So what about that Grand Coalition for Italy?

 

Almost a year ago, I made a suggestion in my FT column, widely derided at the time, that Italy - rather than Germany - should be run by a grand coalition. The German coalition marks the lowest common denominator in terms of economic reforms. But in Italy, a Grand Coalition of the centrist parties is the only hope for reforms - or as Geoff Andrews recently argued in an FT Oped: the centre can be a truly radical place to be in Italian politics.
The centre-right proved its inability to reform when it was in power. The centre-left is proving just as incapable. At the recent coalition summit at the royal palace of Caserta near Naples, the coalition agreed to postpone reforms, such as an increase of the pensionable age, or much needed reforms to the public sector. Prodi told the largely gullible Italian press that after all his government had five years to implement its reform programme, and they seemed to believe him.
Even Prodi supporters such the Italian economist Piercarlo Padoan believe this is a bad strategy (print edition of the Corriere della Sierra, 15.1.06). Governments either reform at the beginning of their term or not at all, he said. This looks like a case of not at all.

So what now? We are basically back to where we were a year ago, except that there is no imminent election that promises change. The ailing Silvio Berlusconi is still in charge of Forza Italy, but not forever. He will not fight another election. The Christian Democrats, his erstwhile coalition partner, are looking for a realignment around the centre. The head of the Democrats of the Left, Piero Fassino, and his party colleague Pierlugi Bersani, industry minister in Prodi's rainbow coalition, are getting increasingly frustrated about the slow pace of reforms. If Prodi's coalition ever breaks up, I bet it will not be the Communists, but impatient reformers who will call it a day.

It is impossible to place any odds on such an event. But it is fair to say that there is a cross party majority in Italian politics in favour of reform. This begs the question: can this majority assert itself? This is going to be most important question of Italian politics in our age.

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