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Wednesday, December 18, 2013 3:12 PM


Italy's President Warns of "Widespread Social Tension and Unrest" but Offers No Solutions; "Pitchfork Protest" Comments From Italy


President Giorgio Napolitano, Italy's figurehead president (power is in the hands of the prime minister) fears "indiscriminate and violent protest."

Napolitano is a bit late in his assessment given the massive number of "pitchfork protests" already underway. Moreover, Napolitano offers no solution to the mess.

Ambrose Evans-Pritchard reports Italy’s president fears violent insurrection in 2014 but offers no remedy.

Events in Italy are turning serious. President Giorgio Napolitano has warned of “widespread social tension and unrest” in 2014 as the Long Slump drags on.

Those living on the margins are being drawn into “indiscriminate and violent protest, a sterile lurch towards total opposition”.

His latest speech is a veritable Jeremiad. Thousands of companies are on the “brink of collapse”. Great masses of the working people are on the dole or at risk of losing their jobs. Very high rates of youth unemployment (41pc) are leading to dangerous alienation.

“The recession is still biting hard, and there is a pervasive sense that it will be difficult to escape, to find a way back to full growth,” he said.

Mr Napolitano is alarmed, and so he should be. The “forconi” pitchfork revolt has taken a disturbing turn for Italy’s elites. Police took off their helmets in sympathy at the latest mass demo in Turin.

This is becoming an anti-EU movement. One of the Forconi leaders has just been arrested for climbing up the EU offices in Rome and ripping down Europe’s blue and gold flag.

Where this is going is anybody’s guess. Citigroup says Italy will remain stuck in depression with growth of 0.1pc in 2014, zero again in 2015, and 0.2pc in 2016. If so, Italy’s output will be 10pc below the former peak a full eight years after the crisis, a far worse performance than during the Great Depression.

Even if the eurozone recovers over the next three years or so, the best that Italy can hope for is stabilisation at levels of mass unemployment – 20pc if you include Italy’s extremely high level of discouraged workers (three times the EU average) who have dropped off the rolls. The question is how long society will tolerate this. None of us know the answer.


Pitchfork Comments From Italy

In regards to the pitchfork protests I asked reader "AC" who is from Italy but now lives in France for some comments. "AC" replied ...
Hello Mish

The "pitchfork protest" consists of heterogeneous groups with heterogeneous goals: some are asking for lower taxes and less bureaucracy, some others are asking for more government spending and intervention. And for still others, it is not clear at all what they are asking for.

There is no common goal, no common target, no common platform, not even a common method of protest. There is no clear leadership in the movement. The only common glue seems to be the protest against privileges of the political class.

In comparison, Beppe Grillo's star movement was very well organized from the beginning, with a clear leadership. This has been key factor in its further development.

From that standpoint, I think the "pitchfork movement" will not last long, at least in the present form.

That said, it's significant the protest is spreading out rapidly in such a anarchist way. People are ready to follow anybody who shows a little bit of anger and has some capacity to organize people.

Where this leads is unpredictable.

Best regards,
AC
Solutions

What Italy needs to do is easy enough to describe in six simple bullet points.

  1. Dump the euro
  2. Lower taxes  
  3. Political reforms
  4. Economic reforms
  5. Pension reforms
  6. Work rule reforms

However, describing what needs to be done, and actually doing it are two different things.

In the above list, only number three is being discussed in a serious way, and then only because the Constitutional Court recently ruled that seat appropriation in parliament (giving a majority in the lower house to the largest vote-receiving party) is unconstitutional.

See Italy looks to replace unconstitutional election law.

Curiously, a return to equal representation could mean more gridlock on economic reforms because the numerous party system in Italy practically guarantees no one will ever get a majority.

In the meantime, as "AC" notes,  the protest is spreading in unpredictable ways.

Perhaps it fizzles, perhaps it gets organized, perhaps it merges with Beppe Grillo's 5-Star Movement, or perhaps it culminates in mass "I'm mad as hell and can't take it anymore" riots.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com


Copyright 2009 Mike Shedlock. All Rights Reserved.
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