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December 22, 2007


La dolce vita turns sour as Italy faces up to being old and poor

The Christmas fair on Piazza Navona in the heart of Rome looks as cheerful as ever: glittering decorations, funfair booths and roasting chestnuts. In St Peter’s Square the giant Christmas tree is lit, and the streets are full of visitors soaking up the festive version of la dolce vita.

The markets in the residential districts tell a different story. The lights are bright but the mood is sombre. “I’m buying fewer presents this year, and cheaper ones,” said a woman fingering fur hats at a stall near the Vatican. “And as for food . . .”

There is a sense of national angst in Italy as 2007 comes to a close. A defining moment came this week when, for the first time, Spain overtook Italy in terms of living standards. Greece is now breathing down Italy’s neck.

The self-lacerating mood goes far beyond prices and incomes, reaching into the heart of Italy’s debate with itself over soul and identity. Italians are ruling significant parts of the world: Fabio Capello has taken charge of the England football team and Carla Bruni has conquered the heart of the French President.

Yet, at home, Italians are consumed with a sense of domestic decline. “When an entire country goes into crisis over the ‘who are we and where are we going’ debate, it means we are reaching new heights of hysteria,” the writer Umberto Eco said. “This explosion of provincialism is truly painful. Personally I feel depressed.”

So do many of his fellow countrymen. There is a sense that while the past is Italy’s glory, it is also its prison, with politics and business dominated by a gerontocracy and the younger entrepreneurs and politicians held back.

When Romano Prodi, the centre-left Prime Minister, held a summit in Rome this week with Nicolas Sarkozy of France and José Luis Rodríguez Zapatero of Spain, commentators noted that while Mr Zapatero was 47 and Mr Sarkozy a bouncy 52, Mr Prodi was a weary-looking 68. In the wings, plotting his comeback, is the centre-right leader and media tycoon Silvio Berlusconi, aged 71.

“The problem is that the leaders of our governing class are greybeards whereas, say, Spain’s are practically kids,” says Michele Salvati, a leading economist. At this year’s Miss Italia beauty contest, the contestants were all in their teens while the average age of the judges — who made headlines by arguing over whether a girl’s bottom should be judged part of her charm — was 70.

Even the arts are struggling: although there are fine Italian film directors, there is none to match Fellini or Visconti, and Monica Bellucci, for all her beauty, is no Sophia Loren (in any case she lives in Paris).

When Larry Gagosian, the dynamic American art dealer, opened a new modern art gallery in Rome last week, some critics accused him of making money instead of praising an attempt to put Rome at the cutting edge of contemporary art.

Vincenzo Cremonini, 44, who has expanded his meat-producing business at Módena to include railway and motorway catering — including the new Eurostar service from St Pancras — identifies three other factors holding Italy back: bureaucracy, the slow judicial system, which is used by protesters to hold up modernising initiatives such as the Turin to Lyons high-speed railway, and the “selfperpetuating political elite”.

A book on Italy’s cocooned elite, La Casta (The Caste), a runaway bestseller this year, pointed out that Italy had the highest number of official chauffeur-driven cars in Europe, and that the presidential palace, the Quirinal, cost four times as much to run as Buckingham Palace.

A “jobs for life” mentality prevails, with jobs allocated not on merit but through a network of mutual favours and family ties known as raccomandazione. Some younger Italians are prepared to take short-term contracts, which is part of the Prodi Government’s modernisation programme, but Italy’s powerful trades unions have mobilised millions of protesters against what they call “precarious labour”. Last month hospitals closed for a day over short-term contracts, and this month lorry drivers brought the economy grinding to a halt with a three-day strike.

The workforce at Alitalia, itself a symbol of the Italian malaise, is threatening a Christmas strike over the proposed sale of the troubled national airline to Air France-KLM. Even La Scala opera house in Milan is disrupted regularly by industral unrest. “Italy needs a Margaret Thatcher,” Francesco Caltagirone, one of Italy’s top entrepreneurs, said yesterday. “We need rigour and deregulation, a leader who will force Italians to make sacrifices.”

Even the Italian nuclear family, once the bulwark (along with the Catholic Church) of Italian society, is in decline, with growing divorce rates, a low birthrate and the rise of single parenthood. The family still provides a haven for young Italians, many of whom live at home until they are 30 — but this, too, holds Italy back, as those who should be carving a niche for themselves opt instead for Mamma’s cooking and laundry services. Many do so because they cannot afford to make their own way.

Confesercenti, the traders’ association, says that sales this year of clothing and electrical goods are down 15 per cent, and perfume sales down 10 per cent. Yesterday Coldiretti, the farmers’ union, announced that even sales of pasta were down 4 per cent and bread by 7 per cent.

“A lot of families find it difficult to reach the end of the month,” Mr Cremonini says. “We call it the fourth-week syndrome.”

Eleven per cent of Italian families live under the poverty line, and the middle class is feeling the pinch too. This week Mr Prodi’s wife, Flavia, had to intervene when a well-dressed woman in a fur coat accosted her husband outside Palazzo Chigi, the Prime Minister’s residence, accusing him of “ruining us all”.

One key reason for Italy’s woes is rising energy costs. Another is the strength of the euro against the dollar. Even the luxury sector, for which Italy is renowned with names such as Gucci, Armani and Versace, is feeling the squeeze as orders drop. Globalisation and cheap competition from Asia are undermining traditional exports such as textiles.

The last straw for many was the news that Spain had overtaken them in terms of GDP per capita. According to the European Union statistics office, Eurostat, Spain’s GDP per capita climbed to 5 per cent above the 27-member EU average last year, from 3 per cent above the previous year.

Italy moved in the opposite direction, with the figure falling to 3 per cent above from 5 per cent. Spain already has its sights on the next goal. Mr Zapatero, welcoming the news, added that the country must match the economy of France.

Italy, says Luca Cordero di Montezemolo, the head of Fiat and the employers’ federation Confindustria, “has not only come to a halt, it is going backwards. The problem is not only that we lack investment in research and development, it is also that every Italian looks out for himself, not for the common good.”

The result is that Italians are the least happy people in Europe, according to a poll conducted for the University of Cambridge by Luisa Corrado, of the University of Rome. Danes turned out to be the happiest. Tellingly, in Denmark 64 per cent said that they trusted their parliament. In Italy it was only 36 per cent.

Many older Italians remember much harder times: the historian Giampaolo Pansa, 72, says that “everyone says they are poor nowadays, but I remember my grandmother stealing food from the fields to feed us. The other day a builder came to our house. He said he’d never known such hard times — and then pulled out the latest-generation mobile phone.”

After the Second World War, millions of Italians emigrated in search of a better life. The movement is now the other way, with nearly four million immigrants in Italy. “The problem is that a country like Spain sees immigrants as useful workers, whereas in Italy the headlines tell us they are all criminals who go round robbing and stabbing Italians,” Carlo Bastasin, an economist, said.

Italian-Spanish rivalry is a needle match, and some Italians fear that their country’s decline, and the rise of Spain, means that Madrid will carry more weight than Rome around the world. Ronald Spogli, the US Ambassador to Rome, gave warning this week that Italy “risks a diminished international role” as well as slipping down the list of American global business partners.

“America’s best friends are its business partners,” he observed, noting that US investment in Italy was about $17 billion (£8.5 billion), while in Spain it was nearly $50 billion.

There is hope amid the encircling gloom. In Sicily the crippling power of the Mafia is finally being tackled by businessmen — almost all in their forties, with European experience — who risk their lives by refusing to pay protection money.

Italy, says Walter Veltroni, the Mayor of Rome and a likely future centre-left Prime Minister, can and must overcome its “do-nothing demon”. Italian bureaucracy is “an elephant sitting on top of Italy and holding it back”, he said. “We must lose our fear of the new.”

“There is more to Italy than pizza and spaghetti,” says Mr Montezemolo, who — according to rumours — may enter politics when his Confindustria mandate expires next year.

“We are a country full of excellence and positive energy. We can reverse this decline — if we open up the country, embrace the market, get rid of the red tape, and release the talents of the young.”

Trying times

— 0% population growth rate

— 42.5 median age, compared with 38.5 in Britain

— one in five Italians is over 65

— 1.29 children born per woman. 2.1 needed to maintain population

— 120 days lost each year to strike action per 1,000 employees from 2001 to 2005, compared with 26 in Britain

— 20th place on Human Development Index, the UN measure of factors such as education, wealth and life expectancy, four places below Britain and seven below Spain. Italy dropped three places in the past year

— 7% unemployment rate, higher than 76 countries, including Romania, Nigeria, Cambodia and Ukraine

— 106% public debt as proportion of GDP, the sixth-highest in the world, higher than Zimbabwe

Sources: UN, CIA, National Statistics

Have your say

I have been living in Rome for 4 years. Prior to that I lived more than 10 years in the UK. I am neither British nor Italian. I work for an Italian company, speak Italian and have made many Italian friends. My opinion is that half of Italy’s economic problems is due to prevailing mentalities..

A society which does not embrace challenge is a ‘dead’ society. In Italy nothing is moving.

People are afraid to lose their job, but most don’t want challenges. They want the job for life, they prefer to moan and feel victims rather than ‘move their …”

On the other side, employers are not afraid to pay low salaries. Why do otherwise if they can have it all ‘for free’? They will tell you they pay such high taxes taxes (Everyone in Italy will tell you they pay too much taxes, and almost everyone will try to declare less than they earn, but that’s another story, although it is definitely part of the issue). That’s short-sighted mentality. Italy is like a snake biting its own tail.

Anne, Rome, Italy

The main issue is the secondary school (primary one is well). The politicians don't want to improve it in order to make a selective system like other country.

Mario Rossi, Milan, Italia

I totally agree with this article. Italy needs a complete makeover and in order to accomplish this it will have to get rid of its old fashioned way of doing politics and the costume of favour making and asking. What disappoints me is that Spain and Greece, once far behind Italy in terms of GDP, are overtaking us. I just hope we'll be able to become "Capitum Mundi" again....

Antonella, Sassari, Italy


2007-12-24 13:16:57 GMT
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