Rumors of Italy's demise are greatly exaggerated
North Jersey Record,
December 28, 2016
Despite former Prime Minister Matteo Renzi's stinging defeat in the constitutional referendum of Dec. 4, the Italian republic lives. Paolo Gentiloni, the erstwhile foreign minister, was appointed (interim) premier and won the backing of both chambers of Parliament.
That's good news for the United States, the European Union and the Western world – especially in the crazy-quilt age of Donald Trump.
Though the raucous populism of the Five Star Movement may have roiled the political waters and upset the financial markets, Italy's climb toward renewed economic growth should continue – albeit haltingly. After years of stagnation in the wake of the Great Recession of 2008, the Italian economy is expected to grow by 0.9 percent in 2017 and 1.0 percent in 2018. Unemployment is predicted to decrease to 11.3 percent next year.
As Prime Minister Gentiloni underscored: "The priority of priorities is 'work, work, work.'"
As the Eurozone's third-largest economy, Italy remains essential to the viability of the Western community. This is particularly true in light of Britain's unexpected exit from the European Union, Germany's obstinate insistence on austerity policies, and the specter of a President Marine Le Pen on the Champs-Élysées.
Should Matteo Salvini's xenophobic Northern League gain traction and influence Italy's national elections in 2017 or 2018 – helping to orchestrate an Italian departure from the euro – the result could be devastating.
"The German banking system would be in danger of collapsing," said Wolfgang Münchau of The Financial Times; France might well withdraw from the European Union; the euro would cease being the Continent's common currency; and a worldwide recession would ensue.
Such an upheaval would inevitably spread to our shores. Are you listening, President-elect Trump?
Italy has been the enduring linchpin of the West – from the Pax Romana to the Renaissance to the Treaty of Rome. According to economist Anatole Kaletsky, "Italy is resuming its historic role as a source of Europe's best ideas and leadership in politics, and also, most surprisingly, in economics."
In addition to settling the nettlesome banking crisis involving Monte dei Paschi di Siena – the world's oldest bank – Prime Minister Gentiloni's first order of business will be to jump-start job creation and accelerate economic growth by promoting Keynesian infrastructure revitalization projects to boost overall demand.
Having already restructured labor policies, banking and the civil justice system, Italy has firmly established its reformist bona fides. And this has "allowed Rome to regain its voice in Brussels," according to Gentiloni. Though best known as a soft-spoken diplomat, Gentiloni carries a big stick: Italy is a bulwark of NATO in the Mediterranean and an international peacekeeper par excellence. Moreover, Italy will host the 43rd G-7 meeting in Taormina, Sicily, in May 2017.
Rather than tweeting bombastic bromides and consorting with the authoritarian likes of Russia's Vladimir Putin and Turkey's Recep Tayyip Erdogan, President Trump would be wise to heed the counsel of a leader steeped in the geopolitical issues of the day – from Syria and Libya to China and Russia. Moreover, the Italian premier actually takes his intelligence briefings seriously.
When two Italian police officers killed Anis Amri – the reputed Berlin Christmas market terrorist – in a shootout near Milan, all of Europe breathed a sigh of relief. Where Germany stumbled, Italy succeeded.
It is our great good fortune that one of America's staunchest allies is also a pillar of the global community.
Indeed, as George Steiner once remarked: "For better or worse, Italy has, under a legion of governments actually run by a handful of exceedingly adroit and cynical politicians, been one of the stablest societies in the West. And, it may be, the most humane."
Rosario A. Iaconis
Senior Analyst with the Italic Institute of America