08.12.2011
Budget assault ups the ante
Almost all Italian parties have fallen in behind the attacks fronted by the new government of technocrats, reports Toby Abse
The budget unveiled by the government of Mario Monti on Sunday December 4 (before the reopening of the markets on the Monday morning) is a classic neoliberal deflationary package, resembling the Irish one announced the following day. This despite the rhetoric about growth and ‘social justice’ being spouted by Monti’s supporters in the Partito Democratico and the centre-left daily La Repubblica - whose front page editorial on December 5 claimed that its equitable nature was shown by the maintenance of indexation for the coming year for the very lowest pensions and some other utterly minor concessions.[1]
As many had forecast and the European Union/European Central Bank/International Monetary Fund troika had repeatedly demanded in their communications to Italian governments since the summer, there has been a massive attack on pensions. The old seniority pensions are being rapidly phased out, with some people being abruptly deprived of the rights they thought they had. For example, a worker who is 61 in 2012, having started work aged 26 and paid 35 years worth of contributions, instead of retiring next year will have to wait another four years, seven months if male and three years, six months if female. The whole system is now shifting to one based on defined contributions rather than defined benefits - the changes in the 1990s had meant that younger people were already subjected to this regime, which will now cover everybody by 2035.
Exactly as in the United Kingdom, the hypocritical partisans of such assaults on the working class claim this is ‘generational justice’ in the same manner as the vastly overpaid Guardian journalists Martin Kettle and Peter Kampfner, who do not have to worry about needing to pay winter fuel bills in their own old age. There seems to be no attempt to dress up the increasingly rapid equalisation of male and female pension ages in liberal feminist rhetoric, since women will have to work for longer too - the process has been accelerated by eight years, with a retirement age of 66 now being imposed in 2018. The absurd spectacle of welfare minister Elsa Fornero bursting into tears on prime-time television as she tried in vain to utter the word ‘sacrifices’ when talking about the pension cuts will give absolutely no consolation to the vast numbers being forced to work longer or receive less or both - even if it might arouse less anger than the self-satisfied smiles and smirks of our Nick Clegg and Danny Alexander.
It needs to be pointed out that, whilst many Italian welfare benefits were far below the EU average - creating a very partial and flawed welfare state, in which many caring responsibilities are in practice delegated to families, and particularly women within them - Italian pensions were traditionally some of the best in the EU and the trade unions had been able to recruit large numbers of pensioners to their ranks, giving them a bargaining power that our own National Pensioners Convention sadly lacks, despite the more militant stance recently taken under Dot Gibson’s leadership. Pensions had already been subjected to a series of earlier attacks in the 1992-96 period, as a result of the economic crisis associated with Italy’s exit from the European exchange rate mechanism.
Whilst the fall of Silvio Berlusconi’s first government in 1994 was in very large measure the product of a general strike on the pensions issue, it should not be forgotten that it was the government led by former banker Lamberto Dini - which relied on the consistent support of the former ‘official communists’ of the Partito Democratico della Sinistra (Democratic Party of the Left) - that actually carried out an only slightly watered-down version of the attack demanded by the capitalist class. In the light of the PDS’s dismal record on the pensions question in the 1990s, it is utterly predictable that its successor party, the PD (Democratic Party - no longer even ‘of the left’), will provide the votes in parliament to ensure that this second major assault is carried through.
Although the trade union confederations notorious for collaboration with the Berlusconi government, the CISL and UIL, have called a two-hour strike at the end of the working day on December 12 and the more leftwing CGIL, which had not been privy to discussions between the other two union federations, subsequently called its own four-hour strike for the same day, such a token protest will not be enough. The PD parliamentarians will undoubtedly protect themselves from the anger of much of their own base by turning any vote on the budget into a vote of confidence in the Monti government, which they can present as the lesser evil after all the years of Berlusconi’s dominance. There has been some suggestion that the incredibly low upper threshold of €936 a month on pensions that will still qualify for the indexation in line for inflation next year might be slightly amended in the light of PD pressure, but this is by no means certain. Although there may be a case for a threshold for those few high-level state bureaucrats who do indeed get platinum-plated pensions, it is a disgraceful that indexation itself has been made the exception rather than the rule.
‘Social justice’
Since the PD and La Repubblica are desperately trying to pass off a new version of stamp duty on shares and life insurance policies as a piccolo patrimoniale (mini-wealth tax), it should be stressed that there is no real wealth tax in this package, despite all the hopes (whether based on illusions or the product of a desire to deceive their own supporters) raised by the PD.
There is a rather feeble attempt to stop tax evasion by setting a €1,000 limit on transactions that can be carried out in cash, but in reality it will be the workers in large factories and all public sector workers, whether white-collar or blue-collar, who will as always bear most of the tax burden - the additional regional income tax will be raised from 0.9% to 1.23%. The new taxes on luxury cars and yachts are a very nominal concession to social justice, will not raise vast sums and do not seem to be linked to any serious attempt to resolve the riddle of how so many people who declare very low incomes to the tax inspectors can afford such extravagant hobbies.
It would be reasonable to suppose that the 2% increase in VAT in the second half of 2012 will have a much greater effect on workers and the poor, who are always the primary victims of this very regressive tax. The tax on petrol is also being increased and, although some might argue for it on ecological grounds or point out that those with the biggest cars might end up paying more, it will in practice hit ordinary people very hard at a time of recession. The only serious tax on property is the reintroduction, at a higher rate, of the tax on first homes abolished by the last Berlusconi government. Given that large numbers of Italians own their own houses or flats, this cannot be seen as an assault on the rich, even if it is a tax which will not hit the very poorest.
The extra burden on an average family arising from all the budget changes is €635, according to La Repubblica, although some consumers’ associations think €1,700 is a more realistic estimate.[2]
Whilst the current austerity package does not include an attack on article 18 of the 1970 workers’ statute protecting those in larger workplaces from dismissal ‘without just cause’, one does not have to be all that cynical to think that the new exemption of employers who take on women and young people from national insurance is a way of moving in this direction - part of the endless rhetoric about generational justice rests on the idea of levelling down: the division between a group of predominantly older, predominantly male, workers in larger workplaces protected by article 18 is said to be ‘unfair’ to the casualised, young and often female workforce that has grown in both absolute and relative terms in the last few decades. Even in better times of greater trade union power Italy always had a large ‘black economy’, in which many were employed on low wages for long hours in appalling working conditions and often found their capacity to resist weakened by links between rogue employers and organised crime - a phenomenon that is sadly not confined to Sicily or Naples.
This budget is clearly a disaster for workers, pensioners, the unemployed and the poor in general. It is exactly what we might have expected from a government dominated by Monti and figures such as Corrado Passera, who was previously head of Italy’s biggest bank, the Banca Intesa. The ideological and class-based agenda behind the cuts has been revealed by Italy’s confirmation on December 6 of a massive order for war planes. As the autonomist Popolo Viola movement and no doubt others on the radical left pointed out, if Italy can afford these, then surely she can afford to give her people decent pensions.
Tensions
The budget will doubtless give rise to tensions within the PD, especially amongst those closely linked to the CGIL, but it would be foolish to imagine that those who still cling to mildly social democratic beliefs within that party will mount a serious fight against a leadership that fully accepts the neoliberal agenda. It is worth noting that Antonio Di Pietro of the anti-corruption Italia dei Valori party (IdV) has come out against the budget and announced that his party will be voting against it. Given the way he was forced to retreat from his initial outright opposition to the Monti government by the majority of his own deputies, one can not be sure that this will happen, but it should be remembered that the IdV, alone amongst the parties represented in parliament, voted against Berlusconi’s last austerity package.
If Di Pietro manages to hold the line on this occasion, it will at least ensure that the Lega Nord does not have a monopoly over parliamentary opposition to Monti’s savage cuts - a demagogic position that enables the followers of Umberto Bossi, traditionally advocates of neoliberalism, to pose as the last defenders of the seniority pensions of the northern working class.
The position of Sinistra Ecologia Libertà (Left, Ecology, Freedom) remains ambiguous - Nichi Vendola’s lack of any parliamentary representation may perhaps let him off the hook, but he seems desperate to maintain an alliance with the PD at any price.[3] Unfortunately the December 3-4 congress of Rifondazione Comunista (PRC)[4] was rapidly followed by an interview with La Stampa in which general secretary Paolo Ferrero stressed the pressing need to work together with SEL,[5] rather than engaging with the militant workers in the FIOM and Cobas unions, and the students who engaged in massive nationwide demonstrations immediately following the formation of the Monti government.
Whilst at present 64% of Italians have faith in Monti, this is a drop from the 73% before the budget decree. At present the PD seems to be able to hold its own supporters in check, with 56% of its voters supporting the increase in the pension age, it is unlikely that this honeymoon - in large measure caused by people’s relief in seeing the back of Silvio Berlusconi - will last.[6]
Notes
1. ‘Ezio Mauro, il sentiero stretto’ La Repubblica editorial, December 5.
3. Whilst I know from direct personal contacts that this is not the position of the London SEL group, I have no idea how widespread the opposition to the Monti government is among the party members in Italy.
4. Paolo Ferrero’s majority faction had the support of about 80% of PRC delegates, while the Trotskyists of the Grantite Falce e Martello had about 13% and the ‘base’ - another left opposition to the leadership - 5%.
5. Vendola, unlike Di Pietro, and Naples IdV mayor Luigi De Magistris, did not attend the PRC congress, so this appeal to SEL came across as rather desperate supplication. This desire for reconciliation with the unrepentant splitters is linked to a position that sees the German Die Linke and the Spanish Izquierda Unida - rather than, say, the French Nouveau Parti Anticapitaliste or the Portuguese Left Bloc - as the model for the PRC to emulate.
6. Poll organised by the widely respected political scientist, Renato Mannheimer, for Corriere della Sera.