priorities for business.

One thing is to have this plan another is whether he can keep this heterogeneous coalition together to implement it. How long will the coalition hold together if taxes were to rise at all on higher incomes for example or if certain measures were too negative for working people? If he were to succeed in combining his restructuring with some spending that protects or creates new jobs and maintains living standards to a limited degree this could further reduce the space for an alternative, more radical recovery plan. Particularly since the trade unions are falling over one another to be part of the negotiations over the new social contract for recovery. The pandemic makes it hard to mobilise people on the streets.

Draghi is facing a difficult balancing act. If those small forces of the anti-capitalist left, the militant trade union rank and file and what remains of the community movements can draw people into opposition then we could still see a different outcome.

Another banker, another ‘super’ Mario, Monti, was drafted in on a sea of praise in November 2011. His government stuttered to a halt in two years and led to the electoral breakthrough of populist forces like the M5S

What other takeaways are there from this crisis?

a) Political systems can become dysfunctional for capitalist political hegemony

Despite its pro-European and pro-business approach, the disputes in the second Conte government about how to spend the European money were no longer tolerable for dominant sectors of Italian capital. The government of the President, a national unity government provided a plan B. There are dangers with putting bankers or capitalists in direct charge of politics. This why Draghi has put so much emphasis on involving nearly all the political parties, he did not want a technocratic government like the Monti one in 2011.

The ruling class needs political parties and cadre to represent it at one remove. The political system needs to appear neutral, above classes and an expression of democracy and national unity. It is a place where the internal conflicts between the different sectors of capital, between the needs of big business and smaller companies, or between regional interests can be resolved. It is where the ruling class achieves alliances with the middle classes and wins the support of sectors of the working class to arrive at the consent of a majority. This consent is always backed up with the repression of state power (police army) and of the laws of the market (debt, the threat of unemployment).

The financial crisis and now Covid has put all these mechanisms under enormous stress. In Britain, it was worsened with Brexit which major parts of the ruling class are against. In Italy, the political system has failed to operate as efficiently as the ruling class requires the emergence of unstable populist parties and the growing disenchantment of working people with politicians.

b) There is a huge crisis of even ‘reformist’ working-class representation in the political system

Parties like the PD which came out of the biggest Communist Party in Western Europe no longer represent the working class. It has backed all the capitalist restructuring the Italian bosses have demanded. It was very quick to applaud the appointment of Draghi. Even small left currents, like the LEU (Liberty an Equality Party), have jumped on Draghi’s bus. They argue that without the second Conte government and Draghi that the alternative is an inevitable right-wing government. Such so-called left of centre parties influences the trade union leaderships to demobilise their members by opting for co-management of the crisis.

c) Recovery plans will not be simple re-runs of post-2008 austerity programmes

The existential turmoil of the Covid pandemic and the extent of the economic downturn with potentially millions more unemployed has meant the dominant sectors of capital are not inclined to wage an all-out austerity offensive – at least in the short term. Increased social spending and infrastructure building will be combined with restructuring or re-setting policies on the green economy and digitalisation. This does not mean all working people will be protected or that we will be benefiting from a recovery based on the needs of the many. Their programmes are still very limited and inadequate to what is needed to turn around the ecological crisis and rebuild the economy in the interests of the many, not the few. But it does mean an anti-capitalist left has to be more strategic and more radical in providing an alternative. We cannot build a credible alternative if we unnecessarily scaremonger about an immediate anti-austerity offensive.

d) The Draghi government also represents a democratic deficit

Both Draghi and eight of his ministers are unelected and thus unaccountable to anyone. The Italian President has played hard and fast with the constitutional arrangements. These manoeuvres further alienate ordinary people from politics, since they can vote for one thing and then the people at the top can change the rules. It represents a growing international tendency.

e) This government does not prevent the return of a hard-right government in two years time

Whether the government is successful or unsuccessful in its own terms the right-wing parties can benefit. The Lega and Forza Italia (Berlusconi’s party) can gain support by being inside if things work out. At the same time, the rising star of the right-wing coalition, Giorgia Meloni of the Fratelli di Italia (Brothers of Italy), which is a post-fascist party, has not joined the Draghi government. Unlike most of the other political leaders, she has not done a U-turn and not joined with forces she always refused to work with. Already her party is at 16% or more in the polls and she has overtaken Salvini as the most popular leader on the right. She could also mop up more support if things went badly for the Draghi government.

f) The M5S as we knew it is over

Over the last few years, it has haemorrhaged dozens and dozens of MPs and senators but support for Draghi has seen 15 senators and some more MPs leave. They will regroup with the historic ‘purist’ leader, Di Battista. Its political project was always totally contradictory despite some positive impact it had in its initial phase. It is now a political party like the others. The ban on standing for more than two mandates is dead in the water and its leaders are praising the bankers and the EU that they used to blame for the ills of the Italian economy.

An afterthought: You will have no other god apart from me

A comrade from Naples, Antonello, posted something today on social media that sums up the Draghi government:

Prime Minister Draghi never once, not even by accident, mentioned the words ‘workers’ in his speeches to the Senate and the House.

Of course, this is not an oversight.

Workers do not exist and, above all, must not exist as an autonomous entity with their own subjectivity and own interests, which are different and alternative to those of other social forces.

Covering up the fact that this society is not ‘democratic’, is not ‘fair’, does not guarantee a ‘level playing field’, and above all is torn apart by irreconcilable class conflicts is an essential task for Draghi and his ilk.

Just as the media’s real mission is to proclaim: “you shall have no god but me”, daily from the pages of newspapers, from news screens, from the glittering world of social media.

All of us must worship Mammon, the One and Only True God, to whom everything must be sacrificed: time, affections, life itself

Dave Kellaway, Cava dei Tirreni, Italy. 18 February 2021

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