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For those that don't follow Italian news, about ~200 local council politicians in Rome just got arrested over mafia ties. The previous city council was basically completely bought by the Mafia, and the newer one looks slightly cleaner. http://www.independent.co.uk/news/w...al-9901509.html This latest scandal basically encapsulates Italian politics in a nutshell. The ring leaders were an ex-far left extremist, a fascist hitman who spent 20 years in jail, and several center-left/center-right who changed politics more frequently than they changed their underwear depending on which way the money was coming from. The only thing they had in common was a desire to fleece money in any way they could through a combination of bribes, contacts, and threats (relatively rarely, they had everyone important on the payroll). Nationally, our political situation is a complete clusterfuck. In 2013, we had a new parliament elected. PD, the center left party, had a huge lead in the polls going into the election, but the leader, Bersani, ran an absolutely awful national campaign and barely squeaked ahead of PDL (Berlusconi's party) and Beppe Grillo's 5 star movement, a really weird populist coalition. Since then, PD tried to form a government with the 5-star movement and repeatedly failed. The leader (Bersani) stepped down. A new 'coalition government' was formed by Letta (a milquetoast PD leader) and the center right. They didn't do absolutely anything, and Letta got backstabbed by Renzi, an up and coming PD politician and the ex-mayor of Florence. Currently, we are lead by a coalition government made from Renzi and the remains of PDL - which has since splintered into a die-hard pro-Berlusconi faction, and a slightly more moderate center-right faction lead by Alfano, who backstabbed Berlusconi and split the center right. Renzi is an interesting figure - he is far, far younger than almost all Italian politicians, and has been trying to push forward big changes in labour markets, legal system, etc. Italians are universally pro-changes in the abstract, and completely against any change the moment it touches their privileges. I'll expand later when I have more time. iFederico fucked around with this message at 11:53 on Dec 4, 2014 |
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Dec 4, 2014 11:43
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That's a pretty amazing amount of corruption At that point, how do you even start going about cleaning it up?
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Dec 4, 2014 16:59
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To be honest Renzi is a youngish figurehead bent on the same "recipes for growth" as the leaders who preceded him. Loosening of labor rights, freezing of hiring and wages in the public sector and strict adherence to European deficit caps in spite of 3 years of recession (following, after a brief respite, another 2 year long recession). Very little of his policy are "pro-change". He turned a forever-losing nominally center-left party into a winning center-right one. Which is a feat, but maybe not an amazing one. The Rome scandal is actually interesting for its scale and scope but I think it won't really affect much. It seemed to have hit either embedded bureaucrats or the previous mayor whose political life was anyway over.
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Dec 4, 2014 17:16
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CarrKnight posted:To be honest Renzi is a youngish figurehead bent on the same "recipes for growth" as the leaders who preceded him. Loosening of labor rights, freezing of hiring and wages in the public sector and strict adherence to European deficit caps in spite of 3 years of recession (following, after a brief respite, another 2 year long recession). In terms of policy, he isn't that much further to the right than Bersani. The main thing is that in Italy, we have two categories of workers - those hired under a permanent term contract, which cannot be fired under almost any condition (it's theoretically possible but it just doesn't happen) and those under temporary contracts, which have absolutely no protection to speak of. Unions overwhelmingly represent the former category, and are absolutely against any changes to permanent contracts. Young people, unless they work for the government (which is not hiring at all, since people in government jobs don't quit) have basically very little hope of getting a fixed contract. While unions in theory do make some noise about job security for the young, in practice, they don't care at all. Young people are thus incredibly cynical about union politics.
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Dec 4, 2014 17:24
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It's cool how Italy is basically the argument against parliamentary democracy.
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Dec 4, 2014 17:40
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Post crisis Italy will make a great textbook example warning against the dangers of austerity after economic crashes some day.
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Dec 4, 2014 17:44
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iFederico posted:In terms of policy, he isn't that much further to the right than Bersani. There's got to be some conditions to fire people with those permanent contracts. Like, what if they literally don't do their job or do it with a hilarious degree of negligence?
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Dec 4, 2014 20:49
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Mr Luxury Yacht posted:There's got to be some conditions to fire people with those permanent contracts. In theory, it's possible to fire people after a very long disciplinary process. In practice, there are administrative tribunals that basically will always force the company to reinstate you unless you've stabbed multiple people at work. For example: http://archiviostorico.corriere.it/2008/giugno/24/Malpensa_rubava_dai_bagagli_giudice_co_7_080624001.shtml A guy working for our aircraft carrier, Alitalia, got caught on camera stealing from bags. A judge forced Alitalia to re-hire him because merely being filmed opening bags and pulling stuff out isn't proof he was stealing. On the flipside, people that don't have a permanent contract can be terminated more or less at will.
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Dec 4, 2014 23:00
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quote:In theory, it's possible to fire people after a very long disciplinary process. In practice, there are administrative tribunals that basically will always force the company to reinstate you unless you've stabbed multiple people at work. People get fired from work, much like anywhere else. The process is longer, that is true, but usually stacked against the worker. In 2012 there were 1 million people fired. About 200k for disciplinary reasons. Of the million fired about 20k were integrated back in the workplace by a judge. The proceedings took about 90 days to get sorted. I can't find the official parliament question and answer that brought these data so here's an uglier italian source for it. And you can also look at the OECD data. Italy's labor stringency is only slightly above average:  And look at that, under both Germany and France. quote:In terms of policy, he isn't that much further to the right than Bersani.
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Dec 5, 2014 03:23
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Yeah reading about permanent contracts that are really difficult to be sacked from makes me feel soooo much sympathy for the poor corporates who have such a hard time keeping employment turnover sky high.
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Dec 5, 2014 04:45
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Coohoolin posted:Yeah reading about permanent contracts that are really difficult to be sacked from makes me feel soooo much sympathy for the poor corporates who have such a hard time keeping employment turnover sky high. The fact that they're denied to young people is problematic, though.
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Dec 5, 2014 04:48
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computer parts posted:The fact that they're denied to young people is problematic, though. The government position though is that since they are denied to young people, they ought to be denied to old people as well.
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Dec 5, 2014 04:58
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Yeah it is unclear exactly how loosening labor restrictions will actually help young people in a serious way, if anything after a silver bullet program, they most likely is further consolidation of positions. It is a topic that came up in the Latin American thread. It is also unclear how much it helps the overall economy, there isn't likely to be a big increase in investment unless somehow Italy can undercut Eastern Europe and at the end of the day, it just might mean some companies improve their bottom line with firings. At the end of the day, it might make more sense to improve the temporary hiring process so there are some basic protections for young people. I don't see labor reforms fixing the situation in Italy anyway, it isn't going to disappear their public debt, take the off the Euro or solve continued austerity measures. I wonder if a actual leftist protest party can take off in Italy like Spain because the situation seems about as dire and the Five Stat Movement seems like it doesn't have a problem working with the European Euroskeptic right/far-right. It is in the same European group as UKIP and the Swedish Democrats.
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Dec 5, 2014 05:09
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The appropriate employment protection measure in the context of structural problems is more collective dismissal than individual dismissal - that is, mass retrenchment without cause - where Italy ranks higher than France and Germany. Macroeconomic problems do not translate to individual cause, after all. Atop that, if one is comparing against French and German employment protections, one should also consider French and German productivity of the marginal workers likely to be employed/dismissed. All this said, it is true that mere employment protection reform is unlikely to translate to substantively greater growth or greater employment unless real wages of those who remain employed fall substantially or productivity increases substantially. Reducing employment protections chiefly reduces frictional unemployment, but frictional costs are a small proportion of the raw costs of hiring people to do things. Unfortunately, left-wing/populist parties are unlikely to make much headway toward productivity improvements. The traditional ideological concept of of workplace occupation/seizure remains but first it is problematic in an economy that places far more value on qualitative aspects of production than raw quantitative aspects - delivering goods/services on time and on demand, rather than merely managing to deliver goods/services at all - and second it rapidly bumps up against a reality that the assorted stakeholders who the workplace is being seized from are established friends of populists. Pensioners, farmers, tax revolters, etc. Italian populists cannot even rally against tax evasion due to an uncomfortable reality that much of the evaded tax is being evaded by people who are not isolated rich people. ronya fucked around with this message at 05:47 on Dec 5, 2014 |
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Dec 5, 2014 05:42
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ronya posted:The appropriate employment protection measure in the context of structural problems is more collective dismissal than individual dismissal - that is, mass retrenchment without cause - where Italy ranks higher than France and Germany. Macroeconomic problems do not translate to individual cause, after all. I'd actually be really curious to read more from you on this topic ronya. Do you have suggested readings on employee protections/productivity improvements from a mainstream macro point of view? Math and stats heavy is fine, econ heavy, less so. To go back to Italy - the main problem is what you hinted at in the last sentence. Italian society has a lot of absolutely terrible laws and norms, which everyone, in the abstract, is in favour of changing. However, the moment concrete changes are put in motion, the people who stand to lose put up insane resistance destroying any chance at all of any meaningful reform passing - both from a left wing point of view, and a right wing point of view.
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Dec 5, 2014 09:49
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iFederico posted:However, the moment concrete changes are put in motion, the people who stand to lose put up insane resistance destroying any chance at all of any meaningful reform passing - both from a left wing point of view, and a right wing point of view. Well that sounds dreadfully familiar. Was going to post in here to ask about corruption in Italy because I heard it was really bad for Western Europe, but then I read the OP and WHELP Is bribery and that sort of activity mostly a government thing, happen pretty much everywhere, or somewhere in between?
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Dec 5, 2014 12:21
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Alctel posted:That's a pretty amazing amount of corruption
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Dec 5, 2014 12:29
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Zephro posted:I'm curious about this too. Corruption feels like a stable equilibrium when it becomes big enough - there's no-one capable of actually fixing it, and because it's in everyone's economic interests to play the game, it just persists forever. What can you do? revolt or let the germans take over
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Dec 5, 2014 14:12
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Zephro posted:I'm curious about this too. Corruption feels like a stable equilibrium when it becomes big enough - there's no-one capable of actually fixing it, and because it's in everyone's economic interests to play the game, it just persists forever. What can you do? This is Europe we're talking about. You can always roll out the guillotines. Of course like nine times out of ten it makes things worse but hey, sometimes it works! Sometimes.
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Dec 5, 2014 15:18
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Can anyone comment on this article? It's an American's commentary on an article in Der Spiegel which speculates that Italy might end up being the weak link in the Euro. I figure the folks in this thread are probably much better qualified to judge whether there's basis for this speculation. Naked Capitalism posted:Some Mainstream Italian Parties Now Advocating Euro Exit There's then some long excerpts from the Der Spiegel article (translated via google), with commentary, followed by this conclusion: quote:The right ing parties advocating a Eurozone exit is a sign that the Italian business community is coming to the point of view that the cost of membership outweighs the benefits. And Munchau warns Der Spiegel readers that they are right. He correctly points out that a departure is not imminent but when a conservative coalition wins an election, it will move either to depart the Eurozone or extract large waivers in order to remain. But the Eurocrats seem so conditioned to rely on “kick the can down the road” crisis responses that they are unlikely to take steps to alleviate mounting economic stress and resulting anti-Euro political resolve in Italy. Thoughts?
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Dec 5, 2014 20:08
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ronya posted:All this said, it is true that mere employment protection reform is unlikely to translate to substantively greater growth or greater employment unless real wages of those who remain employed fall substantially or productivity increases substantially. Reducing employment protections chiefly reduces frictional unemployment, but frictional costs are a small proportion of the raw costs of hiring people to do things. It is unclear how growth is going to improve and unemployment will fall if wages of fall substantially, if anything Italy is facing a deflationary situation. I agree though on its own it won't reduce unemployment. quote:Unfortunately, left-wing/populist parties are unlikely to make much headway toward productivity improvements. The traditional ideological concept of of workplace occupation/seizure remains but first it is problematic in an economy that places far more value on qualitative aspects of production than raw quantitative aspects - delivering goods/services on time and on demand, rather than merely managing to deliver goods/services at all - and second it rapidly bumps up against a reality that the assorted stakeholders who the workplace is being seized from are established friends of populists. Pensioners, farmers, tax revolters, etc. Italian populists cannot even rally against tax evasion due to an uncomfortable reality that much of the evaded tax is being evaded by people who are not isolated rich people. Granted, if anything it shows a true lack of faith in both the government and the economy of the country itself. Pensioners, farmers and other workers, with often good reason, don't see much merit in productivity improvements and cracking down on tax evasion if they personally don't see benefit. In the US, productivity improvements and tax evasion among the middle/working class is comparatively low while wages are stagnant and inequality is continually increasing. It is clear why it is happening, but not exactly how traditional reforms would impact the broader economic peril Italy faces. Also, the re-rise of Lega Nord isn't a good thing especially since MS5 is also moving more to a radical position (which is still rather ambiguous). If PD destabilizes, it might be tough to form even a grand coalition without one of them. Ardennes fucked around with this message at 20:48 on Dec 5, 2014 |
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Dec 5, 2014 20:27
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quote:Atop that, if one is comparing against French and German employment protections, one should also consider French and German productivity of the marginal workers likely to be employed/dismissed. At the margin companies hire temporary workers or just hire illegally. The difference in employment protection between these 2 groups is barely noticeable. Protected workers are a stock more than a flow. At the margin they barely matter. They are a memento of better days. quote:All this said, it is true that mere employment protection reform is unlikely to translate to substantively greater growth or greater employment unless real wages of those who remain employed fall substantially or productivity increases substantially. Reducing employment protections chiefly reduces frictional unemployment, but frictional costs are a small proportion of the raw costs of hiring people to do things. Since we are talking about lowering real wages with respect to Germany there are really only two ways around it: (1) currency depreciation (2) inflation in italy and not in Germany. The (1) we can't do because of the euro and (2) we can't do because Germany runs the ECB and any inflation rate above 2.0001% will summon Hitler back. So how does the economy equilibrate? The only way it can, by firing workers, by saddling companies with debt, by rounds of writeoffs in the banking system. The banking system then curtails lending further and start the cycle back again. quote:let the germans take over Much appreciated. CarrKnight fucked around with this message at 04:41 on Dec 6, 2014 |
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Dec 6, 2014 04:36
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quote:The right ing parties advocating a Eurozone exit is a sign that the Italian business community is coming to the point of view that the cost of membership outweighs the benefits. And Munchau warns Der Spiegel readers that they are right. He correctly points out that a departure is not imminent but when a conservative coalition wins an election, it will move either to depart the Eurozone or extract large waivers in order to remain. But the Eurocrats seem so conditioned to rely on “kick the can down the road” crisis responses that they are unlikely to take steps to alleviate mounting economic stress and resulting anti-Euro political resolve in Italy. The fact is, you can't really quit the Euro. Even the most extreme zealot bent on running the country into the ground (and there are plenty) would have second thoughts when it'd be time to implement the Euro exit.
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Dec 6, 2014 08:14
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CarrKnight posted:Exiting the Euro is a common refrain from the (extreme) right when they are not in power. Berlusconi, who ran the country more or less for 20 years, got a lot more critical of the Euro once out of power. Grillo's people are crazy enough that they might actually go ahead. Of course, they are so crazy that they will never ever vault into power because they refuse to form any kind of government that won't completely acquiesce to every single demand they make.
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Dec 9, 2014 19:34
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Surely the sheer cost and disruption of leaving the Euro and re-establishing a national currency would make parties reconsider in Italy and Greece? It was one of the reasons why the Scots decided against independence.
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Jan 5, 2015 12:39
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Josef K. Sourdust posted:Surely the sheer cost and disruption of leaving the Euro and re-establishing a national currency would make parties reconsider in Italy and Greece? It was one of the reasons why the Scots decided against independence. The current Italian government is hella pro Euro. They would like some sweet, sweet quantitative easing from Draghi, but they aren't seriously considering leaving the Euro. Greece is completely different - their left candidate doesn't want to leave the Euro either, but believes he can play poker against Merkel and the Troika to obtain some debt relief in exchange for leaving the Euro. Of course, Germany government officials immediately leaked to Der Spiegel that they don't give a poo poo if Greece leaves.
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Jan 5, 2015 13:56
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Anyone with a modicum of economic understanding quickly realises that leaving the euro is the best option, the problem lies in surviving the immediate aftermath, both as a nation and personally. It's political suicide.
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Jan 5, 2015 16:00
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Sergio Matarella is Italy's new president. It's a mostly ceremonial role (except during a crisis,) but since his brother was killed by the Mafia in 1980 maybe he'll push things in an anti-corruption/Mafia direction. Also shows that Renzi still has support.
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Jan 31, 2015 13:25
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