Economic giant but political pygmy

Date: 21/05/1998

Italy's past is still preventing it from becoming a major political player in the Union. Kevin Woodfield explains why

ITALY has received official confirmation that it is one of Europe's leading economies, but it remains a political pygmy in the EU's corridors of power.

The country may have surprised everyone by securing first-wave membership of economic and monetary union, but a legacy of political weakness means it is condemned to remain outside the political engine-room of the Union for years.

"We have seen in Italy the development of coalitions more stable than before," says Patrick McCarthy, a professor of European Studies at the Johns Hopkins University in Bologna and an expert on Italian politics.

"They wanted the current government to pass two budgets and, by this autumn, it will have passed three, but there is bound to be a time lag between Italy achieving stability and having any influence in Brussels."

With the UK sidelined, speculation centres on whether Rome can tip euroland away from domination by France and Germany towards a multipolar system, and whether it can rebalance the Union from its perceived northern orientation towards Mediterranean interests.

Italy is a member of the Group of Seven club of the world's wealthiest industrial nations, but it comes nowhere near punching its weight in the global or European boxing ring.

When the recent Brussels summit had to broker a deal on the presidency of the European Central Bank, all the bilateral meetings were held between the British, German and Dutch premiers and the French president. Italian Prime Minister Romano Prodi, a G7 leader, was left to kick his heels for 12 long hours with those from the likes of Luxembourg, Denmark and Portugal.

Admittedly, there are now signs that the Italian establishment no longer wishes to stay in the EU's metaphorical dining room while the big boys do the deal-making next door.

Massimo D'Alema, leader of the formerly Communist PDS which dominates the current coalition government, found time to rise above the domestic fray recently to declare that Italy's influence in the world should be more in line with its economic strength.

"That's the first time anyone has said something like that since Mussolini," says McCarthy. "Foreign policy has been a strong ideological issue in Italy, with the United States versus Russia reflected in the Catholics versus the Communists, but not as a player."

Indeed, the Cold War is the origin of the country's sense of inferiority on the international stage. The collapse of the Soviet Empire signalled the end of an all-too-cosy political status quo with consequences, according to some analysts, every bit as far reaching as those for eastern Europe.

For 30 years until the early Eighties, and periodically thereafter, Italy's prime ministers came from one party, the Christian Democrats - staunchly Catholic and Atlanticist - indulging in corporate favours and widening budget deficits, but, central to it all, enjoying the tacit support of the US, NATO bases on its soil and the objective of keeping the Communists out of power.

Italian governments ought not to be called unstable, even though they have lasted an average of just eight and a half months since 1945. Weak would be a more apt description.

It has been said with excusable exaggeration that the patchwork of small states which make up the Italian pensinsula, for centuries under the heels of powerful neighbours Spain, France and Austria, came back under foreign domination after 1945. Indeed, so successful was this particular exercise in US containment that Italy could not develop the alternating system of democratic government so important for keeping corruption in check.

Instead, a stifling bureaucratic culture was able to mushroom. With the collapse of the Berlin Wall, an entire political class was put on trial in the 'clean hands' anti-corruption drive of the early Nineties.

A shaken Italian electorate turned first to media magnate Silvio Berlusconi's unashamed brand of big business government but, when business and government became too mixed up, the voters took the risk in the spring of 1996 of putting the Left in power for the first time. With laws to curtail the number of political parties, the prospect of alternating right-left governments was born.

The current Olive Tree coalition is a repackaging of former Communists together with a smattering of Greens, Socialists and centrists, with economics professor-turned-populist Premier Prodi at its head.

In theory, with EMU membership in the bag, the stage is now set for Italian assertiveness abroad. But Prodi's coalition remains a minority government, which has survived into its third year in office only with the support of the 35 Refounded Communist (RC) party deputies, the unreconstructed rump of the Italian Communist Party after its split at the start of the decade.

In the short time available to him, Prodi and Treasury Minister Carlo Azeglio Ciampi have steered through some genuinely structural cuts in the budget deficit, but political constraints have compelled them to combine these with a cocktail of delayed spending, tax increases and creative accounting to win euro-zone membership.

Indeed, on two crucial occasions - Italy's otherwise successful leadership of a multinational army to defend aid supplies to Albania and over the extension of NATO membership to eastern Europe - RC deputies have forced the government to side with the opposition to hold on to power.

To be a big player, Italy still needs a profound modernisation of its political economy - a process begun but not ended by the 'clean hands' investigations.

The central features of such change are the bipartisan negotiations to reform the country's constitution and system of elections launched by the government.

Under discussion are ways to strengthen the executive by increasing the powers of the prime minister, the election of the country's head of state by popular vote instead of by parliament, sweeping reform of the judicial system, and greater powers for regional and local government in certain policy areas.

Electoral reform seeks to give another push to the tentative progress made towards moving from static government based on coalitions around a dominant political centre to two big coalitions on the right and left which hold power alternately.

Some of the reforms - those involving the president and local government - have made headway.

But the process is proving protracted and cumbersome, with the major issues involving prime ministerial powers and the election system unresolved.

It has not helped that Berlusconi, now opposition leader of the centre-right, faces corruption charges in the midst of judicial reform.

The Italians will continue to fight hard for their sectional interests within the EU - over issues such as increasing milk quotas, protecting their olive oil producers, or defending their railway system - but they are a long way from becoming shapers of overall policy in the Union.

It is rare indeed to see Rome come up with a 'big idea' or form an alliance with key players to achieve some far-reaching reform of EU policy.

Paris/Bonn-style summits discussing how to "bring Europe closer to the citizen" or develop the principle of subsidiarity in EU decision-making have not been Rome's forte.

Until Italian political life acquires some of the predictability to be found in Bonn, Paris and London, Prodi and his successors had better get used to sitting with the backroom boys.

Major feature on Italy in the EU.