Italy’s Prime Minister Letta Survived, But He Cannot Govern Impossible politics and intractable economic problems make it really hard to chart a path ahead for Italy

By Paolo von Schirach

October 3, 2013

WASHINGTON – In Italian politics the first order of business (and second and third) has been and is mere survival. By this standard, Prime Minister Enrico Letta, head of an improbable and fragile left-right coalition, has done reasonably well. His 5 month old government, doomed just a few days ago, managed to survive. Silvio Berlusconi, the head of the center right party governing with Letts’a left of center Democrats, in a sudden about face decided to support the government that he said should go. 

Fractured politics

It is almost impossible to describe how Italy’s perennially fractured politics have been made much more complicated by Berlusconi’s personal, (rather than political), problems. The former Prime Minister has been recently convicted of tax fraud. Beyond (mostly symbolic) jail time now he is also facing expulsion from the Senate, since the law prevents convicted politicians from holding public office.

It is clear that Berlusconi’s initial move to cause the fall of Letta’s coalition government was part of a scheme to avoid his expulsion from the Senate. However, facing a rebellion from within his ranks, the 77 year old former Prime Minister was forced to retreat.


Hence Letta’s political “victory”. With Berlusconi’s political threat out of the way, he won a vote of confidence in both the House and the Senate. So, all is well in Rome?

Not so, and not by a long shot.

Survival is better than death; but it does not mean ability to govern. Letta’s coalition government has minimal latitude, while Italy faces gigantic systemic problems that would require bold moves backed by solid political favor.

Italy’s economy contracted almost 8% since the beginning of the recession, Europe’s worst score, unless you count virtually bankrupt Greece, the unmatched basket case. Its unemployment rate is above 10%, youth unemployment more than double that. Its national debt will soon reach 140% of GDP. At the same time, in this globalised economy, the Italians are the most insular and provincial within Europe. A recent poll ranking the knowledge of English among average citizens in Europe shows that in Sweden 77% of the people speak English. In Germany it is 67%. in Italy a mere 6%. 

No investments

Overall, there is little or no investors confidence in Italy as a place to do business. Businesses cite high taxes, minimal labor mobility, poor infrastructure, public sector inefficiencies and, of course, corruption. And without investments and enterprise there is no way to make the economy grow and create new jobs.


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