Matteo Renzi, the Prime Minister of Italy, quite self-consciously made Silicon Valley the first stop of his first official American visit: “not New York, not Washington, not Boston,” Renzi pointed out, somewhat undiplomatically, to his audience at the Council on Foreign Relations, in New York, a decidedly more staid group than the ones that he had met at places like Google and Twitter. (The Italian Prime Minister is an inveterate tweeter.) Renzi has a sense for political theater. He had surprised his New York hosts, who had prepared for simultaneous translation and passed out headphones to the overflow crowd, by giving his talk in English—a charmingly imperfect but workmanlike English, somewhat in the spirit of the American appearances of his fellow Tuscan Roberto Benigni.
“Everybody loves Italy—its incredible past, for its present, its quality of life, food, holidays, wine … but the challenge of our government is to love our future,” Renzi said, playing the audience for laughs. “The most important experience of Italy will be tomorrow, not yesterday. The new Prime Minister of Italy is officially crazy!”
But, as he worked hard to please his American audience (he would also be attending the U.N. General Assembly), his real goal was a battle waiting for him at home, where he risks displeasing most Italians. A majority, in recent polls, are against removing an article of the Statuto dei lavoratori, or Workers’ Law, that keep firms from firing employees without showing “just cause,” a standard that, in practice, can make it harder to let an employee go than it is to get a divorce. (“The moment comes when we have to make some people angry for the good of everyone,” Renzi said at an appearance in San Francisco, in Italian.) “What is the goal of our government?” he asked the audience at the Council on Foreign Relations. “I think the first thing is, change the labor market in Italy, because the labor market in Italy is focused on the past. … The battle is with the left. People on the radical left believe that only if you defend the Statuto dei Lavoratori—a law passed in 1970—you are real men and women of the left. But forty-four years ago is a very different world. I am the leader of the left, and not of the Republican Party.”
Renzi insists that greater flexibility in the workplace is necessary to energize the stagnant economy in Italy, where unemployment currently sits at 12.6 per cent (and at forty-three per cent among the young). To many on Italy’s left, his effort to change the law is further proof that, although technically the leader of Italy’s center-left Democratic Party, he is nothing more than a conservative in disguise, whittling away at what protections Italy’s workers still have. “Renzusconi” is the moniker for those comparing him to his predecessor, Silvio Berlusconi. Renzi, an extremely deft communicator in the age of social media, is acutely aware that Renzimania—the enthusiasm that brought him into office in February—can quickly turn into Renzi remorse.
In May, Renzi got something of a mandate for change when his party won forty-one per cent of the vote in the European Parliament elections–the most by any Italian party in more than half a century. But the past few months have been cruel to Europe’s leaders. Italy’s economy, like those of many of its neighbors, is shrinking, putting it in danger of entering a deflationary cycle that might be genuinely crippling. The gloomy atmosphere has somewhat reduced Renzi’s exceptional personal popularity, which has so far been his greatest weapon. In the Italian parliament, he has only twenty-five per cent of the votes, along with twenty-five of deputies elected under the banner of another leader of his party, Pierluigi Bersani, who opposes Renzi’s “Jobs Act” in its current form and reminds Renzi “that he is governing with my twenty-five per cent.”
There is little doubt that the Italian system as a whole is sclerotic, slowed by an excessive number of laws and regulations, which are used by members of a parasitical political system to advance favored projects, block others, and, not infrequently, to line their own pockets. Italy ranks a rather dismal sixty-fifth on the World Bank’s annual ease-of-doing-business survey; it has dropped twenty places in the past ten years, falling behind Bulgaria, Botswana, and Belarus. It takes eleven hundred and eighty-five days to enforce a contract in Italy, closer to Angola (twelve hundred and ninety-six days) than France (three hundred and ninety-five), New Zealand (two hundred and sixteen), or the United States (three hundred and seventy).
Italy is suffering from a significant brain drain, in which, during the past twenty years, hundreds of thousands of its brightest young people have sought their fortunes elsewhere–there are between five thousand and six thousand in Silicon Valley alone. They have good reasons to leave.
The Italian labor market, with roughly twenty-two million workers, is split almost in two, between highly protected employees who can virtually never be fired and a growing number of mostly younger workers who live precariously off of temporary job contracts, which often pay around a thousand euros (fourteen hundred dollars) per month. As a result, many Italians live with their parents throughout their twenties and well into their thirties, hoping to save enough money to marry and have a place of their own—hoping, too, for one of those permanent jobs known as il posto.
Renzi has denounced the current system as a kind of “apartheid,” and insists that his reforms will end it. But some critics maintain that his proposed changes will not actually make things work better. In its initial form, Renzi’s proposal would not affect existing workers, only those hired from this point forward, meaning that it would not help much to eliminate dead weight, and would make the position of younger workers even more precarious. Unions in Italy are offering a compromise that would allow companies to hire and fire freely within the first three years of employment, but which would then grant the standard protection granted to other Italian workers. One can imagine, however, that this would encourage businesses simply to cycle through a new group of employees every three years.
Renzi clearly feels that it is important to give the Italian system a violent shock to stimulate employment. But, at the Council on Foreign Relations, rather than offering a vigorous, reasoned defense of his program, he skated ably and entertainingly on the surface, while repeating generalities about “future” and “past.”
“How do you say acciaio?” Renzi asked cheerfully.
“Steel,” someone called out.
“How do you say siderurgia?” It means steel industry; someone shouted “steel.”
“Steel! Steel!” Renzi mugged, looking puzzled and amused.
This may work less well at home. The day of Renzi’s New York appearance, the editor of Milan’s Corriere della Sera, Ferruccio de Bortoli, wrote a rather stern editorial that seemed almost to comment in advance on Renzi’s talk: “A stream of tweets does not cancel out the need for a well-written decree.”
Photograph by Rex Features / AP