Italy's New PM and Old Unemployment Problem

With a 2 trillion euro public debt and thousands of companies going out of business, Italy isn’t exactly the most attractive venue for a leftist political leader of overweening ambition. And yet within almost no time, Matteo Renzi, a virtual unknown, grabbed Italy’s helm, having deftly ousted his do-nothing predecessor, Enrico Letta.

Here you have to ask yourself: why? Why would Renzi, or in fact anyone, want the job of running Italy, much less push out a member of his own party, as Renzi did, in order to get it?  Unemployment among young people—traditionally pretty high because employees in Italy are almost impossible to fire—is now at its highest: 42 percent.

“The problem is jobs, jobs, jobs,” Ángel Gurría, secretary general of the Organization for Economic Cooperation and Development told Bloomberg last month in Davos. “There is nothing politically more explosive, more dangerous, and more destabilizing than having a whole generation of young people being very frustrated.”

He is not exaggerating. The young generation is not simply frustrated, it is doomed. In 2012, the unemployment rate among the young of Naples was 53.6 percent. In Reggio Calabria this year 68 percent of its young are jobless—20 points worse than last year.

Of course if you tell employed, middle-aged Italians that with those kinds of sad statistics, their country is in deep trouble, the answer is invariable and automatic: those areas are in the south, comes the ready response, and the south has always had big unemployment problems.

Now it’s not just Naples or Calabria however. At practically every ATM machine in Rome, some mendicant covered in rags is standing immobile, palm outstretched, pleading for a handout from nervous bank customers.

These beggars are no longer, as used to be the case, impoverished illegal refugees from desperate nations or gypsies with thin babies. They are Italians, citizens of a country where the right to work is enshrined in Article IV of the nation’s Constitution. Actually Article IV is fairly expansive in its promised rights: not only does the citizen deserve to work, it says, but the Italian government, for its part, must “promote conditions that fulfill this right.”

Well that was yesterday.

Now it’s up to Renzi, a politician whose only claims to fame until a few days ago were (a) his age—he is 39, and that’s considered a good thing in a country traditionally run by a gerontocracy; (b) his position as mayor of Florence (population 370,000); and (c) his passion for riding a bicycle. With these three assets on his resume, the new prime minister is supposed to lead a nation of 61 million out of the desert. Renzi has promised to do just that: More jobs, he swears, without quite spelling out how this miracle will be achieved. Oh—and half the members of the Renzi Cabinet, he adds, will be women.

This is all very nice. I’m the last person to gripe when women, particularly Italian women, get jobs. But alas, I believe they are the only ones in Italy who will.

Photo Credit:  Presidenza della Repubblica


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