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“Negotiated democracy” and concrete government to get away from low growth and high inequality

How can we emerge from this pandemic, and above all, how can we relaunch a process of economic development that is more robust, socially inclusive and sustainable? How can we move beyond the fragility that has been dramatically revealed to underlie our complex and interconnected societies, which are fast, frenetic, obsessed with progress but oblivious to limits and inequalities, and increasingly exposed to environmental, social and health shocks? Or in short, how can we transform the pain of the Covid-19 crisis into an opportunity for better growth, in a country like Italy that has long been characterised by low, non-inclusive growth?

It’s partly a question of merit, choices, investments and reforms. But it’s also a question of method, which is closely related to good policy and relationships between the government, political forces and various social players. The latest idea being discussed in these fraught weeks is that of “negotiated democracy“.

Let’s begin with merit. We must decide how we can effectively use the extraordinary financial resources made available by the loosening of EU restrictions, the ECB’s decisions on liquidity, the SURE and ESM funds (which it would be irresponsible not to use, given that the 36 billion euros up for grabs comes with negative or zero interest, and just one constraint, namely that they be used for general health care, which means new and better hospitals, pharmaceutical research, quality of care, but also stimulus packages for the robotics and healthcare equipment industries, two high-tech areas in which Italy excels) and the 170 billion euros and more in the Next Generation EU recovery fund, destined to support the Green Deal and the digital economy.

Conte’s government has not shown any evidence of clear thinking; internal disagreements between the political forces of the coalition are tearing them apart, and the government is taking refuge in rhetoric and propaganda (the concept of the Estates-General, the useless proposal to cut VAT, the postponement of decisions regarding the ESM, etc.), and one is reminded strongly of the lucid, cynical comment attributed to Giulio Andreotti: “It is better to scrape by than to give up entirely.” The opposition, which is divided internally, alternates between anti-EU statements (above all from Lega) and calls for a government led by Draghi (a pillar of the EU and the ECB policies who is unpopular with anti-EU populists), suggestions for a flat tax and displays of a deep sense of responsibility for and a shared commitment to the anti-crisis measures (Forza Italia and its leader Silvio Berlusconi).

And yet, there is a whole catalogue of clear, serious choices the government could make in order to get the economy back in gear and focus on growth in the medium term. There are the 120 pages to the “Colao plan“, many of which are teeming with practical proposals. Or there are the 91 “simple” anti-bureaucracy proposals, prepared by Carlo Cottarelli and sent last Saturday to the Ministry of Public Administration (as explained in great detail in La Repubblica). Or indeed, the “proposals for development” contained in the weighty “Italy 2030” volume presented at Assolombarda last week, and edited by 12 of Italy’s top experts in the socio-economic sphere, containing both extensive analytical data and a wealth of concrete proposals. But there is also the first in a series of Confindustria documents, dedicated to energy and competitiveness, which have been met with great appreciation by the Minister of Development Stefano Patuanelli; further documents on infrastructure, bureaucracy, productivity, the labour market, innovation, etc. are being prepared, and Partito Democratico has also already presented its “plan for industry.” In short, there is no lack of ideas or proposals. Not to mention an extensive body of expert, well-supported economic literature.

What are in short supply, though, are lucidity and the political strength to choose and launch the debate in parliament, in order to create a reliable plan for programmes and begin investment and reform.

This leads us to the second question, of method.

In order to get the country back on track, we need a comprehensive, convergent commitment from all political and social forces, similar to the one we had during the other serious crises in recent Italian history – from the immediate post-War period with the constitution and reconstruction, to the response to the economic crisis and terrorism during the Years of Lead, right up to the terrible year 1992, which saw the political and judicial crisis of Tangentopoli, attacks by the mafia on the state, like the bloody murders of magistrates Giovanni Falcone and Paolo Borsellino, and the dramatic speculative attack on the lira in the late summer of that year.

We emerged from these events with an assured sense of political and social unity. And indeed, it was in the early Nineties that Carlo Azeglio Ciampi, as prime minister, launched the season of “coordination”, a government decision that served to dampen radical conflicts with a style of discussion based on getting the essential answers that were needed. There is a political class that – in spite of the storm that was Tangentopoli – has succeeded in getting high-quality people into institutions. The business community and the trade unions are in agreement that reforms, modernisation of the economy and privatisation and then closer connection to the EU are the main way to save Italy from degeneration and decline.

During a period of difficult transition such as this, the government at the Quirinale serves as the main point of reference and assurance, with its succession of prestigious figures who demonstrate a solid sense of responsibility and a strong political and institutional culture: Oscar Luigi Scalfaro, Carlo Azeglio Ciampi, Giorgio Napolitano and, now, Sergio Mattarella.

In the current crisis, which is the result of the pandemic and the recession, there is much to be done in order to get a frightened and impoverished Italy back on its feet. The nation’s health has been wounded, but above all, so has its trust in the future.

These are difficult times, where seriousness and a sense of responsibility are needed, and not demagoguery and illusions about the extraordinary powers of a single “strongman”.

This is why the idea of a “negotiated democracy” is beginning to gain ground in public discourse, as eloquently described in a recent essay which features in the latest issue of Il Mulino by Carlo Trigilia, professor of economic sociology at Cesare Alfieri School of Political Sciences at the University of Florence and former Minister for Territorial Cohesion in the Letta cabinet, as well as in the pages of the book Italia 2030 – Proposte per lo sviluppo (“Italy 2030: proposals for development”), which we have mentioned previously. The idea has also been firmly adopted by none other than the new president of Confindustria, Carlo Bonomi.

It is a choice to involve the various political forces – the opposition included – in the preparation of government decisions. It is a choice to pay attention to parliamentary dialectics. To enhance the role of representation and mediation played by key social players and intermediaries. It certainly isn’t the wearying downward spiral of mediation in the absence of a majority political agreement (which is how things stand currently). Nor is it a game of endless discussion and postponement. Far from it. If anything, it is a willingness to listen to and make room for knowledge and skills, legitimate interests well embedded within a general framework, cultures that are widespread in civil society. And then, the government will be called upon to decide on investments and reforms. Not the usual media posturing then, but rather a period of serious, timely, essential work, on what must be done and how, on the obstacles that must be overcome, and on the deadlines and time scales that must be respected.

At least for now, the season of “majority democracy”, of “personal parties” and of a leader-centric approach to politics based on the exasperation of instant consensus (with all the deviations urged and endured through social media channels) has ended, and we find ourselves in a difficult socio-economic phase, where trust must be rebuilt and where the mechanisms of wealth, innovation and well-being must be relaunched.

Inclusive growth is one of the possibilities on the horizon, which is naturally very different to the “high non-inclusive growth” of Anglo-American liberalism (marked by social imbalances and growing inequalities) but also to the low non-inclusive growth that has characterised Italy. The point of reference is Germany, a country that is wisely changing course with respect to the ideological orthodoxy of having the “accounts in order”, rediscovering the good sense behind a solid decision which is focused on inclusive growth and strong social cohesion, in order to relaunch Europe (the memory of Thomas Mann’s dictum is strong: we need a European Germany, and not a German Europe). A proportional electoral system (with electoral threshold), coalition governments, the involvement of social players in key decisions.

The route chosen by Portugal also points to very interesting paths, involving as it does the centre-right opposition in the general decisions promoted by the centre-left president.

This also provides a number of useful indicators for Italy. It is truly a negotiated democracy, with a strong sense of responsibility and some serious teamwork. Ambitious projects for development, to finally raise Italy out of the swamp that is its stagnating economy. And of course, a concrete approach to government.