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Italian report Italian report
by Euro Reporter
2014-05-25 10:58:58
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Five stars back

It the insults that are hurled at a politician gauge the fear that he inspires in his adversaries, Beppe Grillo, the ex-comedian and co-founder of the Five Star Movement (M5S), must still be a grave threat. Martin Schulz, the Socialist president of the European Parliament, has likened him to Hitler. Silvio Berlusconi, leader of the conservative Forza Italia party, has said that Mr Grillo and his associate, Gianroberto Casaleggio, remind him of Robespierre, Stalin and Pol Pot. Since M5S burst into the Italian parliament last year with a quarter of the vote, it has repeatedly been written off as a protest movement past its peak. Fourteen of its 54 senators and five of its 108 deputies have quit or been expelled (mainly because of objections to Mr Grillo’s autocratic leadership or his refusal to co-operate with other parties). But the European election offers Italians a risk-free chance to register disgruntlement. They have much to be disgruntled about. The economy, which seemed to be recovering from recession, shrank again in the first quarter. Youth unemployment is over 40%. And a seemingly endless stream of politicians are being led away in handcuffs.

he election now looks like a two-horse race between the M5S and the left-leaning Democratic Party (PD) of the prime minister, Matteo Renzi. Before a ban on poll publication two weeks before the vote, the M5S had almost reached 25%, closing in on the PD, which was around 33%. But Forza Italia was in decline, below 20%. Mr Berlusconi has had a rotten campaign. On May 8th police arrested Claudio Scajola, for 13 years the organisational head of his party. Mr Scajola denies helping a former Forza Italia lawmaker convicted of links with the ’Ndrangheta, the Calabria mafia, to escape abroad. On May 9th the Supreme Court threw out a final appeal by Forza Italia’s co-founder, Marcello Dell’Utri, against a seven-year prison sentence for collaborating with the Sicilian mafia (Mr Dell’Utri is in Lebanon awaiting extradition proceedings). The same day, Mr Berlusconi began his community service at a clinic near Milan after his conviction for tax fraud. The billionaire’s campaign has lacked its usual sparkle: at 77, he has looked and sounded tired.

Perhaps sensing Mr Berlusconi’s vulnerability, Mr Grillo has reversed his refusal to go on television shows, in what appears to be a drive for centre-right votes. Support for his party has so far been built largely on the internet, which is eschewed by many older, more conservative Italians. On May 19th the former comedian was the guest of a presenter whom he had previously reviled. He tried to persuade viewers that his campaign rants were not evidence of tyrannical instincts, but of the rage that he shared with many of them. Some will remain unconvinced: Mr Grillo still talks of holding trials for politicians and journalists (on the web) if the M5S comes to power. Senator Luis Alberto Orellana, who left the M5S in February, thinks Mr Grillo’s harangues deter potential M5S voters. But he concedes that “others appreciate the simplicity of his message”. A poll has found that the M5S is the most popular choice for Italians below the age of 44. How close Mr Grillo runs the 39-year-old Mr Renzi will be crucial for Italy’s future. The prime minister is no mean showman himself. One reason why the PD’s kingmakers accepted him as leader was a hope that he could see off Mr Grillo, whose success last year forced the mainstream parties into an uncomfortable left-right alliance. A strong M5S showing would undermine both Mr Renzi and his reform agenda, which has been well received by financial markets. A victory for Mr Grillo and his party might even doom both.

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Italy struggles to turn page on corruption

They usually met in Milan although on Wednesdays they lunched in Rome. But for the seven men arrested on suspicion of corruption, the menu was always the same, prosecutors said: alleged bribes to obtain building contracts for Italy's Expo 2015 world fair. Milan prosecutors are investigating whether the group of former politicians and entrepreneurs rigged contracts for Expo and other public tenders, including a 67 million euro contract to build facilities for next year's Universal Exhibition, according to a copy of the arrest warrant seen by Reuters. Details of the case, revealed in the prosecutors' warrant, have reminded Italians of the 1990s, when a wave of high-profile bribery cases landed top businessmen and politicians in jail and broke-up Italy's post-war party system. Two decades later, despite promises from the new prime minister, Matteo Renzi, that he will invigorate the economy, business is still often murky, with some of Italy's most prominent companies under investigation. Corruption still exists in Italy, lawyers and prosecutors say, because many of the old offenders are still around - in some cases well past the normal retirement age - and Italian society typically takes a forgiving attitude to their crimes.

Despite repeated attempts to clean up politics and business, Italy still ranks 69 out of 177 countries in Transparency International's corruption index, below most European nations. Two of the people under investigation in the Expo case - 74-year-old Gianstefano Frigerio, a former local leader of Italy's Christian Democrats, and Primo Greganti, 70, former member of the defunct Communist Party - served jail time in the early 1990s after being convicted for corruption and illicit political party financing. They both denied wrongdoing in the Expo case when questioned by prosecutors, according to people close to the investigation. Frigerio had no comment, his lawyer said, while Greganti's lawyer said his client denied any wrongdoing. "In Italy corruption is above all a cultural problem," says Raffaele Cantone, a magistrate who heads Italy's anti-bribery authority and who was put in charge of the Expo 2015 organization after the recent arrests. "Those who have been involved in corruption cases, once they have served their sentence, are welcomed back with open arms by the business world, politicians, by the entire society."

Cantone says the Expo case shows how corruption in Italy has evolved over the past 25 years. In the case of the so-called "Clean Hands" trials of the early 1990s, political parties were the centre of kickback schemes linked to public works contracts. "Today politics has a secondary role. The real novelty is that we see a web of business intermediaries that want to get their hands on the bribe money. We still have political parties, of course, but they are a means rather than an end," says Cantone, who is famous in Italy for his investigations against the Naples-based organized crime group, the Camorra. Among cases currently winding through Italian courts is an investigation into possible kickbacks for contracts to rebuild the city of L'Aquila, hit by an earthquake in 2009. Prosecutors are also investigating defence giant Finmeccanica and oil services group Saipem for alleged corruption linked to international contracts. Both companies deny any wrongdoing.

The Expo arrests are a political problem for Renzi, who was forced to hurry to Milan last week to renew his commitment to the international fair. He acknowledged the Expo investigation would hurt his party and help the anti-establishment Five-Star Movement in European elections this weekend. Five Star's leader, Beppe Grillo, says the fair is a source of criminal activity. But Renzi said Expo would go ahead despite the investigation. "We need to stop the thieves, not Expo," Renzi said during his visit.

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Drug trafficking, prostitution revenue set to boost Italy's GDP result

Italy has announced it will start including estimated revenues from prostitution and illegal drug sales in official gross domestic product (GDP) figures. The country's National Institute of Statistics says starting next year, the GDP result will also include estimates on the value of the black market in cigarettes and alcohol. The move has been driven by new European Union rules requiring nations to include all activities that produce income in their national accounts, regardless of their legality.

The institute says the procedure would be it will be "very difficult for the obvious reason that these illegal activities are not reported". The Bank of Italy in 2012 estimated the value of the criminal economy at 10.9 per cent of GDP. Theoretically, that could mean Italy's GDP result with the new calculation will come in far higher than the government's 1.3 per cent growth estimate.

Eurostat earlier estimated the average GDP increase for EU nations due to the new calculation to be at 2.4 per cent. The highest rises were estimated for Finland and Sweden at 4 to 5 per cent, followed by Austria, Britain and the Netherlands at 3 to 4 per cent. The increase for Italy would be around 1 to 2 per cent.

 


         
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