The sea of history is a stormy one. At particular moments high-tides bring cultures and nations to positions of influence and cultural dominance, only for the inevitable ebb and flow of time to see them retreat, shrink and waste away in the waters of the centuries. This phenomenon spawned Gibbons’ masterpiece “The Decline and Fall of the Roman Empire” and countless other literary studies, but its relevance for modern cultural and political debate is too often overlooked.
The great Russian historian and ethnologist, Lev Gumilev is a master of the topic, and his “passionary” theory of ethnogenesis describes how each nation goes through certain historic moments which define its economic and military rise, its breakthroughs in the arts and sciences, but also the nation’s eventual decline and death. We have witnessed numerous of such rises and downfalls throughout history. As noted above, Gibbons entered history by writing precisely of the fall of the previously potent and flourishing Roman Empire in 193. Not only did the former Roman Empire never regain its “passionary” energy in modern history, its modern incarnation – the Italian Republic - is now rapidly losing much of its economic power and political weight on the European continent. While other nations, like Russia, China and India profited from the latest financial and economic crisis and are regaining their “passionarity” (growing into the aspiring leaders of the new world), some European countries seem to be in a continuous economic decline or stagnation. Despite various efforts the waters of their culture and economy remain stagnant.
On August 6 the Italian government confirmed that the country had slipped back into recession. The GDP fell by 0.1% and by 0.2% in the first two quarters of 2014 respectively, which is the weakest growth since 2000. Italian GDP has never returned to pre-crisis growth, au contraire, it’s still 9% lower than the 2008 GDP level. Meanwhile the country’s public debt has risen from 116% of its GDP (in 2010) to an astronomical 133% this year. Italy’s unemployment rate is one of the highest in Europe. Italy’s youth unemployment rate is horribly high and has increased to 43.70% in June of 2014 with an even higher rats in the poorer southern regions. While the Spanish government, facing a similar problem, has taken active measures to reform its labour market – it limited companies’ use of short-term contracts, which previously let companies easily fire their employees; and offered government subsidies to companies which hired jobless employees offering them long-term contracts. After the legislation was enacted in 2010, it has brought visible results by the summer of 2014 when the unemployment rate has started to decrease. The Italian unemployment rate, on the other hand, not only did not decline, it has been gradually growing, which can only aggravate Italy’s overall economic situation. What is especially alarming is the malodorous fog of social disaffection, which is now hanging in the air.
The figures quotes above are ugly numbers that confirm the worst predictions of Matteo Renzi’s most fervent opponents. Mr Renzi should be greatly concerned about the demoralizing effect of those numbers on the already pessimistic Italian people who have gone through countless government changes from right to left and back to center. They have watched with bored resignation governments come and go but the substance has always remained invariable. It can be no secret that the great slogan of the cynically powerful was written about Italy (Sicily to be precise) by an Italian – Lampedusa’s “Everything must change so that nothing changes”.
It’s almost as if Italians have grown old and tired in the absence of real choice. In this context of cultural and economic penombra a 39 year-old former mayor of Florence, Matteo Renzi ermerged as ashining light - a promising candidate who, many hoped, had a fresh view and energy which might bring Italy back to its “passionarity”. Some experts sustain that the reason for the country’s GDP decline and public debt rise are not just the austerity measures introduced by Brussels. In fact, if we were to dig deeper into the reasons of Italian economic malfunctioning we would have to go 20 years back in time. It was in the 90s that the country started to regress inexorably. The stagnation in economic growth and the unconvincing political attempts to revive the economy in the last 20 years with massive government cash flows have created an enormous public debt, which like an over-heavy anchor pulled the good ship Italy down at the first signs of the 2007 financial crisis.
The current economic recession may jeopardize the necessary political reforms planned by Renzi who came to office in February. Many hopes were placed on his plan to boost economic growth and to give the corrupt Italian political system a much needed structural reform, including the change of the electoral law that would guarantee a more effective and stable form of government.
What Mr Renzi has done so far is almost invisible in economic terms. The government has cut income tax by 80 euro a month for lower-paid workers, a move which was introduced right before the European elections in May. It is fair to suggest that this measure might have brought him victory but it will not have any or at most an infinitesimal impact on domestic consumption. So far the new promising government who earlier this year made European investors feel “cautiously optimistic” toward Italy, is turning into another “puppet” at the local political theatre.
There are several reasons which point in ethnogenetic terms to Italy’s “imminent death”: the public debt, the productivity shortfall, lack of competitiveness, the corrupt and malfunctioning political system and the enormous economic and cultural abyss between the South and the North of the country. The country’s economy is dominated by small and medium sized businesses. Yet in the first quarter of 2014, 3600 small and medium sized businesses went bankrupt (numbers released by UnionCamere). The rate has grown by 22% since last year, which means that something like 40 Italian companies cease to exist every day. It’s interesting that more than 80% of these companies either has no website at all, or if they did, it was only in Italian. Such small companies are rarely efficient or competitive, or even visible on the global or regional (European) market. Traditions, what we often admire about Italians as the way of leading their family lives, need to be combined with digital innovation and an embrace of the English language when it comes to business. Only 17% of all Italian companies promote their products online or on social networks.
But even the evident lack of efficiency doesn’t explain the absence of growth. Companies that are efficient and competitive on the Italian market are still trapped by unbelievably high income taxes (the highest in EU). This is coupled with a culture of non-payment of taxes which leads to the penalizing of the innocent for the evasion of the guilty, and a further round of cynical anti-government feeling. Taxes must be cut significantly to encourage companies to grow regionally (within the EU) and globally. The taxation system must also be simplified and completely reorganized in order to boost economic growth.
Some of Italy’s troubles arise from its geography. In 1861 Giuseppe Garibaldi, hero for some and a cold-hearted, clever businessman for others, united North, South and Centre (each variously sub-splintered into various duchies and kingdoms) into one country. Some had trouble adjusting to the new political reality, others still haven’t got used to the new economic reality and dramatic difference between the formerly rich South and the present day rich North. GDP per capita is more than 40% higher in the North than it is in the South. This brings obvious social tensions, and gulfs in citizens’ experience in such areas as unemployment and black market labour.
Few can hold out much hope that the glory that was Rome will be reincarnated in the reality that is modern Italy, even with “Emperor” Matteo Renzi in office. A few years ago all Italian troubles were supposed to pass with the end of Berlusconi era. Until recently the economic recession was due to the “eurozone and the economic crisis”. What excuse is hidden in Renzi’s pocket, we shall see. For now, it is clear that the “passionarity” flame has abandoned the land kissed by the sun and moved on to other, more promising and more efficient lands. Gumilev would have understood this very well. It is doubtful if Italy’s ageing and corrupt political caste is similarly aware.
