An Italian voter speaks out on the real reasons Italians voted for Grillo
A reader of Credit Writedowns recently wrote to us, detailing why Italians voted as they did in the recent general election. Her view speaks more to families’ and small business’ rejection of corporatism and corruption than austerity per se.
I was born in Nova Scotia, where I also grew up. My parents are Italian but immigrated to Canada in the 1960s. In 1987, when i was 17, my dad sold his business and we moved to Italy. So I have lived about half my life there in Canada and half here in Italy. I am neither really culturally Italian, nor Canadian; I am a mix of both worlds. This helps me be objective. I am also a fee only financial advisor (www.idapagnottella.it ). I was one of the first to do this profession in Italy. And I’m often interviewed by “the Sole24Ore” for investing advice. Thanks to my profession, I also talk to many clients about the situation and understand why so many voted for Grillo.
Italians are not very objective. During this crisis, I have found that they tend to blame everyone but themselves. I believe Italy is bankrupt because democracy is not deep enough. Italy had been ruled by kings, invaders, and dictators until it lost the second world war and chose to become a democratic republic. If I could generalize, I would say the main problem is that Italians are very individualistic; in the past they didn’t worry about the long term effects of corruption and inefficiency on society. Instead, they tend to worry about their own family and not about general Italian society.
I believe there is a great cultural difference between northern European countries like Sweden and Norway and Italy. Once I read a study which concluded that in cold countries like Canada, the public system must be efficient and fair otherwise people will just choose to move to warmer places. In places like Italy the quality of life is so good (food, climate, culture, beaches etc) that people tolerate an inefficient public system, corruption, etc.
So let’s get to today.
As long as the economy was moving forward, I never really noticed the masses getting angry with Berlusconi. Keep in mind that he has been in power for almost 20 years, has done almost zero reforms, and has increased taxes during this period, exactly the opposite of what he promised 20 years ago. He has been too busy protecting himself and his interests during this period. That is not just my opinion; journalists like Marco Travaglio have demonstrated against and written about this fact.
So in 2011, the recession deepens, spreads widen, and Italy starts to feel the pinch. Only then did Italian start to reject Berlusconi. (I mean their majority; there has always been a minority of 40% like me that was totally against him for years). Keep in mind that the opposition party PD has been complicit in Berlusconi’s accumulation of power. I don’t know the dates, but the left never really tried to solve the conflict of interest that Berlusconi has (He controls all the main TV stations and many media groups like Mondadori)
So with spreads widening so badly and with the Bunga Bunga scandals exploding, we got rid of Berlusconi. In November 2011, the government fell and Monti was appointed to form a new government. It was not the most democratic moment, but many many entrepreneurs wanted to celebrate. We thought: “finally someone with nothing to lose, who can face up to the emergency and do the reforms that Berlusconi has avoided.”
So Monti arrived and did a pension reform right away. I was enthusiastic and finally hopeful for our future. After that, he just put taxes and more taxes onto people and businesses. For example, the IMU tax on real estate property was introduced. Everyone paid without protests, convinced that we would be rewarded with some strong unpopular reforms. We were wrong.
In Italy we have many protected economic groups. For example, to drive a taxi here, you must get a government license. Since there are not enough licenses available, taking a taxi in Milan for example is super expensive – costs much more than in New York or London or Paris. Also, when I arrive at the Linate airport in Milan, there are always abusive non-authorized taxis (men with a normal car) who offer to take you downtown for a lower price, which means that demand is higher than the supply from official taxi drivers. Monti decided to liberalize the market, abolishing these government permits. The taxi drivers complained, so he didn’t do it. The same thing applies to the pharmacies and to notaries (government lawyers authorized to witness certain documents which normal lawyers can’t). In all these sectors, demand is higher than supply. And so we pay double for pharmaceutical and notary services compared to other European countries. To open a pharmacy, you must get a government license. The government does not give out many licences, so this keeps the price to buy existing pharmacies sky high. Everyone knows that pharmacists and notaries make tons of money for this reason: no market system.
Monti didn’t not even touch this system. We know that you cannot change everything in one year, but he didn’t change anything. So most people didn’t like paying IMU, but they accepted it because working people, professionals, etc, hoped that in exchange for new taxes, we would have less corruption, or at least some reforms. Monti really wasted the chance to improve his country, because he didn’t even try. I have never seen him go on TV to explain why it is better to have reforms toward a more market-based system. All he promoted was taxes in most people’s view. The worst thing was that after saying for a year that he was not interested in politics, he actually candidated himself! During the campaign, he said he would lower IMU (after saying last year that IMU was necessary to not default).
People who vote Berlusconi seem to accept the fact that he always lies and contradicts himself. But people like myself who were fans of Monti a year ago, do not tolerate incoherence or contradictions. I would like to give him a slap in the face. He raised taxes on firms during a really bad crisis (IMU was applied to company factories too). Consider that in Italy it is really hard to cash in your credits, because of the slow justice system, he did nothing to solve these real problems.
So I don’t know anyone who voted for Monti – probably taxi drivers and pharmacists!
Then, this spring another scandal came out surrounding Monte Paschi, which is totally bankrupt, as Grillo has been saying for years. Grillo is not a comedian. He does political satire, and during his shows he talks about scandals regarding companies in Italy which are controlled by the local political class, like Monte Paschi Bank. It turns out that Bersani’s party has a big responsibility in the Monte Paschi Scandal. And instead of nationalizing the bank, they gave them another loan (which will never be repaid).
With this scandal people started to realize that the right (Berlusconi’s party) and the Left (Bersani’s PD) are equally corrupt and are in politics to do favours for their friends. Bersani’s party, though, has some new people in it. In particular, the mayor of Florence, Renzi, was a breath of fresh air. If he had been candidated, the PD would have won and Grillo would have gotten fewer votes. Since the older politicians in the PD don’t want to give up their personal power, they cut Renzi out. And thanks to this decision, Grillo won.
People voted for Grillo because they are sending a message to Bersani and Berlusconi: “go home” They have ruined the country in the last 20 years. If Bersani quits the party and Renzi becomes leader, he will win the next elections. Many people who voted for Grillo don’t even like him that much. But these people could not give their vote to Monti (no guts) Berlusconi (criminal) or Bersani (no guts and corrupt party).
I see that the US media keeps talking about Grillo’s being a comedian. He does satire and is an expert on economics and history. I am particularly proud that for the first time in 20 years we got rid of Berlusconi, a sly, shrewd businessman. It is the first time that I have seen a democratic revolution in Italy. If spreads widen and we don’t form a government, it will be a good thing, because it is time for us to understand that you can’t keep kicking the can down the road, Bersani’s and Berlusconi’s specialty.