Wednesday, May 17, 2006

the new italian government: left-wing breakthrough or more of the same?

The new Italian Government, headed by Premier Romano Prodi, took office May 17 ending the long period of doubt following the hotly contested election in that country (see previous posts). Prodi was formally appointed Prime Minister by the new President, Giorgio Napolitano, a former member of the PCI (Italian Communist Party) who was himself chosen only last week, after a younger ex-communist, former Premier Massimo D'Alema, was judged too controversial for the theoretically ceremonial post. Outgoing Premier Silvio Berlusconi, while never quite accepting Napolitano (or for that matter Prodi himself), appears resigned to a long stay in opposition although promising the advent of a new Liberty Party that would unite the right-wing opposition in parliament by this Fall.

The new Government is something of a mixed bag. While attention has focused on the selection of Napolitano and other former PCI members D'Alema (who shares the vice premier position as well as heading the Foreign Ministry) and Fausto Bertinotti (an unreconstructed communist who serves as president of the Chamber of Deputies), many of the key positions are filled by relative moderates. These include the second vice premier, Francesco Rutelli, the leader of the moderate left Margherita (Daisy) Party; yet another former Prime Minister, Giuliano Amato, at the Interior Ministry (more important than it sounds because of the country's history of internal security problems); the Defense Minister, Arturo Parisi; and, most important of all for tax policy, the new Minister of Economy and Finance, Tommaso Padoa-Schioppa, a respected if left-leaning 66-year old economist. The allocation of ministries reflects an interesting and arguably (for the extreme left, anyway) disappointing shift of priorities: as in Israel, where Labor Party Leader Amir Peretz chose the Defense Ministry over more economically-oriented positions, several of the most prominent leftist leaders--most notably D'Alema--appear to have opted for positions with a higher national or international profile rather than those with direct implications for economic redistribution. Also notable is the paucity of women in top positions, outside of such traditional female domains as Health, Equal Opportunity, and so forth. An important exception is Emma Bonino of the aptly named Rosa nel Pugno (Rose in Fist) Party, who was denied the Defense Ministry but given the European Affairs portfolio (potentially significant as Prodi seeks to re-orient the country toward a more European and less pro-American role).

The effect on tax policy is difficult to discern. In an early speech Prodi listed his main priorities as withdrawing Italian troops for Iraq (but not yet Afghanistan); reinvigorating the economy; and restoring "serenity and tranquillity" to the judiciary, an thinly veiled reference to what were widely seen as efforts by the Berlusconi Government to intimidate the magistratura on politically sensitive issues. With respect to finances Prodi pledged to keep the deficit under 3 percent of GNP as required by international agreements and to intensify the fight against widespread tax evasion which he called "an ethical crisis." More specific decisions, including the fate of Prodi's campaign proposal for increased taxes on financial income, must apparently await consultations with his numerous coalition partners. A more assertive approach was demonstrated by the Region of Sardinia, one of Italy's poorest but paradoxically the preferred vacation destination of much of the Italian and European jet set, which recently levied a large new excise tax on yachts and other luxury items: Berlusconi himself was required to foot a rather extensive tax bill.

Italy being Italy, there is always something to fill the vacuum. Item number one is the burgeoing soccer scandal, which began with telephone intercepts demonstrating the interference by Juventus, a premier club, with the selection of referees for key games and has now spread to cover drugs, gambling, and even illicit intervention with the selection of the national team for the World Cup in Germany this June. There is also the usual run of polemica, a term somewhere between debate and insult, in the Italian press. A recent example occurred when Berlusconi criticized the behavior of Italy's handful of lifetime Senators, which includes former Presidents and other luminaries, for voting in favor of the new Prodi Government in a recent vote. Former President Francesco Cossiga, who is apparently past worrying what anyone thinks of him, replied that he didn't need any behavior lessons from a paperone (literally, an overstuffed goose) like the outgoing Prime Minister, adding that the behavior of Berlusconi's followers had transformed the Senate "into an atmosphere reminiscent of a bad neighborhood in decadent Rome." Some things never change.


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