The Coronavirus Exposed the West’s Weakest Link
Italy rallied after being hit hard by the pandemic. But it is not out of the woods.
In Europe, Italy was hit hardest by the pandemic because it was hit first. Hospitals filled up with patients; one local newspaper was so overwhelmed with obituaries that it published only thumbnail-size ones. The entire country was subject to draconian restrictions, the strictest in the West.
Still, Italy rallied: Infections are now under control, a contact-tracing system is in place, and its economy and borders have reopened, although not to visitors from the United States. Tourist-dependent cities like Rome, Florence, and Venice are still suffering, but Milan, the country’s economic engine, is slowly coming back to life.
Italy is not out of the woods, though. It has the third-largest economy in the European Union, after Germany and France, and the second-highest public debt as a percentage of the economy, after Greece. It is led by a weak coalition government. Its middle class is struggling, its social mobility declining, and its poverty rising. Its gross domestic product is expected to drop by about 11 percent this year. The country’s interior minister recently warned of possible social unrest this fall if businesses fail and lay off workers. In the meantime, organized crime is poised to pick up some of the slack by offering loans at usurious rates. Its population is declining—the country registers more deaths than births, while the percentage of citizens emigrating rose 16 percent from 2018 to 2019, even before the pandemic hit. It has among the lowest female-employment levels in the EU. Its faith in the EU project is flagging, and a right-wing populist opposition party, which is leading in polls, is under investigation for illegal dealings with Russia.
The coronavirus has decidedly confirmed Italy’s place as the weakest link in the West—the biggest country with significant economic and political instability; a proxy battlefield in Western Europe between American, Chinese, and Russian influence; and the most serious threat to the future viability of the European Union. “Italy is the sick man of Europe,” as Marc Lazar, a political-science professor at Sciences Po in Paris and Luiss University in Rome, put it to me.
The problem for Europe, and for the world, is that Italy’s illnesses could be contagious. Much like the coronavirus itself, no domestic response will be truly sufficient on its own to address what is ailing the country. The virus has exposed a distinct lack of international cooperation and coordination, and that, too, contributes to why Italy is at risk. The tensions run both ways: Not only do Italy’s own struggles bode poorly for Europe, but the EU’s political dysfunction increases the challenges for the country. The early signs for Italy are not good.
Up until now, Italy has managed the COVID-19 crisis as well as it could. During the lockdown, fear of death led to strong social cohesion and faith in institutions. The collapse of the tourism sector and other industries will have dire consequences, but the country has strong survival instincts. Ninety percent of Italian businesses have fewer than 90 employees, and Italy’s small and medium-size businesses, many of them family owned, are deft and flexible, the backbone of the country. Italy has a stronger social safety net certainly than the United States, as well as deep reserves of private savings. Italians—unlike French citizens—tend not to expect too much from the state and manage to find creative work-arounds without top-down solutions.
“Every time we thought that this country was dead, or in any case on the brink of catastrophe—such as after the Second World War, during the strikes of the 1970s, the years of left- and right-wing terrorism … the country has always demonstrated an incredible capacity for revival,” Lazar told me. “There’s an Italian genius, an inventiveness, an Italian creativity,” he said. “That’s what history teaches us.”
But now comes the harder part. The same qualities that make Italy so good at managing emergencies are what could hold it back.
For weeks, European leaders have been debating the size and composition of an EU-wide recovery fund, one that they have now agreed will total 750 billion euros, or $850 billion, deemed necessary to stave off a total economic collapse among the Continent’s weakest economies—Italy chief among them. The sum is enormous, but the details are crucial, opening the door to what is known as the mutualization of debt, effectively tying EU member states closer together by making them jointly issue loans.
Europe already stands accused of letting Italy down at its moment of greatest need—when hospitals were overwhelmed and Rome asked for supplies and aid, European nations initially looked the other way, before eventually offering support. That may have already been too late, coloring Italians’ views of their neighbors. With the bailout package, the EU was again divided. The Netherlands, Austria, Denmark, Sweden, and Finland had been wary of endorsing the plan out of a historic reluctance to send money to what they see as the profligate countries of the South. (Never mind that Italy didn’t bring the virus upon itself, and that the countries in the euro zone are deeply interconnected.)
Within Italy, too, there is intense political debate about the funds. The country’s coalition government is supportive of the plan, but the right-wing opposition League party has been critical, saying the support would come with too many strings attached.
Yet beyond the political squabbles, whether in Rome or other European capitals, lies a greater challenge: To make effective use of the EU funds, Italy needs political vision, something it has singularly lacked for decades. Following the introduction of the euro in 2002, Silvio Berlusconi dominated the political landscape. The former prime minister’s cult of personality and sex scandals took center stage, rivals were united only in opposition to him, and Italy lost years to mismanagement of its economy. Berlusconi left power at the height of the European debt crisis, in 2011, but the country’s economy never fully recovered.
The EU plan recommends that countries spend the funding on long-term investments like green technology and digital infrastructure, areas in which Italy lags. This poses difficult questions. When does the present become the future? When you’ve rallied to put out a fire like the coronavirus, how do you begin to rebuild? “If the future isn’t the same as the past, how can we live if we only exist in the present, without planning, hope, or imagination?” the columnist Ezio Mauro recently wrote in La Repubblica, a center-left daily. A shrinking middle class and networks of local interest groups, Mauro continued, “can easily trap weak political leadership into placating them, rather than articulating a plan to transform the country.”
Italy’s largest political parties are more and more disconnected from the European mainstream, with none presenting a far-reaching vision of what a modern Italy could look like. The governing Five Star Movement, a contradictory collection of environmentalism and right- and left-wing policies, is the largest party in Parliament, but it trails in the polls. Its coalition partner, the center-left Democratic Party, has been treading water for years and, unlike other aging movements, such as those in France, lacks a Macron-like figure who can reinvent it. Neither is as popular as the League, led by Matteo Salvini, who has ridden a nationalist, anti-immigrant message and savvy use of social media to the top of the polls.
“I used to say that Italy was a great laboratory for political ideas, the ‘Silicon Valley’ of populism, and that there were lessons to learn from Italy that could spread,” Giuliano da Empoli, an erstwhile adviser to former Italian Prime Minister Matteo Renzi, told me. “Now it’s no longer a laboratory; it’s a loose cannon.”
To make matters worse, Italian support is declining not just for the EU, but possibly for democracy itself: A poll in La Repubblica in May found that 34 percent of Italians believed suspending democracy was acceptable in the face of a public-health crisis. With the pandemic, there’s an unpredictable element of free-floating anger that tends toward anti-political sentiment. In recent weeks, a new far-right group calling itself the “Orange Vests,” after France’s “yellow vest” anti-government protest movement, has taken to piazzas with a mix of anti-vax and anti-establishment anger. Meanwhile, a grassroots left-wing movement called the Sardines, which held large demonstrations across Italy in December and January, pushing back the right-wing populist tide, has largely faded away with the pandemic, even if the sentiments behind it have not.
All of this contributes to the “loose cannon” quality that da Empoli described. Lazar and others I spoke with see a worst-case scenario as a government collapse that brings Salvini to power. (Lazar said there wasn’t a best-case scenario, but the “less worse” one would be if Italy could manage the EU recovery funds with a government of national unity. “But it’s hard to see this happening,” he added.) A more likely scenario might be the slow diminishing of the government’s legitimacy, which some politicians would see “as an opportunity to reshuffle the cards,” Riccardo Alcaro, the research coordinator at the Istituto Affari Internazionali, a Rome-based think tank, told me. That would create a “new distribution of power, competencies, and posts”—that is, control over the ministries that would have control over distributing money. Political survival through favor trading.
Twenty years ago, Italy had five of the 20 richest cities in Europe in terms of GDP per capita; today it has only one, Milan. After the Second World War, Italy emerged from fascism and became a democracy, then a founding member of the euro. Today it remains both a pillar of the European project and a bellwether of lack of faith in the project.
A decade ago, when I lived in Rome, I watched Italy pull through the debt crisis thanks to a series of wildly unpopular technocratic and semi-technocratic governments, who introduced austerity measures that subsequent governments undid. Today, as the pandemic has pushed Italy into the biggest crisis since World War II, those with political vision don’t have political power, and those with political power lack vision.
And yet Italy’s problems don’t stop at the border. Giovanna De Maio, a visiting fellow at the Brookings Institution, summed it up. “If Italy fails,” she told me,“Europe fails.”