In the early 1990s the Italian political system underwent a complete collapse. Every party disintegrated or was renamed. Former Prime Minister Bettino Craxi, once considered the most powerful man in Italy, died in exile in Tunisia. The cause of the collapse was the Mani Pulite or “clean hands” investigation started by Milan magistrates, which led to the discovery of massive and pervasive corruption callend “tangentopoli” or bribery city.
By 1994 Italy was said to be entering its “second republic.” From the end of World War II to the 90s the Christian Democratic party dominated Italian politics. While the country had over 40 governments, making it appear to be in constant crisis and unstable, the problem was the opposite: Italy was too stable. The insiders shifted coalitions and positions, but the same people dominated, becoming more and more corrupt over time. Italians knew what was happening – there was real scorn for “la classa politica” – but seemed powerless to stop it.
The system broke down just as other single party systems fell part – Communism, the LDP in Japan, and the PRI in Mexico. With the internationalization of global capital, countries had to shed their isolated corruption to be relevant in the world economy. Yet hope for a new system in Italy faded; while many of the old guard left, the new leaders were still of the old thinking. Silvio Berlusconi dominated Italian politics and did not institute real change. Even reformers like Romano Prodi found it hard to take on a system that had been built on kickbacks and inside deals. By 2009 the glaring deficiencies of the Italian system came into full view as Italy fell into a crisis that threatened its ability to maintain membership in the Eurozone.
In 2013, as the country struggled to implement needed reforms, Enrico Letta became Prime Minister, leading a large coalition. The idea was that together the parties could do what was necessary to get on track. Yet progress was slow, people were losing patience, and under pressure Letta resigned in February 2014, allowing the young Matteo Renzi to be named Prime Minister.
Italy has a multi-party system, and Renzi’s left of center Democratic party controls 293 of 630 seats in the national assembly, and 108 of 320 in the Senat. In order to govern it has formed a coalition with seven other parties. Renzi’s task is to implement reform while keeping that coalition together.
Renzi has argued that Italy needs generational change – that the old system will never truly be open and transparent if the old guard remains in power. His cabinet has an average age of 47, younger than any in Italian history. He already has forced the resignations of leaders of the largest state owned companies, replacing them with women. That alone is a culture shift – women never ran any of those companies before, and Italian business has been male dominated.
His ideology is said to be close to Tony Blair’s “third way” – center-left, with an emphasis on the center. His first three year budget has controversial provisions, but is designed to create long term growth potential. Italy’s economy is not exactly healthy. In 2013 its economy contracted by 1%, with unemployment over 12%. It had a budget deficit of minus 3.3%, with total government debt at 133% of GDP. To succeed Renzi has to get the deficit below 3%, grow the economy, and lower unemployment.
To do all that he must not only craft a solid economic plan, but more importantly remake “la classa politica.” For generations the political class has been corrupt. That has to end. A new generation has to make links with the other European economies and build a new civil society. Faced with corrupt leaders, citizens had no qualms about tax evasion, cheating the government, or trying to get for themselves whatever they could. Civil society was weak.
None of that can be changed overnight. Renzi offers a breath of fresh air and a sense that a mixture of crisis and impatience may be enough for Italians to now build a true modern democracy based on rule of law and accountability rather than inside deals and kickbacks.