Italy's Absent Opposition 19 ottobre 2011 Wsj
Italy's Absent Opposition
The Democratic Party is right to criticize Silvio Berlusconi's economic polices. Too bad it has nothing better to offer.
As the results of last Friday's confidence vote were announced in the Italian parliament, Prime Minister Silvio Berlusconi covered his face with his hands and appeared almost to sob with relief when his victory became clear.
The vote was a test of Mr. Berlusconi's capacity to lead Italy in the face of mounting economic crisis. On paper, he should have lost. In struggling to deal with a massive public debt of almost 120% of GDP, he has run into serious challenges. Since Moody's downgraded Italy's debt rating to A2 from Aa2 on Oct. 4, market confidence in Italian government bonds has plummeted, and Mr. Berlusconi's government has come under increasing pressure to cut public spending. Nevertheless, the parliament last week rejected his 2010 budget report, which he had intended to pave the way toward further austerity measures.
Mr. Berlusconi's parliamentary coalition has also begun to fracture. Some members of his own center-right People of Freedom (PdL) party opposed the budget report and came out against the prime minister in the confidence vote. Announcing his intention to quit the party last month, former PdL representative Santo Versace indicated that Italy needs a new premier.
Popular opposition is also rising against Mr. Berlusconi. The worsening economic situation has eroded his popularity, already fragile after a seemingly endless series of scandals. Earlier this month, his approval rating plummeted to an all-time low of 24%. The violent protests in Rome on Saturday are a testimony to the anger that his austerity measures have provoked.
Yet against all odds, Mr. Berlusconi coasted to victory last week, winning the necessary 316 votes without too much difficulty. His triumph seems almost to defy common sense. How did he do it? The answer is simple. However resentful voters and parliamentarians may be of his austerity measures, il Cavaliere—as the flamboyant Mr. Berlusconi is known—is offering the only realistic solution to Italy's economic woes.
It is not that Mr. Berlusconi's economic policy represents Italy's best hope of climbing out of the quagmire of debt. A combination of spending cuts, job cuts and tax hikes, the government's austerity package has rightly been criticized for constricting rather than encouraging economic growth. Confindustria, the Italian employers' federation, announced in September that it was "greatly concerned" by Mr. Berlusconi's response to the crisis, and Jean-Claude Trichet, head of the European Central Bank, has repeatedly indicated his anxiety about the direction of Italian economic policy. Mr. Berlusconi's measures have also been opposed by labor unions on the grounds that they disproportionately hit blue-collar workers.
Even if it does not represent the best of all possible strategies though, Mr. Berlusconi's agenda is nevertheless the only serious package of reforms on offer. Despite crowing for Mr. Berlusconi's resignation for months, Italy's main opposition, the Democratic Party, has failed to advance any realistic alternative to his budgetary proposals. No matter how valid its criticisms of Mr. Berlusconi's austerity measures, the Democratic Party has nothing better to offer.
This is the product of a long-running crisis at the party's heart. Formed out of an unlikely coalition of left-wing parties in 2007, the Democratic Party is composed of former Christian Democrats, Communists, Social Democrats and Liberals, all of which retain a distinct factional identity within the party and pull in different directions. As party leaders have discovered, it is virtually impossible to find consensus. In the name of preserving unity, the party has increasingly offered bland centrist policies that voters have struggled to differentiate from those of the PdL.
At present, the Democratic Party's economic prescriptions remain focused on job creation and progressive taxation, issues that Mr. Berlusconi himself has also embraced. But continuing factional divisions have prevented the Democratic Party from explaining how it will achieve these objectives. Following the party's disappointing showing in Italy's May administrative elections, voters are mistrustful of this vagueness and are worried that the party might fracture if allowed to form a government. The same concerns have prevented Italy's traditionally left-wing labor unions from giving their wholehearted support to the Democratic Party, and have kept independent-minded parliamentarians on the prime minister's side when the chips are down.
Seen in this light, Mr. Berlusconi's victory in Friday's confidence vote seems less surprising. His success is a product of his opposition's failure.
But while the Democratic Party's weakness on economic policy may be good news for Mr. Berlusconi, it is almost certainly bad news for Italy. Given the likelihood of default and stagnation, it is clear that the country urgently needs a strong alternative to Mr. Berlusconi.
Even at the risk of splitting the party and incurring future electoral losses, the Democratic Party's leadership must recognize that it has a responsibility to elaborate a clear and effective economic policy focused on encouraging growth and stabilizing public spending. It will be tough, but Mr. Berlusconi's victory demonstrates that the Democratic Party needs to rethink its economic strategy from scratch if Italy is to recover.
