Enrico Letta Focuses on Europe to Achieve Growth and Stability in Italy

The Political Scenario

Enrico Letta, 44, leads coalition government which is the Italian version of a grand coalition called larghe intese (broad agreements. After a hard-fought electoral campaign, the two main competitors (Partito Democratico of center l left) and Silvio Berlusconi’s Popolo della Libertà 71121-imgof center right agreed to form a government with SceltaCivica), a smaller political force created by Mario Monti, the technocrat who succeeded Berlusconi as Prime Minister late in 2011 and then led the country to general elections in February.
The main opposition force is the M5S (Movimento 5 Stelle), led by comedian turned politician Beppe Grillo, who benefited of a great electoral success and came out as the third party in Parliament as it attracted voters disgusted of the traditional political system. The PD unsuccessfully tried to make an alliance after the election with the M5S and was then somewhat “converted” to the grand coalition by the president of the Republic Giorgio Napolitano (who in Italy has the power of appointing the government). Then there is the separatist Northern League who rules in the three major regions in the North of the country, a former Berlusconi ally with a much softer stance towards the Letta government. On the far left side we have SEL (Left, Ecology and Liberty) led by the governor of the southern Region of Puglia Niki Vendola, a small ally of the PD in the election campaign who moved to the opposition when the grand coalition was formed.
Napolitano managed to seal the grand coalition only once he was elected by Parliament for a record second 7-year term and is the only stable element in today’s Italian political scenario as the Letta’s government survival is linked to the willingness of the two once foes forming the coalition to risk losing supporters.
The February’s elections have resulted in the central left prevailing over the PDL only for a handful of votes over the central right in both houses of Parliament but gaining a commanding majority in the Lower House, which was not the case in the Senate, where the lack of absolute majority forced the PD to make the grand coalition even at the cost of the resignation of its chief Pierluigi Bersani.
The Letta’s government is thus the product of a pragmatic attempt to have a functioning government and to maintain an European stance. Both the PD and the PDL have declared this government to be the result of their taking on their responsibilities, with Letta as PM and the PDL Secretary Angelino Alfano, 42, as his deputy. No one who had a main role in the political scenario in the last few years is part of the government.
Given the deep economic crisis that hit the country, there is no certainty that the new government will be able to survive should the social protest widen, though the ease of the pressure of the markets over the Italian debt is helping.
There is no certainty as well that the new government will be able to ensure in the Parliament a climate favorable to the approval of institutional reforms (such as the move towards a semi-Presidential system, the reduction of the members of Parliament, the conversion of the Senate to the House of Regions, the reassessment of the Local Governments, the regulation by law of the political parties and the abolition of the public funding for the parties’ spending. The electoral law is an issue as well and many believe it wil be changed before next general elections.
In order to avoid that diversities over the institutional reforms jeopardize the government stability, Letta has proposed to create a Commission including all political represented in the Parliament will to discuss the reforms and deliver proposals in 18 months time, over which the government will draw its conclusions.
Whatever will be its future, it is believed that Letta’s government will mark a generational, but not only, turning point in the political scenario, as far relations between social forces and institutions, and within the social forces themselves, are concerned.

The Economic Plan

According to Letta, remaining part of Europe represent the central goal of Italy “should Europe fail, we would all be lost, in the North as well as in the South”. As he took office, Letta organized meetings with the main European leaders. While confirming his willingness to reduce the Italian debt and deficit (by reforming the Public Administration and fighting against inefficiency, money-wasting, and corruption), Letta has also advocated the gradual reduction of the austerity measures and the need for economic growth, in order to revamp the economy while maintaining social stability.
Letta has thus successfully asked the European Commission to end the procedure for excessive deficit, to extend the deadline for the reduction of the debt, to loosen the constraints of the Stability and Growth Pact and to support the capital spending by the government.
Such policies would allow Italy to reduce the fiscal pressure (especially taxes over labor), to fight the un-employment, especially among youngsters, and to carry out a policy of public investment and revamping of the industrial system in the fields of innovation, energy saving and helping small businesses.
Such measures could also include a deferral of the scheduled VAT increase in July, the introduction of solidarity policies, the revision of a property tax introduced by Monti and support for workers at risk, those employed in specific industries or areas as well as those left behind by a recent reform of retirement which left thousand with no salary and no pension payment . These policies will have not only a strong social impact, but also help domestic consumption to recover.
Some also predict that in order to raise resources and spur growth at local level the Letta government could launch a new privatizations and liberalizations wave by putting for sale government owned assets that could attract investors from all over the world given the large available liquidity, from the US to Japan.

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