The looming economic crisis in Italy threatens the livelihoods of the population and liberal democracy. Nevertheless, the northern EU states have refused Europe-wide financing and credit programmes.
Italy was the first country in Europe to be affected by the Covid-19 virus. It was also the first democratic state that took measures to contain the epidemic – as it was still being called at the time, before it mutated into a pandemic.
Italy was the first country after China and South Korea to restrict basic individual freedoms, to an extent unseen since Mussolini’s fascism. Yet at least Italy tried to observe the principles of the rule of law. For instance, despite all travel restrictions, the human right to return to one’s own country was assured.
While the government’s emergency decrees entered into force immediately, the constitution requires them to be approved by Parliament within no more than 60 days and enacted into law. The Parliament did not cease to function, continuing to meet in normal sessions but observing safety rules.
The President of the Italian Chamber of Deputies, Roberto Fico, who is on the Left wing of the Five Star Movement, expressly rejected the idea of online sessions, as these would not have allowed the legal regulations to be observed in full, and compared MEPs to doctors and nurses, who must stand in the front line in the fight against the pandemic.
Italy is not a Federalist state, but the regions have sole competence in health matters and corresponding legislative powers in the field of education. The process of coordination between central government and the regions, which was never plain sailing but nonetheless succeeded in the end, was made even more difficult by the fact that certain regions, such as Lombardi, which were hit hardest by the virus, are governed by the Lega party.
The unsuccessful drive of party leader Matteo Salvini to form a "government of national unity” with his own involvement has instead damaged his party. Nobody is currently interested in seeing a government crisis alongside the health crisis.
The relative equanimity with which the population has reacted to increasingly drastic measures that have turned everyday life upside down, indeed some of which they actually called for, is incredible in view of the country’s traditional scepticism of the State and its machinery. But there should be no illusions about the limits of this consent and the current social calm. As in every major crisis, the time dimension plays a significant role.
Fear of infection is still at front and centre and all restraints on personal freedom are overwhelmingly seen as acceptable, as it helps to reduce the risk to individuals. But over time, concerns about the future of the economy will come to the fore. The first indications of this have already been seen in recent days, particularly in the south of Italy, where scattered attempts to loot supermarkets were thwarted only by considerable police efforts.
Small and medium-sized enterprises play a critical role in the Italian economy. The order to cease all activities in areas such as tourism, fashion, design, construction and retail, with the sole exceptions of food and pharmaceuticals, as well as countless other sectors that are dominated by SMEs, has led to increasing numbers of insolvency and liquidity bottlenecks. What up until recently appeared to be purely a macro-economic matter is now starting to affect individual families.
There are still savings to fall back on and the possibility of borrowing within family circles, which are stronger in Italy, and the south of the country in particular, than in many other European countries. But these options dry up quickly. And then the question of how to pay for the daily groceries will start to take precedence and fears of becoming infected by the virus will start to take second place for many. If the State does not come through very quickly with at least some temporary assistance, anti-democratic movements, which could even be infiltrated by the Mafia, cannot be ruled out.
It should not be forgotten that the right-wing and centre-right parties Lega, Forza Italia and Fratelli d'Italia have the support of almost half of the adult population and would probably be able to form a government in the event of early elections. The relative silence of these political movements in recent weeks could rapidly turn into large-scale, highly vocal and probably successful opposition to the government and its measures, if the nascent economic crisis is not nipped firmly and permanently in the bud.
And Italy could only do this in a European context. The German, Dutch and other governments of the EU Member States which blocked a decision, at least for now, on a comprehensive, pan-European finance and credit programme at the European Council Summit of 26 March perhaps do not understand what exactly is at stake.
It is not just about how the devastating economic and financial fallout of the pandemic on individual countries can be mitigated. Nor is it simply about the concern that the absence of any common European crisis management could give new impetus to anti-European movements. In the case of Italy, the third-largest country of the EU and the third-largest economy of the Eurozone, it is about the survival of a liberal democracy based on law. It is about acting early enough to head off the danger that a future Salvini government, which cannot be ruled out, might be tempted to follow Orbán’s example and pass an enabling act that could be used to override the democratic institutions.
The Italian President, Sergio Matarella, who addressed the public in a televised speech – only his second ever – on 27 March, the day after the EU Summit, and Prime Minister Giuseppe Conte the day after, in an interview with the financial newspaper Sole 24 Ore, betrayed something of these concerns that go far beyond financial bottlenecks alone.
Matarella: “I hope everyone fully understands the seriousness of the threat faced by Europe, and that solidarity is called for more than only the values of the Union, but is in the general interest, before it is too late”. It is also in the general European interest that Italy does not drift off course and become an authoritarian nationalistic regime. Italy’s largest newspaper, “La Repubblica”, ran a full-width headline on 27 March: “Ugly Europe”. The article went on to report that “Conte is standing before a wall erected by Germany”.
There is a fault line running through Europe, this time not between East and West, but between North and South. Italy, along with France, Spain and now nine other Member States, have refused funding from the European Stability Mechanism (ESM), which Matarella describes as an “outdated scheme that bears no relation to reality” and whose lending is subject to comprehensive conditions that leave little room for political manoeuvre at national level, as was previously the case in Greece.
It is as if the Corona crisis is about the weak points of individual countries, rather than a global, unprecedented joint challenge. Conte, usually not a man of big words, warned that “the whole European project risks losing its raison d’être” in the interview referred to above, adding that Italy would keep moving forward no matter what - on its own, if necessary. Of course, he could afford to say that in view of the support now forthcoming from the ECB, after the initial hesitation of its President, Christine Lagarde.
The Italian healthcare system – in contrast to the US system, for instance – largely guarantees free medical care for all inhabitants. In view of the unprecedented and unpredictable numbers of new patients, not only are medical capacities being overwhelmed in the particularly hard-hit regions, but also – and in particular – their funding is collapsing. Other EU Member States will no doubt be facing similar problems in the very near future. With regard to this, the principal of intra-EU solidarity and sharing the burden between Member States should lead to common solutions.
In view of a crisis that affects everyone – but not all in the same way – it is easy to forget those who will be the very worst affected by the consequences: asylum seekers, refugees, migrant workers and people who had been working cash in hand before the crisis struck, with no contract, no protection, no union support and, in many cases, no residence permit.
They will not benefit from furlough payments, protection against dismissal, the social networks that are now being slowly relaxed. According to estimates of the Italian statistical office, 3.7 million people are working in this informal economy, or rather were doing until a couple of weeks ago, most of them in precisely those sectors of the economy that were first to be affected by the closures.
There is a family in my neighbourhood that has had a Ukrainian woman working for them for years, who is now no longer allowed into the house. When asked why they did not at least continue to pay their employee, the lady of the house, who works at a restaurant that will probably never reopen, replied that they could scarcely afford to feed themselves.
The government has today announced an “emergency income programme” of six billion euros for everybody who is at risk of falling into total poverty due to their unprotected or unprovable employment status. It is now a matter of paying out this support to those affected, as quickly and un-bureaucratically as possible.
In the meantime, and with extremely limited resources, it is the charities, the churches, neighbourhood groups and local initiatives that are caring for these refugees and migrant workers. Some of them have made calls in recent days for the pre-deportation holding centres to be opened. It is not as if anybody can be deported in any case.
Other organisations have called for a country-wide regularisation or “amnesty” for all third-country nationals present on Italian soil without a permit, which would admittedly not automatically solve the problem of people working without a contract, whose numbers include many foreigners who are legally present and Italians themselves. The only measure the government has taken for migrants to date is to automatically extend their residence permits until 15 June.
On the other hand, and also receiving little attention, there are more than 22,000 foreign nurses in Italian hospitals, around 5% of the profession. It is worth noting that according to a study by the OECD in 2019, the number of nurses in Italy in proportion to the population is extremely low at 5.5% per 1000 head of population (12.9% in Germany; 8.9% average across all OECD states). The study also showed that there is a direct correlation between mortality rates and nursing staff numbers.
Many tens of thousands more people with a migrant background are working in supermarkets, food shops, the haulage industry and delivery services for food and pharmaceutical products, small shops selling food and drink, many of which are run by migrants. It is no exaggeration to say that without them, there would be some serious gaps in the food supply chain to the population right now.
Admittedly, the right to seek asylum has not been removed, other than in Greece. But there are practically no new asylum seekers. The number of people arriving from North Africa by boat in March was just 197, about one tenth of each of the previous two months. There have been no arrivals at all since 20 March. NGO sea rescue vessels in the Mediterranean have ceased their activities. Nobody is leaving from Libya, where the war continues unheeded.
As is also the case elsewhere, the people are showing great resourcefulness in trying to adjust, to change their routines and the way they work. Smart working techniques and digitalisation in general were comparatively underdeveloped in Italy, but the country has caught up in just a few weeks. The regional governments have distributed hundreds of thousands of tablets to schoolchildren, to allow them to continue their education.
For many students and people still working, not a day goes by without a videoconference, E-learning, visits to virtual school and university classrooms. For many – but not all. Society has been divided into those who can carry on working more or less unhindered, albeit in new ways, and are getting paid for it, and the others, “hand workers” in the broadest sense of the term, who do not have the option to work from home.
The first group also includes those who shape and influence public opinion and are inclined to pay little attention to the existence of the second, and by far larger, group. However, it will be the latter group that will go looking for a “figurehead” if their livelihoods are threatened.
Today, the number of people who have died in Italy of or with the virus has risen to over 10,000. However, the tendency in recent days towards a slight, tentative reduction in numbers of new cases has also been confirmed once again, even – and especially – in Lombardi.