What is happening in Italy?”, the Guardian journalist John Foot asked himself in a great piece. Nothing new, I would say. While France and Germany are struggling to find a solution for the international economic crisis, Italy confirms itself as a millstone around the European Union’s neck because of its politicians’ incompetence.
The austerity measures passed by Berlusconi’s government in July didn’t satisfy the European Central Bank. Most of the cuts were planned to come into force only in 2013, which is the year when Berlusconi’s government ceases to exist: too late for Italy and Europe. Despite Berlusconi’s claims (until last July he had been denying the existence of the international economic crisis) Italy’s economy is terribly weak and the markets know it. Last week the European Central Bank bought a part of the Italian debt (22 billion euros) but nothing lasts forever: Italy’s markets continue falling and the country is closer than ever to default.
Europe has told the Italian government to find a solution as soon as possible but, once again, it seems that Berlusconi is “unfit to lead Italy”, as the Economist claimed ten years ago. The new austerity measures are decisive for Italy’s future but as the debate moves on, the government remains stuck on several proposals that are anything but convincing. Here the question to answer is: how to fill the Italian debt as soon as possible?
The answer is not complicated, as economic journalist Nunzia Penelope pointed out in her book Soldi Rubati (Stolen Money) According to her analysis, every year 400 billion euros are not declared. More than half of the “stolen money” is made of tax evasion (120 billions) and criminality, especially the Mafia (135 billions). Only 10% of the “stolen money” (40 billions) would allow the government to reach the goal of the balanced budget. Let’s fight tax evaders to save the country, the writer argues. This operation is part of a measure proposed by the Italian national Il Fatto Quotidiano, which is being studied by Italian opposition parties. Of course, this measure is not enough to recover Italy’s economy but it’d be a great start.
So, why none of the austerity measures that the Italian government has proposed so far are aimed at the destruction of tax evasion? Because of Berlusconi’s conflict of interests. Tax evasion is undoubtedly a chronic disease in Italy but the black economy has strengthened thanks to Berlusconi’s political system. Let’s face it: over the last 10 years Italy has been led by Berlusconi’s governments for 8 years. Berlusconi has never fought tax evasion because he knows that most of his supporters don’t like to pay taxes (he doesn’t either).
In 2009 Berlusconi did a big favor for tax evaders. Those who had deposited money abroad illegally were permitted to bring it back in Italy, having to pay a ridiculous 5% tax (the average tax in the rest of Europe is between 40% and 50%). It was a gift for the Mafia, as the law also granted anonymity to tax evaders. But Berlusconi’s masterpiece was a law passed by his second government in 2002 that decriminalized false accounting. As a consequence, Berlusconi was acquitted at 5 trials for false accounting and the Mafia, from then on, found it much easier to manage its finances.
These are only two examples of a long series: Berlusconi’s view of politics as a means to sort out his and his friends’ problems is evident. “Berlusconi’s got no ideals: he’s got only interest”, Indro Montanelli, the great Italian journalist, once said. The markets can’t expect him to find a solution for the economic crisis simply because he doesn’t care about it. His only concern is to remain Head of State as long as possible in order to defend his interests. That’s why last July he delayed all the economic measures after the end of his government.
The Economist called Berlusconi “The man who screwed an entire country”. However, while across Europe comedians were laughing at the Italian Prime Minister’s Bunga Bunga parties, Berlusconi was slowly destroying the fifth-largest economy in Europe. John Foot was not completely right when he wrote that “Berlusconi may have screwed Europe – not just Italy”. Berlusconi did screw Europe.