Eight Reasons Why Italy Is Such a Mess

From tax-dodging brides to heaps of trash in the streets, Italy's problems run deeper than the government's recent collapse.

BY URI FRIEDMAN | NOVEMBER 9, 2011

We're now in the throes of one of the most dangerous moments of Europe's two-year-old debt crisis. Thus far, Italian Prime Minister Silvio Berlusconi's pledge to resign has failed to convince markets that Italy can pass unpopular austerity measures and repay its whopping $2.6 trillion in government debt. And while this lack of confidence has sent Italy's borrowing rate soaring above a threshold -- 7 percent -- that compelled Greece, Ireland, and Portugal to seek international help, many analysts argue that the world's eighth-largest economy is simply too big for Europe to bail out in the event of a default.

In fact, Italy's problems run much deeper than a collapsed government and high borrowing costs, and range from heaping piles of trash in Naples to unsustainable birth rates. What follows is a tour of eight key issues that are plaguing the country behind the scenes.

Above, university students demonstrate in Palermo in Nov. 2010 aganst proposed budget cuts to the education system. The sign in the middle reads, "If you block your future, we'll paralyze the city."

Marcello Paternostro/AFP/Getty Images

 SUBJECTS: EUROPE
 

Uri Friedman is an associate editor at Foreign Policy.

TIM RODRIGUEZ

9:25 PM ET

November 9, 2011

Sad

Beautiful country, delicious gelato, bad economic policies. Sad.

 

A11242408

4:23 AM ET

November 15, 2011

Familias were not nuclear or

Familias were not nuclear or even strictly kin based but were organized from the grand patron/patriarch (who could be quite young) outward to many loyal citizens. Monastic and church establishments were also attached to one or another familia. SWF Converter Mac

 

NICOLAS19

5:46 AM ET

November 10, 2011

some depth, perhaps?

The article raises some valid points, but sometimes it is just plain ridiculous. Illustrating the economic woes with worldwide problems of tax evasion and garbage disposal. Doesn't China have the same problems - yet they are thriving. Doesn't the US have the same problems? Reminder: an whole landmass of garbage in the Pacific, together with the institutionalized tax evasion for the rich called the "Bush tax cuts". Yet all you read about in American media is other countries' "inability to get their sh*t together". If you want failure, look at your own president.

 

VALICORE

8:24 AM ET

November 11, 2011

Plenty critical

Americans are actually pretty darn critical of their own system and their own politicians. NOTHING on the scale of the garbage collection strikes has happened to any American city. The closest are New Orleans post Katrina and Detroit. In both cases there was some other exceptional event that precipitated what happened. In Italy it was manipulation by the mafie, the camorra was hugely responsible for the absolute disaster that Naples turned into, and the government of Naples might as well be an official arm of the camorra. Tax evasion is different in Italy as well because it's almost universally seen as something totally acceptable, like there's nothing wrong with it, same attitude as in Greece except they were even worse.

 

10JACOBF

3:21 PM ET

November 10, 2011

Declinometer for Italia?

So if FP thinks that America has it this bad then maybe it's time that someone needed to make a Decline Watch for Italy too.

 

ITONLYSTANDSTOREASON

3:57 PM ET

November 10, 2011

Individualism?

If I were to sum up the theme of these apparently disparate problems, it seems to be a high value on taking what you can get and to heck with the community or the country; no sense of shared destiny or responsibility. Sort of Republicanism with a welfare state - not a good combination.

And contradictions - low birth rates, an aging population, but not enough jobs for the young? If this picture is true, there is no adjustment that would be sufficient to get Italy through the next 20 years - Italy needs revolution more than reform.

 

GKPALADIUM

6:19 PM ET

November 10, 2011

Facing this crisis

Great post, this fact is contrary information, that the world has seven billion people, while some countries are facing this crisis, other poor countries face a growing problem, hunger and disease caused by uncontrolled population.

 

A11242408

4:25 AM ET

November 15, 2011

Over regulation and delay in

Over regulation and delay in the construction business. To put up a simple fence around residential property requires a suryor and a geologist and can take months for approval. That's right, a geologist.YouTube Converter Mac

 

STARFALLGAMER

8:17 AM ET

November 11, 2011

Italy

This is very alarming for countries in Europe. Hope they will resolve the problem as soon as possible. starfall

 

DELMONTE01

5:20 AM ET

November 13, 2011

Can't see it...

The debt black hole is so deep it's impossible to get out of and the only solutions being put forward are more debt and printing money out of fin air. If anyone thinks those are the solutions they really need there heads examining. It's totally insane.

Vince Delmonte

 

CITIZENWHY

11:50 AM ET

November 11, 2011

City-State vs Latifundia

The way Italy was governed in ancient Roman and pre-modern times is the key to understanding Italy, its strengths and its problems.

Southern Italy was made up of vast slave plantations called latifundia. Local good self-governance was never nurtured. Subsequent conquerers and rulers keep the peasants and city-dwellers in subservience, with organized crime as the most effective form of local self-governance.

Northern Italy was governed by orderly city-states with good civic life and practices. Due to the corruption of the capital in Rome these city states learned to govern themselves with a great deal of autonomy from Rome (but paying heavy tribute and needing the Imperial Army to protect them). Yes, the cities were oligarchies but every citizen was attached to one or another of the oligarchic famiiias. Familias were not nuclear or even strictly kin based but were organized from the grand patron/patriarch (who could be quite young) outward to many loyal citizens. Monastic and church establishments were also attached to one or another familia. Despite rivalries everyone had civic duties which they took seriously.

Rome was made up of many poor free citizens and slaves and, as we know, degenerated into a blood-lust culture. Later Papal rule and misrule destroyed the development of good citizenship.

Too much of Roman history focuses on the central government. We would be better served to study how well governed were the city-states of northern Italy, France and Spain.

Culture makes a difference in how a country is ruled. As we are seeing in the current ungovernability of the US (except as a military empire).

 

WICKBAM

4:51 PM ET

November 11, 2011

can't agree 100%

For one thing, the empire was so vast, there was hardly a common culture among the majority of the people. True, the upper classes were remarkably homogeneous throughout the empire, even across the Greco-Latin divide (the Greek man of letters Libanius regularly corresponded with an Aquitanian official, Rufinus, even though they both required translators to communicate) but the vast majority of the population were illiterate peasants who clung to local folk traditions.

The civic obligations were increasingly seen as a burden, since they imposed financial hardships. The later emperors increasingly had to "draft" upper class citizens to take leadership rules in urban affairs. The church was a drag in the sense that it skimmed off the educated and morally self conscious away from civic leadership where they were needed.

As for the common urban population, there was a strong sense of civic pride to one's own locale, and a fierce rivalry with neighbors (which emerged in attempts to divert grain shipments from one city to another or petition emperors to grant them tax privileges over their neighbors). Unike with the upper classes, there was no sense of patriotism in the modern among the common people in the cities, who were again a very diverse group. There was a sense of loyalty to the person on the emperor, who by the later empire was seen as a superhuman figure.

Not sure what this has to do with the United States. Given that it is a large country with a large, diverse population, it is not especially badly governed compared to Russia, India, or even China. It has its ups and downs of course.

 

CITIZENWHY

6:26 PM ET

November 11, 2011

France, Italy, Spain only

Thee populations of France, Spain and northern Italy (not Rome) were not all that diverse. And if you research the Roman cities in that region you will find that they used taxes to fund libraries, schools, and the manumission of slaves as well as roads, theaters and aquaducts. I was not talking about the Roman Empire as a whole, and certainly not the eastern part of the Empire. My remarks were confined to Italy, France and Spain.

 

RICHARD CARDULLA

2:40 PM ET

November 11, 2011

Italy

Nice collection of data, but you are dead wrong on why italy is in decline.
1. An over staffed buracracy that will litigate over meaningless detail with any person or company that needs their approval.
2. A civil court system in which a normal court case will take ten years or more to resolve, in which the judges in each case will certaunly change. Judges are rotated every 5 years. Since there are so many cases, the litigating parties and wittnesses never give testimony before the judge, but their testimony is recorded in long hand written statements prepared by both parties attorneys. A civil judge is expected to read these statements and then decide the case. If the judge worked 24 hours a day, 7 days a week, he could not read 10% of these statements. Hence, no certainty of a fair decision. Would you like to do business in this legal enviroment, were it may take ten (10) years to collect a bill, and then with no certainty of outcome?
3.Over regulation and delay in the construction business. To put up a simple fence around residential property requires a suryor and a geologist and can take months for approval. That's right, a geologist.
4. A complicated and incredable long period of time for local regulations to be passed. They are always complex and incomplet leading to much delay and litigation.
5. An over zelious penal procecution system that will procecute any offence, no matter how small or irrelivant to the limit, while at the same time clogging the court system whereby serious crime goes unpunished because of the statue of limitation. A penal trial, no matter how small will take up to four years to be heard. Wittnesses will be called and will be heard over a period of years, with one wittness testifying one day and the next appearing 6 months later to testify, until all are heard.
There's more ,but this will do for a start..

 

KUSOKANSON

12:38 AM ET

November 14, 2011

nice information

Italy has great resources and capacity. Delays today can be fixed with ease.
oyun

 

SNICKIES5

4:27 PM ET

November 12, 2011

Italy

Sadly, the future of Italy looks so bleak with no resources or money to invest in job creation. With 30% unemployment rate among youth (50% i am sure in some areas) , what will happen to the youth years down the road when they are still jobles?. Joblessnes and unemployment is dangerous for the well-being of an individual, the economy, as well as the culture. The government and the private sector must come up with a comprehensive strategy to employ more people. If not, the government will have to provide for 30% of the population down the road.

 

A11242408

4:22 AM ET

November 15, 2011

Due to the corruption of the

Due to the corruption of the capital in Rome these city states learned to govern themselves with a great deal of autonomy from Rome (but paying heavy tribute and needing the Imperial Army to protect them). Yes, the cities were oligarchies but every citizen was attached to one or another of the oligarchic famiiias.YouTube Converter Mac

 

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November 13, 2011

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INKA987

1:52 AM ET

November 15, 2011

As an ex-studend

As an x-labor law student near Palermo I can't agree more.
I was a part of exchanging from around the world.
I can't forget the loose working hours of the business there.

 

B.N_NG

5:01 AM ET

November 15, 2011

An example

Im from singapore. I ordered a sofa here which needed to be made in Italy as it was customised (non-standard cover) in June and it will only arrive here in January next year. Italian inefficiency at a low level.

 

LAVORO

10:12 AM ET

November 17, 2011

Italy has a very good Economy

I think the problem of Italy is represented by its politicians, rather than to serve the interests of the country, and think only of their families are no longer able to live and ask for loans to keep going.prestiti veloci

 

LOANS

11:35 AM ET

November 17, 2011

the evil of Italy are its political

I have Italian friends that keep me informed on the truth of the news and my internal state that Italy is in this situation because for about thirty years politicians have only their own business, corruption, illicit funds, and so on. The families are really in need I add that the loans are rising sharply protested (prestiti a protestati), because there are more and more workers without a job, we hope that this new government to do better than others.

 

CHANGS

6:39 PM ET

December 2, 2011

Revnues must equal expenditures

In every economy revenues must match or exceed expenditures. Unfortunately in most countries, the politicians are more than willing to pass laws requiring expenditures but are unwilling to raise the taxes to support those expenditures.

The United States is a prime example of this. One of the first things the Bush administration did was lower taxes on their wealthy friends and large corporations. The second thing they did was go on an unpaid spending spree.

It was totally stupid to go to war in Iraq using borrowed dollars to pay for the war. It you want a war, at least have the guts to raise the taxes to pay for the war instead of borrowing the money to pay for the war.

Now the United States is in a mess as a result of these huge expenditures of the last eleven years that were paid for with borrow dollars. Corporations and wealthy individuals have made out like bandits over the last eleven years while the country is slowly heading for bankruptcy.

These problems will not go away until countries and politicians learn that expenditures must balance with income or spending must be paid for with higher taxes.gasrange

ChangS

 

THOMASMAYS

4:31 PM ET

December 4, 2011

Some valid points - about 75% I would agree

When it comes to common urban population, there is a powerful feeling of civic pride to your own locale, along with a fierce rivalry with neighbors (which emerged in tries to divert grain shipments in one city to a different or petition emperors to grant them tax privileges over their neighbors). Unike using the upper classes, there is no feeling of patriotism nowadays in this one of the common people within the cities, who have been again a really diverse group. There is a feeling of loyalty towards the person around the emperor, who through the later empire was seen as an superhuman figure.

 

STEVEY0178

7:40 PM ET

December 8, 2011

Autumn in Italy

Italy is such a wonderful country that has so much to offer but it's corrupted from the root and poorly managed in recent years.