Italy in economic doldrums ahead of polls


Heading into legislative elections on Sunday, ordinary Italians are despairing not only over the state of the economy but the political class in general, according to polls and analysts.

More than half of Italians interviewed for a Demos-Coop survey at the end of March -- 51.4 per cent, way up from 36 per cent a year ago -- felt that their personal economic situation had worsened.

"The feeling of decline is a shared feeling that limits the outlook on the future, darkens the horizon (and) influences attitudes towards politics and institutions," wrote sociologist Ilvo Diamanti, commenting on the survey in the daily La Repubblica newspaper.

News last week that Milan had won the competition to host the Expo 2015 world fair provided only a brief respite from a generally gloomy outlook.

Italy is still grappling with the fallout from a waste disposal crisis in the Naples region over the past several months, when international news cameras relayed images of hundreds of thousands of tonnes of uncollected rubbish.

The underlying problems that provoked the crisis -- alleged corruption among local politicians and the involvement of the local mafia, the Camorra -- remain unresolved.

Nor has the battle to save the national airline Alitalia from bankruptcy done much for Italy's international reputation.

Alitalia's fate has looked increasingly desperate since talks broke down last week between takeover suitors Air France-KLM and the Italian airline's unions.

The airline was forced last month cut some two-thirds of its flights in and out of Milan's Malpensa airport.

In the short term, the government to be elected next week will face a dreary economic outlook: official figures show that growth has slowed to 0.6 per cent of gross domestic product (GDP) against 1.5 per cent last year.

"Weak growth is due to lack of infrastructure, massive dependence on energy, an unwieldy tax system and public spending that is high and inefficient," said Alberto Quadrio Curzio, an economics lecturer at the Catholic University of Milan.

To kick-start economic growth, "a bipartisan agreement will be necessary after the elections on these essential points," Quadrio Curzio, who is also an editorial writer for the business daily Il Sole 24 Ore, told AFP.

The economic platforms of the two main political groupings, Walter Veltroni's centre-left Democratic Party and Silvio Berlusconi's conservative People of Freedom (PDL), are not dissimilar, he said.

Both call for tax and public spending cuts and both want more infrastructure investment, Quadrio Curzio said.

Although the public accounts improved under the centre-left government of Romano Prodi, the incoming team will have scant room for manouevre, analysts say.

The public deficit is forecast to be 2.4 per cent of GDP this year, while debt is projected to reach 103 per cent of GDP.

The new government will also have to deal with the ever-widening wealth gap between the industrial north and the agrarian south of Italy.

The chronic disparity has been exacerbated by a new brain drain of qualified workers from the south to the north, Quadrio Curzio said.

Economic problems have contributed to a general sense of declining status coupled with a growing mistrust of Italy's public institutions.

A study in March by the Institute for Studies and Economic Analyses showed that public confidence had fallen to its lowest level in four years.

Gian Maria Fara, president of the Institute of Political, Economic and Social Studies (EURISPE), summed up the malaise by saying Italian society and the political class resembled "a separated couple living in the same house." (AFP)