Politics of Austerity in Italy and Greece

Italy formed a rare unity government last weekend, which was confirmed by both houses of Parliament this week. Today in an unsigned editorial, "Italy's New Government," the New York Times weighs in skeptically about Prime Minister Enrico Letta's possibility for success:

Given the muddled election results in February and the unwillingness of the third-place finisher, Beppe Grillo’s Five Star Movement, to make any coalition deals, Mr. Letta has assembled the only possible majority. But it may not hold together long enough to enact the ambitious 18-month program Mr. Letta proposed this week. 

That agenda itself pulls in different, and often conflicting, directions. It calls for tax relief and an easing of austerity, but it also pledges continued commitment to severe European Union budget targets. It calls for economic reforms, which will be difficult to carry out in a time of recession and high unemployment, especially since Mr. Letta’s governing coalition depends on the votes of political parties that have blocked such reforms in the past. And it calls for electoral and political changes, but it must depend on the beneficiaries of the old, unreformed system to make them law. To pull Italy out of its economic and political crisis, Mr. Letta will have to change minds in Rome as well as Berlin.

In Greece, which has the highest unemployment in the EU at 27%, there was a general strike on May Day. Niki Kitsantonis and Alan Cowell report today in "Greeks Strike Against Austerity as World Observes Labor Day" that

The strike came just a few days after officials in the euro zone approved the release of 2.8 billion euros, or $3.7 billion, in rescue financing for Greece after Parliament ratified a new raft of economic reforms, including a politically contentious decision to lay off 15,000 civil servants by the end of next year. 

The financing had been due in March but was delayed after talks between the government and officials of Greece’s troika of foreign lenders — the European Commission, the European Central Bank and the International Monetary Fund — broke down over the troika’s demands for the civil service cuts. 

The country’s governing coalition, which has come under strain as it pushes its painful austerity agenda, must now enforce agreed-upon measures, laying off 2,000 civil servants by the end of June and pushing forward a stalled project to privatize state assets. It faces strong opposition by its main political rival, the leftist party Syriza, which wants Greece to renege on its loan agreement with the troika and is neck and neck in opinion polls with the conservative New Democracy, the head of the shaky three-party coalition. 

The European Union and the International Monetary Fund have extended to Greece two foreign bailouts worth $317 billion over the past three years, meting out the aid in installments in exchange for austerity measures and overhauls.

Greece is further along in its destructive obeisance to austerity than Italy but the two countries have much in common: unity governments clinging for survival to the wreckage of a discredited status quo while a dissenting political formation -- Syriza in Greece; Five Star Movement in Italy -- gathers force. The Times Editorial Board's skepticism is well placed.

Massive System Failure

The political system in this country is failing. The GOP is fracturing along a Tea Party Bircher versus Rovian establishment fault. At the end of last month longtime political commentator Thomas Edsall, wrote a story, "The Republican Autopsy Report," that appeared on the New York Times "Opinionator" blog. In it he discusses a 97-page post-2012 election assessment commissioned by RNC chairman Reince Preibus:

The G.O.P. report is an extraordinary public acknowledgment of internal discord and vulnerability, which has intensified the battle between the deeply committed conservative wing and the more pragmatic, pro-business wing for control of the Republican Party. With just a few exceptions, it does not mince words. 

At the federal level, it says, the party is “marginalizing itself,” and, in the absence of major change, “it will be increasingly difficult for Republicans to win a presidential election in the near future.” Young voters are “rolling their eyes at what the party represents.” Voters’ belief that “the G.O.P. does not care about them is doing great harm.” Formerly loyal voters gathered in focus groups describe Republicans as “ ‘scary,’ ‘narrow-minded’ and ‘out of touch’ and that we were a party of ‘stuffy old men.’ ”

What's going on is the GOP establishment, which made a Faustian bargain with the Tea Party to combat the Obama tidal wave following the 2008 election, is now, with Karl Rove still the #1 strategist, attempting to eradicate the Bircher jihadists:

More broadly, the alliance between Rove and the R.N.C. does substantiate the view that establishment forces are driving the reform movement within the Republican Party, an establishment that includes much of corporate America, including the Chamber of Commerce, the Bush family and its allies, and the more moderate, traditionalist donor community. 

Conservative analysts like Timothy P. Carney of the Washington Examiner and Ramesh Ponnuru of the National Review quickly spotted the establishment tilt in the Priebus report. Carney wrote:

Republican elites tend to favor mass immigration and be ambivalent or supportive of legal abortion and gay marriage. So, shouldn’t we take it with a grain of salt when the Republican leadership puts out a document saying that the G.O.P. should change only its rhetoric on economic issues, but change its substance on social issues?

Similarly, Ponnuru wrote that the recommendations “come naturally to Republican elites” who “are more likely to favor same-sex marriage and comprehensive immigration reform on principle.” The report reflects “elite conventional wisdom perfectly, just perfectly.” 

In January, I pointed out that “If the conservative movement continues on its downward trajectory, the American business community, which has the most to lose from Republican failure, will be the key force arguing for moderation.” 

That moment has come. The Priebus report and Rove’s Conservative Victory Project together mark a significant escalation in the battle between the center and the right over the soul of the Republican Party. What has yet to be determined is whether they are fighting over a patient who can be quickly resuscitated or a patient with a chronic but not fatal illness — or a corpse. 

The very bluntness of the Growth and Opportunity report reflects the seriousness of the moment the Republican Party faces: increasing difficulty holding on to its House majority; weakening prospects of regaining control of the Senate; and the threat of unending Democratic control of the White House.

For the Democrats it appears that it is TINA ("There Is No Alternative") to Obamaism, which after much hope and longing on the part of a progressive majority in this country seems to be nothing more than Clintonism. Obama's failure to get a gun control measure out of the Senate along with his proposal to chop Social Security benefits presage an impotence -- a mere six months after his landslide reelection -- that can only grow more pronounced. The AFL-CIO is rapidly shrinking and looking to overhaul its organizing model. How many times have we heard that before? So there is no hope there. Occupy Wall Street, barring another economic meltdown, is unlikely to recapture its former glory.

I was looking to Cyprus to show us a way forward by voluntarily rejecting the euro. We need courage, experimentation. But in the last couple of weeks there is no indication that this will happen. So for now it appears that our best bet is Beppe Grillo's Five Star Movement. Rachel Donadio has an excellent story, "President of Italy Nominates Center-Left Official as Premier," in today's paper about the latest political developments in Italy. Luigi Bersani resigned the leadership of the Democratic Party after two months of unsuccessfully attempting to form a government and getting his presidential candidates to succeed President Giorgio Napolitano. With no resolution on the horizon, the 87-year-old Napolitano agreed to serve another term and was reelected. Now, as Donadio reports,

After months of political paralysis capped by a week of turmoil, President Giorgio Napolitano on Wednesday named Enrico Letta, a high-ranking official in the center-left Democratic Party, to form a broad coalition government to try to steer Italy out of political chaos and its worst recession since World War II. 

And former Prime Minister Silvio Berlusconi, the great survivor of Italian politics, emerged as a kingmaker by default, having outlasted most of his adversaries. 

“It’s undeniable that this is a victory for Berlusconi,” said Giovanni Orsina, the deputy director of the School of Government at Luiss Guido Carli University in Rome. “He got what he asked for, from Napolitano’s re-election to a political government with broad, bipartisan support.”

Like the current Greek government, a three-party coalition in which historical enemies on the left and right have joined together out of fear of extinction and a lack of viable alternatives, Mr. Letta is potentially the last gasp of a political cycle that in Italy began in the early 1990s with the collapse of the postwar political order and the rise of Mr. Berlusconi.

The party system is collapsing. Television is said to have led to the erosion of political organization in the United States. Now TV is being replaced by the Internet. Life is migrating online. Is this good or bad? Judging from the stasis of the status quo one can only conclude that so far it's not good. We might be at the point where there is so much information available that we are paralyzed -- the "dream machine" that Jean-Francois Lyotard predicted in his seminal La Condition postmoderne: Rapport sur le savoir (The Postmodern Condition: A Report on Knowledge) (1979).