Embracing reforms is a vote for Italy’s future

The resignation of Prime Minister Romano Prodi and the continuing uncertainty dominating Italy ‘s political and economic landscape underscore Italy ‘s fundamental need for electoral and structural reform and greater deregulation. The necessity to boost competitiveness and growth is indispensable to the nation’s future.

 Prime Minister Romano Prodi and the continuing uncertainty dominating Italy ‘s political and economic landscape underscore Italy ‘s fundamental need for electoral and structural reform and greater deregulation. The necessity to boost competitiveness and growth is indispensable to the nation’s future.

After Prodi’s 20 months as prime minister, the main economic and political challenges remain largely unresolved, the deep level of political polarization demonstrated in the 2006 election remains unchanged, and Italy ‘s failure to adapt to an increasingly globalized world remains one of its principal challenges.

With one of the world’s lowest birth rates, Italy is increasingly becoming a nation of pensioners, ruled by pensioners for the sake of pensioners, a gerontocracy with little, if any, meritocracy.

In Italy , much of the perception of politics is that the purpose of officials is not to serve the public but to take from it, and if and when necessary distribute the spoils to followers and loyalists in order to preserve and extend the officials’ survival.

For Italy ‘s young, upward mobility is not a fluid process. Personal connections or tutelage under a “sponsor” becomes a more secure guarantee to success.

Some of the best and brightest of Italy ‘s young opt for opportunities abroad to find greater meritocracy and equitable results for hard work.

In the corporate realm, many of Italy ‘s largest multinationals have adapted to globalization.

However, many small and medium size companies, largely responsible for the nation’s post-war economic success, are failing or simply unable to compete with cheaper Asian products and labor costs.

For a society which has enjoyed generous state benefits and entitlements for many decades, amending or revoking what is considered a public benefit and expectation will be extremely difficult.

This engenders not only an economic change but a cultural one in a country where dependence upon the state prevails in many quarters and remains significantly rooted in the political culture.

Simply put, reform is inevitable.

The longer it takes, the more difficult is the task and the greater the sacrifices required.

Former prime minister Silvio Berlusconi currently leads in polls and has threatened mass demonstrations to ensure a snap election. He remains the only figure able to unite disparate forces on the right.

Although the left technically achieved victory in 2006, the narrow margin deprived Prodi of a popular mandate and political uncertainty complicated the need for the emergence of a strong government capable of guiding Italy through a desperately-needed economic reform process. Prodi’s long-term survival as leader was always tenuous and uncertain.

Leading factions on the left have consolidated into a single entity, the Democratic Party, under the leadership of Rome ‘s mayor Walter Veltroni, who has invited all parties to join the Democrats in an interim government to carry out reforms.

Despite these consolidations smaller parties are still able to threaten the survival of any government under the current electoral system.Before the next elections, it is necessary to form a temporary technocratic government with the specific mandate of reforming the electoral law and preventing the repetition of the status quo in which small parties are able to hold a coalition government hostage.

Should the small parties impede this possibility, then the major parties should consider the formation of a temporary grand coalition of the center with the primary purpose of implementing electoral reforms.

Neither Prodi nor Berlusconi could head such a coalition, due principally to deep-seated personal animosities, the polarizing nature of both personalities, and the wider public rift. A highly respected apolitical technocrat would be the most likely candidate.

Failure to agree on electoral reform would result in another time-consuming and divisive election that would change little in the short-term and would contribute to further uncertainty with significant economic and political consequences, both domestically and internationally.

In Europe and throughout the world, Italy is a nation that continues to punch below its weight. Italy ‘s traditional political establishment pales in competence when compared to its entrepreneurial class.

Italy remains a nation unable to unleash its wealth of talent, much of which continues to seek opportunities abroad, significantly hurting the nation’s competitiveness and growth.

Much of Italy ‘s gerontocracy and powers that be retain a vested interest in maintaining the current state of gridlock and overregulation.

No matter how many elections are held, the status quo will not change until the necessary political and economic reforms are enacted and backed by a serious commitment to implement them.

Marco Vicenzino is the founder and director of the Global Strategy Project in Washington , D.C. He can be reached at msv@globalsp.org