Monti, and the root of the crisis in Italy

Sunday’s (08/01/2012) ‘Che Tempo Che fa’ featured Italy’s technocrat Prime Minister Mario Monti. The popular talk show on Rai 3, hosted by Fabio Fazio has been running since 2003. Fazio is extremely polite with his guests and this was surely no exception.

I will not go into the  detail of Monti’s explanation of how he’s sure the Euro zone is not in an unrecoverable crisis and how Italy’s economy can be on the growth path soon. Fabio Fazio seemed convinced, and one hopes that Angela Merkel will be equally happy with Monti’s explanations when he meets her today.

So, however much I enjoyed listening to Monti, the interview mostly left me thinking about the root of the political crisis that led to Italy needing this unusual form of government to bring back economic stability. Here’s how the interview starts:

Fazio: “La sua manovra ha messo in sicurezza l’Italia? Cio’e` siamo tranquilli o prevedibilmente ce ne sarà un’altra, secondo lei?”

Monti: “Spero che siamo tranquilli. La tranquillita` nelle cose l’abbiamo raggiunta. La operazione di consolidamento dei conti dello stato Italiano che il Governo ha proposto, il parlamento ha approvato e gl’Italiani hanno molto responsabilmente accettato  e` una operazione molto grossa anche in base agli standards Europei, e mette certamente in sicurezza i conti pubblici Italiani.”

Continue watching Part 2,  Part 3

In essence, Monti is sure that his government’s intervention has saved Italy’s public finances. If we go by his word, it’s certainly an achievement for having been two months in Government. And yet, here are some considerations based on the interview. For Italian speakers, genuine excerpts are provided at the end of this post.

1. Speaking about liberalisation of the economic forces and drawing a parallel with what had happened recently in Italian politics, Monti says that “we have seen in the last months of political life that the balanced disarmament of political forces, which in the past experienced harsh disagreements between them, allowed decisions to be taken calmly and in a mutually acceptable way“. So was it all school-playground-style pique prohibiting any sort of agreement being reached before?

2. Monti also calls his, “un governo strano” (an unusual government) and explains that this is because it has no alliances with any of the unions or professional bodies that would normally be able to exchange their support for politicians into protectionist actions (or inactions) from same.

3. Speaking about the economic developments along the years, Monti explained how governments in Italy since the 60s basically followed what happened across the globe. Whilst during the 60s to the 80s the market economy wasn’t popular, this was then completely reversed in the Reagan/Thatcherite period where the market was “deified”. Monti argued that the nationalisation efforts (protectionist strategies) of the 60s, 70s and 80s caused a great deal of harm and these still have significant bearing on Italy’s public debt. Later, the deification of the market economy  was even more detrimental in the sense that the financial world was allowed too much liberty leading to the current  financial crisis.

4. Monti explained that the public has too bad an opinion of the political class, and that they in general deserve more respect. Significantly however, he said that this transitionary period should be used by all citizens to ask “We that are always ready to blame politicians; I as a single citizen; we as a group of citizens, are we doing our duty for Italy to grow as we would like it to?”

ITALIAN EXCERPTS FROM THE INTERVIEW:

Point 1

Monti: “nella vita politica, negli ultimi mesi abbiamo visto che un certo disarmo bilanciato tra forze politiche che in passato si confrontavano molto aspramente ha deciso di prendere decisioni in modo pacato e condiviso”

Point 2

Monti: “…mentre tradizionalmente una parte politica si prende cura di proteggere una certa categoria, un’altra parte politica di protegge un’altra categoria, un governo strano, come quello che ho l’onore di presidiere, non fa parte di nessuno di queste geometrie politiche e quindi puo` permettersi di presentare un disegno all’paese, sperando di essere compreso, e di chiamare un po’ tutti di disarmare privilegi…”

Point 3

Monti: “ci sono dei cicli: abbiamo avuto un epoca, e bisogna ricordare i diversi cicli perche` se no, si fanno delle analisi un puo` limitate e si danno delle colpe un po’ ingiustamente distribuite. Abbiamo avuto un’periodo durante gl’anni ’60, ’70, ’80 in cui l’economia di mercato veniva vista negativamente, gli stati aumentavono la loro presa sull’economia, c’erano molti nazzionalizzazioni, e i mercati venivano pochi lasciati giochare (dare il loro contributo allo sviluppo economico). L’Italia in quei anni sotto una cultura molto dirigista ha commesso una grande quantita` di errori che pesano ancora oggi sul nostro debito pubblico. Puoi e venuta una fase nell’mondo e forse anche in Italia, con un puo` di ritardo, che ha reagito in eccesso e il pendolo si e` spostato forse anche un puo` troppo nell’altra direzzione. E` la fase cosi` detto di Reagan, di Thatcher, che` ha visto il mercato quasi come una divinita`.  Nelle cose economiche non si puo` essere manichei, non c’e` il bene assoluto, il male assoluto, e` una questione di equilibri. Allora nella fase Reagan/Tatcher, soprattutto verso la sua fase finale, la finanza e` diventata quasi un’entita` a se stante, soprattutto negli Stati Uniti, molto meno in Europa, chi gestiva la finanza e` stato talmente riverito, anche dal potere politico, che non si e` pensato a regole abbastanza stringenti sulla finanza, e quando queste regole c’erano non venivano fatte rispettare. Ecco, e` soprattutto in quella fase, che si e` prolungata fino al 2007 infondo, che e` nata la grande crisi finanziaria scoppiata negli Stati Uniti.”

Point 4

Monti: “io sento un po’ di pena per i politici che sono così trattati male dall’opinione pubblica. Si e` creato un tale divario tra opinione pubblica e classe politica, che la mia ambizione, in questo breve periodo, e` duplice: certamente tirare fuori l’Italia da un’emergenza pericolosissima dal punto di vista economico, ma anche favorire con questo periodo intercapedine una riconciliazione tra la classe politica e l’opinione pubblica, e noi opinione pubblica, perche` io mi metto dalla parte del cittadino non avendo mai fatto politica, dobbiamo anche noi in questo periodo riflettere e dire dentro di noi “ma siamo sempre pronti a dare la colpa ai politici, ma io singolo cittadino, noi gruppi di cittadini stiamo facendo il nostro dovere per fare crescere l’Italia come vorremmo?”

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Vodafone Christmas.. together to make the world a happier place

Vodafone values putting a smile on somebody’s face, making the journey from TV viewer to life-long Vodafone customer start on the right foot. Kids love to wake up to a white Christmas day.. and nothing beats the joy of experiencing their happiness. Vodafone organises the impossible, a white Christmas for the Italian bimbo (child) who goes to sleep hoping to wake up to a snowed up front garden.

The whole neighborhood puts in a helping hand. From Granny scraping ice from the freezer. To mummy busy crushing ice. And people cycling bucket-loads of ice – enough to cover the green lawn with a white Christmas for the boy. There’s even somebody dressed up as a snowman as he wakes up to a drop jaw snow-covered front-garden. Sono le piccole cose che ti fanno godere il Natale… Christmas spirit is all about enjoying little things.

Vodafone’s power to you, enjoying little things together, and bringing great smiles and expectation to TV viewers is working out well. And not just on TV, do people build enjoyment together. In Italy, ‘Bicciclettamente Smart’ invited people to the Arena di Milano to cycle 510 stationary bikes, generating enough electricity to power a large Christmas tree. I looked up news about this, but there’s yet no mention of whether Vodofone reached the objective of lighting up the world’s largest human energy powered Christmas tree.

Anybody who was there… please leave comments below, in your own language, and tell us all about it. Are you one of the fans that won one of the 100 smartphones?

Facebook Bicciclettamente Smart event page

Mediaset and the freedom of TV in Italy

Starting with Canale 5 in the late 70s, the birth of Mediaset set the path for the liberalisation of the TV in Italy. Not all is clear about the situation of dominance of Mediaset in today’s Italy. The same liberalisation of the media, which was set in motion in the 80s, allows it to be publicly discussed on Italy’s television every day. 

Canale 5 and the other Mediaset Channels

TV in Italy was born in 1954, under a Christian Democrat government which led Italy between the post-WW2 years and the days of Mani Pulite (clean hands). Mani Pulite were the investigations that ran between 1992 and 1996, exposing the super-corruption nicknamed Tangentopoli (bribesville). The investigations exposed politicians from the main parties. The Christian Democrats (DC) ran Italy between 1943 and 1992 with only one major break — that between 1983 -87 when Craxi’s socialists (PSI) took power. Both Craxi and former DC prime minister Andreotti were later investigated.
 
TV has always been used by the party in power. Everybody in Italy understands the propagandist powers that the box in everybody’s living room and kitchen has. In 2005, Ambeyi Ligabo a UN expert on press freedom stated in his report on the freedom of opinion and expression in Italy, that “the public television network Rai has been strongly politicized since its creation in 1954. At the time and until the major political changes of the end of the 1980s, Italian public television was controlled by the political party in power, the Christian Democrats”.

The state-owned company Rai was the only one to hold a license to broadcast TV channels nationally. So much that when, in 1984 Fininvest acquired Rete 4 and Italia 1, Italian courts ruled that the acquisition was in breach of Rai’s right to a monopoly of simulataneous national broadcast. The courts ordered them to close doors. Craxi then rescued the situation with what many considered a rash decree which saved the Fininvest group. But that also ensured that Rai would stop being dominant.

  • It was a start of the end of the so-called lottizzazione (distribution) system of power in Rai, where the main political parties had agreed to control what went on the news and who got the top management postitions: the Christian Democrats within Rai 1, the Socialists within Rai 2 and the Communists at Rai 3. Of course, there still is lobbying and influence from government, but that’s Italy!
  • The European Audiovisual Observatory’s figures for 2008 show that the Mediaset and Rai channels together commanded over 80% of the market share. La 7, the channel owned by Telecom Italia, had a stable market share of around 3% which can be compared to the 10% of Italia 1, Rete 4, Rai 2 and Rai 3 and the 20+% of Canale 5 and Rai 2.
Berlusconi's Share in Mediaset: 38.62%
Berlusconi's Share in Mediaset: 38.62%

Are people wrong when they think that Berlusconi controls the media through his holding company: Fininvest’s share in the Mediaset group? Fininvest does not have a controlling share in Mediaset: the above chart shows it was less than 40% in Dec. 2009. In 2005 Berlusconi sold 20% of Mediaset to Kirch (10%), South African businessman Johann Rupert and the Saudi Prince Al Waleed Bin Talaal. In 1996 he continued to sell shares and relinquished control.  Today Berlusconi is an ordinary shareholder with his children Pier Silvio and Marina occupying the posts of deputy chaiman and director on the Board respectively. 

I am not drawing any conclusions. These are the facts and the rest is opinion which anybody can liberally use the media to share with whoever cares to listen.