Friday, July 6, 2018

Avanti populisti (2018)

From the July 2018 issue of the Socialist Standard
In the elections in Italy in March the collapse of the Democratic Party combined with the lack of confidence in Berlusconi’s party (Forza Italia) paved the way for the 5-Star Movement (M5S) and Lega Nord. Compared with 2013, M5S gained about 2 million votes, while the Democratic Party lost 4 million. Berlusconi’s party also shrank by about 2 million. Lega with 17 percent of the votes (5.7 million), a little bit less than the Democratic Party, was the real winner of the elections.
M5S and Lega together represent only 35 percent of the registered voters, yet, according to the voting system in use, this is enough to rule. The problem is that these two populist currents were traditionally opposed to each other, and were not above exchanging cheap shots during the electoral campaign. Thus for many, given the outcome of this last election, the only way out would have been yet another general election in the late summer or autumn.
However, M5S and Lega have managed to agree on a political contract to form a government together. It is evident that many who voted M5S to protest against the Democratic Party right-leaning policy – Matteo Renzi, its leader, was mocked as a younger copy of Berlusconi – will not be happy with this coalition, nor will those who voted M5S for its anti-establishment position. Conversely, Lega with only 17 percent of votes is in power and for the first time has managed to rebrand itself as a national party. Not bad for a party that once wanted to split the North of the country from the rest.
We analysed the M5S after their first electoral ‘success’ in 2013 (Socialist Standard, May 2013). At that time as now, this movement – they do not like to call themselves a party – played the moral card. This resonates very well with Italians who are sick and tired of being governed by a corrupt elite. This is a problem that Italy has had since its artificial foundation back in 1861, and made the fortune of several parties in the past, including the Communist Party in the 1970s and the Lega itself in the 1990s.
Lega Nord was badly hit when it was involved in a series of scandals. Amongst others one involved its founder, Umberto Bossi and his son ‘the trout’, for stealing money from the party’s funds; another linked Lega to the world’s most powerful organized crime syndicate, the Calabrian Ndrangheta. Matteo Salvini, the new leader, managed to dissociate the party from all of this and recycled the usual anti-EU, anti-immigration, and anti-establishment mantra. Salvini tried to get some international visibility lining up with Marine Le Pen, Geert Wilders, and of course Donald Trump (jokes in Italy made much of the fact that Trump did not know who Salvini was, while the latter was proudly going around with a selfie they took together).The 5-Star Movement also had to rebrand itself somewhat to gain distance from its founder, comedian Beppe Grillo. Luigi Di Maio emerged as a main figure..
M5S and the Lega have several things in common. Both are anti-EU. In the European Parliament the 5-Star Movement lined up with Nigel Farage’s UKIP. Both want or at least wanted a referendum similar to Brexit. This also created some uncertainty around whether they would be able to form a coalition government, since the President of the Republic, Sergio Mattarela, could in principle veto it.
Both M5S and Lega promised lower taxes. Lega based a large part of its campaign on the flat-tax, which would be 15 percent for all, poor and rich. M5S defined it as a ‘flop-tax’, because it won’t work and would not encourage spending; on this they are right, it wouldn't. M5S proposed to simplify the tax system reducing it to three levels of income: 23 percent for low income, 37 percent for average income, 42 percent for income above €100,000 a year. Eventually M5S and Lega will probably compromise with two levels.
Both M5S and Lega want to abolish the current hated pension law (legge Fornero). They seem to agree on the 'quotient 100'; this would mean that if a person starts to work at the age of 30 they could retire at the age of 65 (65+35=100), but if one has started working at the age of 20 one could retire at the age of 60 (60+40=100). They also promised to increase the minimum pensions.
The iconic warhorse of the M5S was the so-called 'Reddito di cittadinanza' (basic income). Many believed that this was a vote-catcher, particularly in the south of Italy. The basic income is the unconditional right to have an income; this is often confused with the minimum income, which is a subsidy to provide a basic standard of living but is conditional on having a wage. To be precise, M5S proposed something in between these two. Lega, however, is not in favour of such a basic income and proposes an 'autonomy and inclusion income' which would provide very meagre benefits for the poor.
Claudio Borghi, Lega’s economist, is pushing the idea, which is not even his own, of establishing treasury mini-bonds (€1 to €500), to create an alternative money to the euro within the EU regulations. These, according to Borghi, will be used to pay off the public arrears; people would be able to use them to pay taxes or buy services offered by the state. This mini-bonds will not pay interest nor have maturity. Borghi sees it as a first step towards Ital-exit. This is a monetary measure, which as such does not address the structural problems of the Italian economy. If anything it just aims to mimic a monetary devaluation.
Finally, the M5S movement also promised to establish a Public Investment Bank similar to the Bpifrance to help banks and enterprises and finance public works.
We are facing the usual Keynesian economic strategy to encourage economic growth and promote spending, where the state tries to boost the economy via lower taxes for enterprises and entrepreneurs (Public Bank and flat tax), and more money to low income people via basic income, an anti-austerity policy. As we know, it will not work, but this is all that in a time of crisis the bourgeoisie can come up with apart from austerity.
(See the blog of our Italian group: