Just days before, the Italian premier was touting IMF forecasts predicting Italian economic growth superior to that of France and Germany.
Then came the corrective: an OECD forecast that Italy’s GDP will decline from 3.8% in 2022, to 1.2% in 2023 and to 1% in 2024.
While inflation generally declines, both in the larger European economies and in the US, the OECD reports that it is still grinding down real incomes in Italy.
One of the selling points of Meloni’s post-fascism is that it’s supposed to energise the economy by sweeping away annoying impediments to commerce like trade unions and gay families.
Sadly, for her Fratelli d’Italia-led government, the problems run deeper (and broader) than simply coercing an insufficiently productive workforce to greater efforts.
Italy’s labour pool itself is getting progressively smaller and older. Since 2014, the population has declined by more than 1.3 million people, a number nearly equal to that of Milano.
This creates several problems, not the least of which is that authoritarianism is based on improving the country’s economic position and excluding foreigners.
The result is a two-way pull on the economy.
Market growth, at least of the kind envisaged by Giorgia Meloni, requires a reserve army of labour such that employers can keep wage costs down.
Though Meloni was heavily criticised from the right for admitting several hundred foreign guest workers this year to address labour shortages, few understood their intended use.
The Italian premier hadn’t softened on immigration, as the European press proclaimed, as much found a way to kill two birds with one stone.
Battling an opposition push to approve a minimum wage of 9 euros an hour – Italy is one of the only countries in Europe that lacks one – more migrants means that if Meloni has to buckle, she could bargain for 5.
It’s a cynical strategy that’s in keeping with her xenophobic politics. Immigrants can fill gaps in the workforce, but the exchange is that they will never be allowed to make a living wage.
Neither, of course, will the working-class Italians who would benefit from the measure. But that’s the point. This is about finding the best deal for companies, not labour, white or black.
The Italian government’s most recent attempt to deal with this problem was to announce that the income support measure, the UBI-like Reddito di Cittadinanza (Citizenship Income) introduced in 2019, would be cut.
An object of controversy since its introduction, Meloni’s mentor and coalition partner, the late Silvio Berlusconi, made it a priority that her government eliminate the welfare measure, primarily benefitting the chronically underemployed South.
The fact that the government chose to make this announcement to some 160,000 benefit recipients via text message this week only increased the indignity. This was tantamount to throwing a lit stick of dynamite at Italy’s entire working class.
You don’t have to be a recipient of the benefit to take offence at what the notification symbolised. If Giorgia Meloni was to have a fall from grace – many elderly and working-class Italians voted for her in the 2022 election – this was it.
From the government’s perspective, ending the Reddito di Cittadinanza was an obvious measure.
While some of the people receiving it might have legitimately been among George Bernard Shaw’s “deserving poor”, from Giorgia Meloni’s resolutely petit bourgeois perspective, people receiving income support are parasites and spongers.
Let’s not forget the laissez-faire psychology at work here. Compulsory reentry into the labour market will ease the labour market squeeze and make them better citizens in the bargain. It’s a win-win from a neoliberal perspective.
Of course, the Italian government’s position takes no account of the fact, demonstrable from a mass of research and evident to anyone who took the time to look into the question seriously, that the likelihood of someone reentering the workforce declines dramatically with age.
Employers dislike hiring older people. Why invest time and money training someone if their working life will only likely be a few years? Better to look for someone young or a minority, both for the above-mentioned reason and because they can generally be paid less.
Again, one of the premises of Meloni’s rise to power was that she could get the Italian economy into a more serviceable state.
While Italy’s debt-to-GDP ratio has declined over the last couple of years, it is still over 140%. Italy has steadfastly refused to move forward on ratification of the reform of the European bailout fund.
The reasoning around this is of byzantine complexity.
The simplest explanation for why the government has delayed any move to update the European Stability Mechanism (ESM) is the hope that the government’s National Recovery and Resilience Plan (PNRR) will raise enough capital to forestall the need for a guided bailout from Brussels.
In most discussions of these issues is the trauma of the Greek bailout. Right-wing parties in Italy mostly oppose the proposed reforms of the ESM, wishing to avoid the prospect of a loss of sovereign control of their economy.
However, the available evidence points to one slowing down rather than speeding up, a condition likely to make the Italian sovereign debt load increasingly difficult to bear.
In another era, the Italian state might have made use of meaningful sovereignty by devaluing its currency. But the time when that course of action could be undertaken has long passed.
Italy now participates in the European currency system, and the message from the European Central Bank is to control inflation and devil take the hindmost.
Given that there is no meaningful prospect along these lines, the only reasonable possibility for improvement is an adjustment under the auspices of the EU.
Cuts to income support notwithstanding, the country’s demographic situation is such that achieving sustained and sustainable economic growth will be increasingly difficult.
The tragedy of Giorgia Meloni’s government is that its success is predicated on the return of conditions in Italy which will never exist again.
This situation could be improved by embracing the large number of people from elsewhere who want to look for a better life in Italy.
However, the governing coalition’s cultural and racial obsessions mean this avenue is closed. What remains is the hope for a return of some sort of natalist utopia.
The fundamental problem with this is that the numbers don’t add up.
While the long-term threat that automation will make large swathes of the population surplus to the requirements of production, that is a prospect for a remote future which will not help Italy’s immediate shortage of workers and the concomitant payments into its pension system.
The only thing that remains is the authoritarian project of compelling the available workers to do more for less.
Giorgia Meloni is involving Italy in an economic dynamic in which the suffering caused seems wholly unlikely to bring about the promised (or needed) economic results.
The economics of her government are not just painful. They’re pointless.
Photograph courtesy of Joel Schalit. All rights reserved.
