How a Great Power Falls Apart
Decline Is Invisible From the Inside
In November 1917, the Italian army, which had been trying to seize the city of Trieste for two bloody years, was routed by the forces of the Central Powers at Caporetto, a small town near the border with present-day Slovenia. Thousands were killed and wounded; nearly 300,000 Italian troops were taken prisoner. Ever since, Italians have colloquially described any major setback, especially one that can be attributed to hubris or inadequate leadership, as a Caporetto.
On Sunday, December 4, Italian Premier Matteo Renzi experienced a Caporetto of his own. His ambitious strategy of making constitutional reform the centerpiece of his government’s legislative agenda was defeated when 60 percent of the electorate voted down his package of reforms. Analysts had expected a much closer result, so the defeat left Renzi’s credibility—already tattered before the vote—in shreds. Renzi has resigned and a formal government crisis has begun.
Renzi and his constitutional affairs minister, Maria Elena Boschi, took this major risk in order to make decision-making easier. The reform would have transformed the senate into a much smaller assembly representing Italy’s regions and big cities and would have sharply limited its role in passing ordinary legislation. Meanwhile, the senate would have no longer been able to express a vote of no confidence in the government. The other body of the legislature, the chamber of deputies, would have retained its powers. In brief, by weakening one body in favor of the other, Renzi hoped to eliminate the gridlock that resulted from so-called perfect bicameralism.
The constitutional reform was flanked by an electoral law, the Italicum, which gives a guaranteed majority in the chamber of deputies to any party (not coalition) capable of obtaining more than 40 percent of the vote, or to the winner of a runoff election between the two most-voted parties in the event that no single party reaches this threshold. Renzi’s opponents feared that a party chosen by a mere third or less of those voting in the first ballot could win a majority in the second ballot and then face far fewer institutional checks thanks to a weakened senate. The loudest critics of Renzi’s approach even evoked the specter of a deriva autoritaria: a shift toward authoritarianism.
This charge was absurdly overblown, but it resonated with the Italian electorate. The Fascist era left an abiding distrust of rule by one strong leader. The institutions of the current constitution were designed precisely to prevent that. They were also designed to ensure that the Christian Democrats and the Communists kept postwar political conflict within acceptable bounds. In this respect, they worked, although they have also contributed to creating a political culture that prizes consensus at almost any cost.
The main reason people voted against the reform, however, was Renzi himself. The electoral campaign ultimately became a referendum on Renzi’s thousand days in office. To be sure, television time was dominated by arcane debates over the reform’s alleged merits and demerits: numerous jurists and political thinkers, including many who had argued for decades against “perfect bicameralism,” were scandalized by what they regarded as the reform’s shoddy drafting. But such fine-grained legal reasoning was not the reason that 70 percent of the electorate went to the polls, nor was it why so many working-class and young voters opted for no. Ordinary voters condemned the reforms because they are becoming increasingly angry at their economic plight, which they believe Renzi ought to have made his priority.
Italian living standards have stagnated since the introduction of the euro in 1999, leaving the country at the bottom of the EU growth table along with Greece. Its public debt has risen remorselessly and now tops $2.4 trillion. Tax evasion is well above the European average—no wonder, since taxes on middle and upper incomes are punitive and are depressing consumption. The brain drain has become a sinkhole, as Italy’s best and brightest flee to countries where they can find work suitable to their talents. Possession of a university degree, or even a postgraduate specialization, is no longer a guarantee of better employment prospects. Nearly half of all those under 25 are out of a job—and since the state does not support them families have to, which is further depressing consumption and making it increasingly hard for middle-class families to reach the end of the month. The Renzi government has passed a jobs act that has liberalized the labor market and created jobs, but the much of the public is in no mood to listen to those who tell them that more deregulation is needed (although it probably is).
The referendum was important in this regard, since everybody knew that Renzi wanted the government to have a freer hand in order to press on with the structural reforms that the EU and other international bodies regard as prerequisites for Italy’s return to growth—and economic expansion is the only way out of the debt trap that Italy has lumbered into. Yet painful reform is precisely what the Italian people have unambiguously rejected. To paraphrase an Italian idiom, they have "their pockets full" of austerity.
In hindsight, it would have been better if the Renzi government had emphasized domestic issues before tackling the complexities of constitutional reform. Something was done, but not enough. The lengthy and incomprehensible rows over how (or whether) the new senate should be elected and over the byzantine sub-clauses of the Italicum have alienated many people who initially thought that the new leader was a breath of fresh air. When he came to power in 2014, Renzi unquestionably tapped into a desire to scrap a political class whose incompetence and corruption, not to mention chronic litigiousness, were the principal cause of Italy’s enduring economic malaise.
Italians are well aware that the worst of their country’s problems were created in the 1980s and early 1990s by a generation of politicians who spent money like water and left later generations to mop up the flood. And they know that those problems were worsened in the 2000s by a generation of politicians who were unwilling or unable to take the painful decisions necessary to repair the damage done by their predecessors’ ineptness and greed. Renzi, who promised to lead a governo del fare (a can-do government), seemed genuinely different. But now he seems like just another politician. A large part of the referendum vote can be traced to delusional expectations.
The odds are that Italy’s voters are heading for further delusion. If not Renzi, who? That is the question that the country now has to face. The center-left Democratic Party (PD), which Renzi still leads, is now in complete disarray; Renzi was undermined during the electoral campaign by two bestie nere, former premier Massimo D’Alema and Renzi’s predecessor as party leader, Pierluigi Bersani, who both campaigned actively against the reform. In the grand tradition of Italian politics, their strategy was to wear down Renzi’s hold over the party through a war of attrition. They have partly succeeded. But in the meantime, the PD has lost all credibility as a party of government.
The political right is even less credible. It has two main components: the right-wing populist Northern League (LN) and Silvio Berlusconi’s Forza Italia. The LN’s leader, Matteo Salvini, is one of the few politicians in the Western world who makes U.S. President-elect Donald Trump look moderate. His anti-EU, anti-immigrant, pro–Vladimir Putin outbursts induce vertigo. Berlusconi, of course, needs no introduction. A convicted criminal in his eighties who recently endured a major heart operation, Berlusconi is not, to put it mildly, an obvious choice as national leader. And, of course, he was a catastrophe the last time he held the premiership: by the time he left office in November 2011, Berlusconi excited derision and repugnance in equal measure across the whole of Europe. Forza Italia is anyway bitterly split between those who wish to ally with the league and those who wish to occupy a possibly nonexistent center ground. The two parties do cooperate in government at regional level, but they would be treated as pariahs by the rest of Europe.
The only alternative to the PD and the Berlusconi-Salvini axis is the Five Stars Movement (M5S), which currently leads in the opinion polls. Beppe Grillo, the antiestablishment comedian who leads the M5S, wants an election as soon as possible. He is well aware that his movement, a vast network of opinionated netizens who use his blog as their ideological lodestar, is a thin political reed. The M5S is lacking in experience (although some of its parliamentarians seem to have learned the dark arts of politics remarkably quickly) and where it has been in power, its record has been mixed, to use a generous term. The M5S’s mayor of Rome, Virginia Raggi, has become a national laughingstock since her election last June. The greater the delay between the referendum vote and fresh elections, the more likely it is that Grillo’s movement will lose its sheen in the eyes of the electorate. Its current levels of support are volatile.
The only thing that united Berlusconi, D’Alema, Grillo, and Salvini was their loathing of Renzi and their determination to bring him down. The ex-premier spoke derisively of the “motley crew” that was supporting the no campaign, and it is hard not to agree with him. The central problem of Italy’s politicians in the so-called Second Republic (that is, the period since the collapse of Christian Democracy in 1992–93), is that they have been destructive, not constructive. They have proved inept at the hard, patient work required to address Italy’s numerous social and economic problems.
This is why Italy has had to resort three times in the last 20 years (during the governments of Carlo Azeglio Ciampi, Lamberto Dini, and, most recently, Mario Monti) to technocratic rule. A great many non-Italians would like to see the emergence of another such government now: it would be reassuring for the bond markets if a “government of professors” ran the country for the next year or two. However, any such government would run into the same question of legitimacy as the Monti cabinet did. A government of technocrats cannot ask the electorate for reforms that require major sacrifices.
But no imaginable elected Italian government right now would ask the Italians to make major sacrifices. Renzi was the bravest Italian leader on offer in this regard, and look what happened to him. It is unprofitable to speculate even about the many known unknowns that are emerging in the wake of the electoral result, let alone to try to forecast the unknown unknowns that will blindside everybody in the coming months. All one can say with any certainty is that there will not be an election until the constitutional court has expressed judgment on the constitutionality of the Italicum, which in any case only applies to the chamber of deputies. The court has said it will decide on January 24, 2017. The Italicum has many of the same faults as the so-called Porcellum, the law that preceded it, so it might well run into judicial criticism. In that event, Italy’s default electoral law would be, in effect, proportional representation. But no stable government can possibly be elected in Italy by proportional representation.
As this article was being published, President Sergio Mattarella appointed the respected Foreign Minister Paolo Gentiloni as premier-designate. If he manages to form a government that commands both chambers of parliament, he will steer an administration drawn from the same parliamentary majority that supported Renzi, but it is hard to imagine this state of affairs enduring for more than a few months. The PD, the main party of the majority, will almost certainly plunge into bitter infighting in the New Year.
After Caporetto, Italy’s army fell back to the Piave River, almost at Venice, where it rallied and fought heroically to stop the Austrian advance. In the present crisis, it is hard to identify where the rallying point will be. Italy is in full headlong retreat from the EU and from any process of reform. Its political class now has the clear responsibility to say what it wants in place of Renzismo. But the truth of the matter is that it does not know.