What does the Italian government need to remain viable?

This post was written for the Winter Issue of the World Policy Journal, which is entitled “Europe Under Fire” and analyzed the struggle for unity in Europe. Each issue begins with the Big Question: an overarching question that frames the magazine and provides insight into the long form pieces to come. In this issue focusing on Europe, the Big Question was: “What does your government need to remain viable?”; They asked David about Italy; below his short answer.
In the same article “The Big Question: The Throes of an Identity Crisis”, you may also find the much more relevant commentary by Prof. Yanis Varoufakis on Greece.

Italy: In Need of Cultural Revolution

Italian stagnation is worrisome. Socioeconomic conditions are hardly sustainable, and the political opportunity to implement reforms in the immediate aftermath of the crisis has been wasted.

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Now, Prime Minister Renzi has taken full responsibility for long-awaited reforms and is expected to reform the electoral system, the labor market, and even the bicameral legislative system. Implementing such radical reforms would certainly make this government more viable. But Italy needs much more than that.

First, the greatest service Renzi can carry out in the interest of Italians is boosting an entire ‘cultural’ revolution. Italy must modernize, and that requires a mentality change as much as it requires a technological change. Italy desperately needs to complete the revolution in information and communications. Modernization should sweep both the public administration and private sector, particularly those thousands of SMEs, which form the core of the system of Italian production.

Second, Europe. The playing field for domestic policy has extended far beyond national borders. About 60 percent of Italian domestic policies are debated at the European level, and it is to Europe that the Italian government must look to reverse its downturn. A common European patent system or the introduction of policies supporting internal demand in the north of Europe would highly benefit Italian innovation and exports, for instance.

There is ample margin for action, but there should be no illusions that Italy will get back on track overnight. Labor and political reforms are no panacea, but are a necessary condition for the Italian government to remain viable. However, to recover fully, Italy will probably have to wait for the end of a slow cultural revolution, which is a less tangible but more relevant legacy Renzi can leave.





This post was originally published by the World Policy Institute, as part of the article “The Big Question: The Throes of an Identity Crisis”, for the World Policy Journal, Vol. XXXI, No. 4, Winter Issue 2014/2015, Europe Under Fire.

You can contribute to the discussion on twitter #EuropeUnderFire (have a look at the #EuropeUnderFire storify)

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