Penury may not be the noblest reason for cleaning up public life but as long as the drive to improve public
Posted in General on 23. Jul, 2010
Penury may not be the noblest reason for cleaning up public life, but as long as the drive to improve public finances persists, it seems there is a real chance of bringing about lasting change.Andrew Gumbel. Yitzhak Rabin was the least predictable of peacemakers, an old soldier with an instinctive distrust of the kind of bright young intellectuals who contrived the Oslo breakthrough with the Palestine Liberation Organisation. A decade ago, they would have got away with it because they were powerful enough to block all opposition. But times have changed.Within a few weeks, magistrates and tax inspectors were crawling all over Gemina after discovering an L800bn hole in the books of the company’s publishing subsidiary, Rizzoli, and the merger deal was called off.
This week Mediobanca received another slap in the face after it bought more than 10 per cent of the shares in Montedison-Ferruzzi’s holding company on the sly. The Milan bourse regulator took everyone by surprise by forcing Mediobanca to make a formal takeover offer and buy 10.8 per cent more of its shares on the open market.Italy’s revolution is far from complete. It still has no stable political structure, and its economy is crying out for proper regulation But these recent episodes suggest a start is being made. The political establishment was not consulted; neither were minority shareholders. Two months ago Gianni Agnelli, chairman of Fiat, and the head of the Milanese merchant bank Mediobanca, Enrico Cuccia, announced a plan to create the country’s second-biggest industrial conglomerate by merging two loss-making groups under their control, Montedison-Ferruzzi and Gemina.The deal had all the hallmarks of traditional Italian business practice, a piece of economic engineering worked out between old friends behind closed doors. So cushioned have they been for so long, they do not understand why the state is no longer prepared to plunge billions of lire into opera each year and get back less than a tenth of its investment.The changing mentality is beginning to have an effect on the economic big league. Workers at La Scala opera house in Milan, for example, are threatening to call off the opening night of the new season because they see the management’s attempts to cut costs as an attack not just on their lifestyles, but on the very culture of arts administration in Italy.
Political sources suggest that the magistrates may have been tipped off by post office managers looking for a way to by-pass the powerful trade unions and cut as much as a quarter of the 200,000-strong workforce.The need to eradicate waste and privilege is causing consternation in many areas of Italian life. The investigation into the fake invalids at the post office, for example, was partly motivated by the urgent need to modernise a notoriously wasteful and inefficient public service. The only recourse was to denounce the politicians.Three years on, the revolution in Italian public life has shifted focus. Before, the target was larceny on a grand scale – politicians who stashed gold ingots under their mattresses and siphoned off chunks of the country’s GDP into anonymous bank accounts in the Far East.Now, after a period of high instability, it is institutions beyond the strict sphere of politics that are under attack. With Italy hitting a recession along with the rest of Europe, it was no longer reasonable to pay as much as 60 per cent of a contract’s value in kick-backs. Italy is being forced to confront every area of public life and re-examine the extravagant habits of the past. The process started three years ago, when the “clean hands” team of magistrates in Milan brought down an entire generation of politicians with their anti-corruption investigations.Sweeping away the old order was not prompted by any great rethinking of ethical standards in public life; the bribes large companies were expected to pay politicians and their parties had become too expensive.