Italy: Turning economic fortunes?

Italians have voted in one of the country’s most important elections in recent history.

“Generally the big majority of Italians will be for a change, it means that all the voters that will vote for Grillo, they express they will do it for  change. Generally speaking, left is for  change, but probably left will not have the majority of the seats in the Parliament so they will need to organise an alliance with the center.” – Pier-Virgilio Dastoli, the president of the European Movement in Italy

Four candidates took part in the first general election since former Prime Minister Silvio Berlusconi, one of those standing, resigned in November 2011 after becoming embroiled in a series of scandals and escalating the country’s debt crisis.

Outgoing Prime Minister Mario Monti, a former European commissioner, also competed with the popular wildcard candidate Beppe Grillo, a comedian-turned-politican who leads the protest Five Star Movement party and Pier Luigi Bersani, the centre-left leader of the Democratic Party who led the last opinion polls.

The candidates will have a tough job on their hands as they try to revive Italy’s economic fortunes.
 
The national election is being watched closely by eurozone capitals and global markets.
 
Italy has been under what is called unelected technocratic rule since November of 2011.
 
In those 15 months, the government led by Mario Monti has brought in all sorts of economic and labour changes which have put the squeeze on the Italian people. The reforms have been met with disapproval and protest, but they stopped Italy’s slide, and kept it away from the dreaded bailout.

“There is another route out of this crisis, its a European route. The question now is how long will the voters put up with this position where they have been locked into austerity by the arrangement that was set up some 15 year ago with the implementation of the Euro?” – Thomas Palley, a senior economic policy adviser to the American Federation of Labor

In these austere times, these elections are crucial to addressing Italy’s economic problems.

Not only was there no growth in 2012, the economy actually shrank by more than two percent. Whoever wins the election will inherit a public debt exceeding $2tn.

And more than 11 percent of the workforce do not have jobs, with youth unemployment now standing at more than 36 percent.

The result of the general elections will determine the financial future of Europe’s third-largest economy.
 
Who will be able to work together to turn around Italy’s economic fortunes? Will it be a choice between continued economic pain for, hopefully, long-term gain? Or a different approach to growth and jobs creation, with no guarantees of success?

Inside Story, with presenter Kamahl Santamaria, discusses with guests: Pier-Virgilio Dastoli, the president of the European Movement in Italy; Alberto Nardelli, an Italian affairs analyst; and Thomas Palley, a senior economic policy adviser to the American Federation of Labor, and Congress of Industrial Organizations.

“Austerity within Italy is less about cuts, it is a lot more about very high fiscal pressure, in addition to the much talked about property tax, Italy has one of the highest fiscal pressures for companies, if you look at the total fiscal pressure on corporations that is near 70 percent and that is one of the highest within Europe.” – Alberto Nardelli, an Italian affairs analyst