MILAN: Silvio Berlusconi and his new government are quietly settling into office, yet his victory still seems to some people like a revolution. But will Italy really look very different after Berlusconi leaves power? The easy answer is to shrug and say: “not much.” Such complacent cynicism is frivolous. In the postwar period, Italy has had 58 governments, all either coalition or minority governments, which exerted little influence over domestic or international events. Mr. Berlusconi’s brief stint in office in 1994 was no exception to this pattern, hampered as he was by an unruly coalition partner (the Northern League), his own judicial troubles, as well as by a lack of legitimacy because many Italians believed that the “conflict of interest” between his vast wealth and his political power compromised his decisions and authority. This time around things are profoundly different. Mr. Berlusconi was elected on a platform of cutting taxes, by a large constituency that had lacked a political voice for years. His government is likely to last for a full parliamentary term. To understand the relevance of these points, consider two important differences: between Italy now and in 1994, and between Italy and other countries in Europe. The differences between Italy in 2001 and in 1994 are straightforward. Unlike in 1994, Premier Berlusconi’s majority has a comfortable margin in both houses of parliament. The support of the Northern League is not essential to his government’s survival; his other coalition partners are loyal and reliable. Moreover, Italy is now a euro member. Its fiscal consolidation is complete. The government budget remains a binding constraint on policy. Italy is no longer on the brink of financial disaster; an overhaul of government finances is unnecessary. Italians welcome the discipline and stability imposed by the Maastricht Treaty. Less easy to see is the fact that Italy differs so much from continental Europe. Unlike the French or Germans, many Italians distrust big government. Italian public opinion seems more favorably inclined towards the values of the market, international competition and free enterprise when compared to the rest of Europe. The instinctive suspicion of Italians towards government is rooted in history, but there are economic reasons too. Because tax evasion is more widespread in Italy than elsewhere, the tax burden is concentrated on a smaller group of taxpayers who face very high rates. At the same time, compared to other European countries, the quality of public services in Italy is often disappointing, and the welfare state tends to redistribute towards powerful political groups rather than in a universalistic and “fair” manner. In a recent poll investigating the opinions of citizens in France, Germany, Spain and Italy about their welfare states (cf.
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The Year Ahead 2018
The world’s leading thinkers and policymakers examine what’s come apart in the past year, and anticipate what will define the year ahead.