The honeymoon is over for Italy’s PM Renzi

Friday’s mass protests in Italy mark the end of the honeymoon period for PM Renzi

Thousands took to the streets of Milan and other cities on Friday in the first of union-led protests that will culminate in a general strike next month. At issue is the government’s labour counter-reforms that will make it easier for firms to fire workers, adding to the growing ranks of the precariat in the Eurozone’s third largest economy.

The protests came as new new figures released Friday showed the country had entered its third recession since the great financial crash of 2008, a further blow in a country suffering from record unemployment.

Pro-business pundits who fill the airwaves and column inches in newspapers are backing Renzi’s ‘reforms’, arguing that they will boost growth. Unions, led by the CGIL that organised yesterday’s strike in Milan, argue that reducing job protections will entrench Italy’s position as a  zombie economy: unable to export its way out of the crisis due to a Euro exchange rate that is overvalued and unable to boost the domestic economy because the reforms will drive down already low wages and undermine job security,  thus deterring ordinary Italian to spend in the high street and on products and services made by local business.

The reforms are the latest in many supposedly ‘growth-enhancing’ attacks on workers’ employment rights that have been waged by governments of the Left and Right and have ensured, along with the monetary and fiscal straight jacket imposed by EU treaties, Italy is no richer today than it was in 2000 when it joined the Euro currency.

Friday’s protests mark perhaps a permanent break between Italy’s largest union and Democrats, the principal ‘center-left’ party that is a fusion of ex-communists and ex-Christian Democrats.

Matteo Renzi, a former mayor of Florence who took the helm of the Democrats last year, became the country’s youngest Prime Minister in February. He has sought to present himself as something fresh in Italian politics. He’s has been likened to Tony Blair, the former British Labour Party leader and Prime Minister, for his effective use of the media and his ‘modernising zeal’. As in Britain, ‘modernisation’ is code for rolling the clock back – and nothing is more important in reversing the social, economic and political gains of generations that reducing the influence and power of trade unions, cosying up to big business and cultivating the right-wing press.

Renzi has been assiduous in courting billionaire former PM and convicted tax fraud Silvio Berlusconi who controls the country’s private TV and a number of newspapers. And good press has followed. On the other hand because of the long links between the CGIL and the Democrats that date back to the time of the Italian Communist Party, which dissolved itself in 1989-91 to form a social democratic processor party to the Democrats, Renzi has enjoyed support from the labour movement too. It helped that among his first measures included tax cuts to those on lower incomes.

Opinion polls give me a rating of 40% or more, unheard of since the days of the Christian Democrats who ruled Italy for decades after the Second World War until they collapsed amid the Bribesville corruption scandals in the early 1990s.

This labour reform that has made Renzi the darling of the business community and international institutions at the service of international capital, like the IMF and OECD. But it also means Renzi has clearly chosen sides. He’s with the bosses, not the workers.

Renzi will no doubt try and ride out this storm, although it will be uncomfortable for what is left of the Left in the Democrats.

What’s for sure, labour market deregulation as a way to create an American-style workforce on low pay, precarious contracts and afraid to stand up for its rights, will not help lift the Eurozone out of its woes. It only creates a beggar-thy-neighbour downwards deflationary spiral that will leave no prisoners, from the youngster working in on a zero hours contracts to even the biggest corporations fattest cats and the strongest economy.

The fact that now even Germany – which started the wage-slashing downward  spiral to depression with Gerhardt Schroeder’s labour reforms in the early 2000s – is now struggling is proof of this.

The current showdown in Italy is at root about who pays for the crisis and who can help lift us out of it. The labour movement and most left-wing parties haven’t got all the answers – sadly it has been left to dangerous demagogues like Beppe Grillo and Farage with their anti-immigrant policies to make capital out of some unavoidable truths about the disasters wrought by the Eurozone, the Eurocrats and their neo-liberal policies.

But the basic argument that the crisis can only be solved if people have decent jobs and a bigger share of the wealth – European wages are still stuck at 2008 levels  – they generate has to be addressed, or it is quite obvious the crisis is going to go from bad to worse.

How likely common sense will prevail, in Renzi’s Italy as in Britain, though, is an open question.