Crazy Italian Politics!

Italian politics has been racked with scandal forever. It is one of the most corrupt Western governments which is never too far from a scandal. To make matters worse Silvio Berlusconi has been at the forefront of Italian politics for over two decades. Berlusconi has never been far from a scandal, especially when it comes to sex. Despite being over 70, Berlusconi has been accused of many sex crimes throughout his career including having sex with underage prostitutes at his infamous ‘bunga bunga’ parties. The idea that a politician accused of statutory rape being able to maintain a political career is unfathomable to most of us. Yet in Italy he weathered every scandal, every time you thought he was down and out he just came right back. It is quite impressive if you think about it, but it reflects badly on Italy.

Finally in August of this year he was convicted of tax fraud and sentenced to four years in prison. He won’t serve any of the sentence as he is over 70, but he was thrown out of the Senate later that month. Despite this he still is the leader of Forza Italia! It just shows you how crazy Italian politics can be.

In the midst of all this there was also an election to deal with. Held in February as a result of Prime Minister Mario Monti’s resignation, it resulted in a hung parliament. Here are a table of results:

Chamber of Deputies (316 required for a majority)
Leader	Party/Coalition	% of the vote	Number of seats
Pier Luigi Bersani	Common good Coalition	29.54	340
Silvio Berlusconi	Centre Right Coalition	29.18	124
Beppe Grillo	Five Star Movement	25.55	108
Mario Monti	With Monti For Italy (Coalition)	10.56%	45
N/A	Others	5.17%	13

Senate of the Republic (160 required for a majority)
Leader	Party/Coalition	% of the vote	Number of seats
Pier Luigi Bersani	Common good Coalition	31.63%	113
Silvio Berlusconi	Centre Right Coalition	30.71%	116
Beppe Grillo	Five Star Movement	23.79%	54
Mario Monti	With Monti For Italy (Coalition)	9.13%	18
N/A	Others	4.74%	14

This election is amazing for two reasons: the continued success of Berlusconi, who led the right-wing coalition ‘The People of Freedom’ and the success of Beppe Grillo and his ‘Five Star Movement’. Many in the establishment were shocked, and scared, by Grillo’s success due to bad policies such as degrowth. Yet the Five Star Movement has resonated with many Italians who agree with its views on politicians. Corruption in Italy is rampant and FSM is determined to stamp it out. They want to limit politicians’ pay and perks at a level a lot lower than it is now. They also demand term limits for politicians and an end to politicians having two jobs at the same time. This kind of rhetoric is a breath of fresh air for many Italians.

Old World Order - Italy

Population: 61 million
Area: 301,000km2
GDP: $2.2 trillion
GDP (per capita): $33,000
United Nations Security Council Veto: No

In the late 1800s the Italian mini-states and city states were unified by the Kingdom of Piedmont into one country. The newly unified Italy was immediately powerful and over the next 100 years expanded its influence and power. Italy ended up on the right side of WWI, but thanks to the leadership of fascist Mussolini, was on the wrong side of WWII. In the years immediately following WWII the Italian economy grew very well, and although it had lost influence, still did rather well as a country.

The Italy of today is still relatively powerful, although not a great power. It has the 10th largest military expenditure in the world and the 8th largest economy. As in the case of Germany, Japan and France, a problem for Italy in its future is population decline. Currently Italy is the 23rd largest country in the world with 61 million pepole, by 2050 that is expected to have shrunk to 60 million people making it the 29th largest. This decline puts huge pressure on Italy, as time goes by its working population will decrease whilst the retired population will increase. This will mean more people will be collecting pensions and put more pressure on healthcare whilst tax receipts will decline as there are fewer people working.

Politics in Italy is also problematic as it is by far the most corrupt of the nations I am reviewing. Italian politicians of all sorts get generous pay cheques, the mayor of Bolzano (a city of roughly 100,000)gets paid more than Barack Obama. Not helping the cause is Silvio Berlusconi who kept up a political career despite having sex with numerous prostitutes, some of whom were minors.

Italy also has to deal with secessionist movements in the north (sometimes referred to as Padania), Sardinia and Sicily. In Sardinia polls show up to 40% of Sardinians supporting independence. Whilst Lega Nord (a pro-Padania party in the north) is the largest party in the Veneto and enjoys strong support in other regions such as Lombardy and Piedmont. Dealing with secessionist movements is always difficult, improving the economy tends to help, as does increasing the autonomy regions have. The north of Italy is much wealthier than the south and many northerners feel that they are subsidising the poorer south. A lot of grievances could be eased if the south was economically vitalised. There are major problems with this, the south has been poorer than the south for centuries, so the inequality is structural and would require a lot of capital. Capital that Italy simply does not have.

Italian finances are in a horrific state, its debt to GDP ratio is 126%, the 2nd highest in the Western world and the 8th overall. To make matters worse Italy is one of the European PIIGS countries that needs help from its northern neighbours. Italy needs serious financial reform (a good start would be slashing politicians' pay) and money to stimulate its economy.

So Italy faces three key problems; an ageing and declining population, strong secessionist movements and a crumbling economy.

Starting to notice a pattern of problems with Western nations?

The Old World Order

It's been a year since I wrote about the rise of developing nations, a "New World Order" of sorts. I looked into five countries, and Africa, and how rapidly they were rising and what challenges they were facing. The countries I reviewed were:

1. China
2. India
3. Brazil
4. Mexico
5. Indonesia

This year I have decided to look into the countries that are currently at the top. The countries that will be faced with a lower influence in the world as other countries overtake them. I looked into how the "Old World Order" might manage its decline, or perhaps reverse it! Over the next few days I will be discussing the following countries as well as Europe:

1. United States of America
2. United Kingdom
3. France
4. Germany
5. Japan
6. Italy
7. Canada

Old World Order countries in red, Europe in green

Italian Elections

The Eurozone has been plunged back into uncertainty after the results of the general election in Italy. Thankfully the alliance of left wing parties, known as ‘Italy. Common Good’ managed to win a majority in the Chamber of Deputies, receiving 19 seats more than the 316 seats required. Unfortunately in the Senate things are not so certain as no coalition can form a majority, the closest is the ‘Italy. Common Good’ coalition which is 35 seats short of a majority. Here are a table of the results:

Party/Coalition	Deputies	% of vote	Senators	% of vote
Italy. Common Good	345	29.4	123	31.6
Centre-right Coalition	125	29.1	117	30.7
Five Star Movement	109	25.5	54	23.8
With Monti For Italy	47	10.5	19	9.1

What I can’t believe is how Berlusconi has once again returned from the political grave to terrorise Italian politics once again. Berlusconi is so sleazy, he makes Richard Nixon look saintly! Can you name any other western nation in which someone accused of having sex with an underage prostitute could maintain a viable political career? Berlusconi is an absolute joke, it was his leadership of Italy that got the country in the dire straits that it is in and he is advocating the same ridiculous ideas! Under Mario Monti’s leadership taxes were raised, Berlusconi has not only promised to abolish the new tax rates but refund Italians the extra tax they paid under Monti!

One of the big wins was for the new party, the Five Star Movement, led by comedian Beppe Grillo. The movement was formed three years ago in reaction to the huge corruption in Italian politics. Although the movement is often derided by the international media, it actually has some excellent policies in regards to politics.

·         Abolition of the provinces

·         Abolition of electoral refunds

·         Amalgamation of municipalities under 5,000 residents

·         Compulsory teaching of and examinations on the Constitution for all public representatives

·         Two term limit for each public representatives

·         Abolition of privileges for public representatives (for example: pension after only two years)

·         Prohibit parliamentarians from working in other professions during their terms

·         Salary of parliamentarians aligned to the average salary

·         Prevention of overlapping of offices for MPs (for example, one could not be both a mayor and an MP)

·         Ineligibility of convicted criminals for public office

·         Direct participation in any public meeting by citizens via the web

·         Introduction of a true class action

Despite many of these policies being absolutely fantastic for dealing with corruption, the economic calamity of Italy does need to be the top priority.

Unfortunately all this means is that Italians will be back at the polls very soon, the nature of the Senate makes it so. The main coalition will try and form some sort of minority government, but it will be weak will not last long. Keep an eye on Italy in the coming months, this is likely to be the latest flashpoint in the Eurozone crisis.

Euorzone Crisis

For all of 2012 the crisis in the Eurozone dominated the news in Europe. As always Greece got the bulk of the attention, the problem for Greece is that every budget it passes has to have massive cuts mandated by the Troika. If they don’t pass the cuts then Greece doesn’t get the bailout money and it defaults on its debt. But everytime a budget comes out there are protests on the streets as people are fed up with the austerity. It didn’t help that Greece was forced to elect a new government twice. You see, Greece’s economy is in a death spiral, Greece struggles to pay its debts so gets a bailout from the troika. In exchange for money the troika force Greece to pass tough austerity, this forces the Greek economy to shrink as there is less money. This causes businesses to lay off workers or close altogether, adding to the government’s unemployed lists and causing the economy to shrink. This means less taxes are collected by the Greek government and more spending on unemployment benefits causing Greece to be unable to pay its debts. This forces Greece to go to the Troika for money and... you get the picture. Some fear that this death spiral could cause Greece’s economy to shrink by 25% of its pre-crisis level.

Spain had a bad year too, it was forced to bailout one of its largest banks, Bankia. Thankfully the Spanish government itself did not need a bailout, but was pressured to accept one. After summit talks in June Spain’s Prime Minister, Mariano Rajoy, got a massive victory; Merkel softened her hardline approach and allowed the Eurozone to bailout banks directly (rather than bailing out countries who had bailed out banks). This also brought the Eurozone to a banking union.

There were many fears that Italy could require a bailout to stay afloat; there was a problem. Italy is one of the world’s largest economies and there wouldn’t be enough money to save it. Thankfully Mario Monti, the country’s technocratic Prime Minister, has been able to steer Italy through this crisis pretty well. Unfortunately for Italy, Silvio Berlusconi is not quite gone, he is going to run for election this year. This spooked the markets as Berlusconi is a synonym for incompentence.

In the past couple of months the Eurozone has been much quieter and many are beginning to say the worst is over. And although I am optimistic, I agree with Merkel when she says the crisis is ‘far from over’.

The New World Order

Between the Age of Discovery in the 15^th century and World War Two, European nations ruled the world, both directly and indirectly. The colonial Empires of Spain and Portugal dominating in the early years of Empire, but they were eventually leapfrogged by the French and British Empires, and to a lesser extent the Dutch Empire. Russia, Germany, Austria and Italy also played an important role, especially in the later years. By the time the 20^th century dawned the world was changing, Japan and the US were emerging powers and Germany was threatening the balance of power within Europe itself. The two World Wars that followed devastated Europe, both economically and politically, immediately after WWII the empires of France and Britain fell apart and the UK handed superpower status to the USSR and USA. Yet Europe was far from unimportant, the USSR was a European country after all, and Germany, France and Britain still commanded significant influence. But with the fall of the USSR in the early 1990s, for the first time in modern history, the most powerful and important nation was not a European one, rather the USA.

So I think I’ve made my point, countries rise and fall and everyone has to adapt to the new world order brought about every century or so. Although Europe is still far from unimportant, of the top 20 economies, nine are European and of the five countries with a veto on the UN Security Council, three are European.

The Question is where is the world heading? Who will be the new countries on the scene, which nations will challenge western power?

The truth is nobody really knows, but there are certainly contenders. Over the next few days I will write about countries I believe could take the mantle of power from the West. The big debate surrounds whether China will eventually best the USA or will another country be the one to overtake America?

The following are the countries I believe have a chance of besting the west:

1.       China – the favourite to become the next superpower

2.       India – A rising nation with a population set to become bigger than China

3.       Brazil – the big boy of the South American economies

4.       Mexico – the rising star that may not be if drug lords have their way

5.       Indonesia – the island nation could be a surprise winner

6.       Africa – as a continent it will not take power any time soon – but its day will surely come 

New World Order Countries in red

G8 Summit Crucial in Greek Crisis

The G8 meet in Camp David, Maryland, United States today. The group represents the eight most powerful industrialised nations; Canada, France, Germany, Italy, Japan, Russia, United Kingdom and United States as well as a representative from the EU. Also attending some of the G8 meetings are Brazil, China, India, Mexico and South Africa. The main focus of the meeting will be is the world’s 35^th largest economy: Greece. Obama (who is President of the G8 this year) is urging European leaders to come to an agreement to try and sort out Europe’s failing economy. Obama believes that what happens in Europe is extraordinarily important.

The G8 summit is the first meeting between Obama and Hollande, both presidents are advocates of stimulus to try and create jobs and boost economic growth. Obama calls for the focus in Europe to move away from austerity and towards the stimulus, the Eurozone is a huge trading partner for the United States and any serious trouble would throw America’s recovery off course. Obama has called on a stimulus specifically for Greece, but America will not provide a cent of this money; he believes the Germans must pay for this. Hollande and Obama are hoping that they will be able to persuade Merkel and the Germans to re-orientate Europe away from austerity.

Although Greece and the Eurozone’s woes will be the main focus of the meeting also on the table are the likes of Iran’s nuclear ambitions and the possibility of releasing oil reserves to keep the price of petrol down. Despite this there is no doubt that Greece will dominate the talks.

G8 Countries in Dark Green (EU in light green)
courtesy of wikipedia