Italy's knife-edge election results are a symptom of this age of stalemate

By Jonathan Freedland (THE GUARDIAN, 12/04/06):

If there's one global industry that needs restructuring, it's surely the exit-polling business. On Monday afternoon, the first projections put Romano Prodi on course for a comfortable win over Silvio Berlusconi; as day turned into night, that victory margin shrank into a wafer, as a tenth of a percentage point separated the two men. A fortnight earlier, exit polls had Israel's Kadima party bagging 33 seats, a figure that fell to 28 by the morning. And let's not forget November 2 2004, the night the polling gurus anointed President John Kerry.

So Italians woke up to a hazy, uncertain result with none of the clarity promised the night before. Still, for progressive Italians that was a mere smear on the champagne glass; there was something to celebrate - the anticipated exit of Silvio Berlusconi. "It had been so humiliating to see him on television, acting like a Latin American dictator," said Pietro Corsi, the editor of the Italian edition of the New York Review of Books.

He, like many others, had come to despise everything the outgoing prime minister represented. They loathed his alliance with racists and former fascists; his cronyism and coarseness, branding his opponents "dickheads" and "testicles"; his rampant egotism, from the cosmetic surgery and hair treatment to the comparisons of himself to Napoleon and Jesus. But there were two graver objections. The first was his loyalty to the most rightwing US administration in living memory, following the White House into an unpopular war.

Second was his embodiment of a culture of corruption, his cavalier contempt for the rule of law captured best by his repeated attempts to rewrite the rules to protect himself from prosecution. The very idea of a media magnate who owns 90% of the television airwaves, Italy's richest man, serving as head of government was, in itself, a corrosion of public life. His departure, if that's what it is, instantly makes the Italian civic realm a cleaner place.

For many the election was a referendum on Berlusconi, its central issue entirely peculiar to Italy. Even so, it fits at least two larger patterns. First, the Italians now become the latest mature democracy to be revealed as a 50-50 nation. The US led the way with the Florida dead heat of 2000, while the 2004 election turned on just 60,000 Ohio votes. Last autumn, Germans produced their own photo-finish, and now an Italian result separates left and right by just 25,000 votes.

This could be an arithmetical quirk, or it could suggest that these societies are indeed split down the middle. The cultural gulfs that separate red-state and blue-state America are well-known, but Italy is hardly less polarised. North and south, religious and secular, rich and poor, left and right - all those divides are deep and historically entrenched in Italy. This is a place where Catholics still wrestle with communists for the soul of the nation, where some in the affluent north believe they have more in common with southern Germans than they do with those Italians they brand Marocchini - "Moroccans" - in Sicily and the Italian south.

The more pressing trend is the paralysis that seems to be gripping continental Europe's three biggest nations. In Germany, France and Italy the political class (spurred on by business) has become convinced that a specific remedy is urgently required to treat their ailing economies. They must, the elites long ago concluded, submit themselves to radical restructuring, deregulating their industries, liberalising their labour markets. There are a variety of names for the medicine - Thatcherism, Blairism, neoliberalism, the Anglo-Saxon model - but the masters in Paris, Berlin and Rome are in no doubt that it must be administered if these three arthritic European lions are not to be mauled to death in the globalised jungle by India and China.

The trouble is, citizens of the European troika refuse to submit to the treatment. Either they fail to endorse it at the polls, as they did in Germany by converting Angela Merkel's initial lead into the narrowest of victories over Gerhard Schröder. Or they take to the streets, as they just have in France, forcing Dominique de Villepin to drop his relatively modest plan to make France's under-26s more sackable and therefore more attractive to employers. Either way, they will not allow their leaders to impose the Thatcherite reforms the leaders say are essential.

But, confusingly, these voters do not rally to a clear left alternative either - partly because of the failure of progressives around the world to articulate one. They know what they're against, but they are yet to gather round a programme they're for. The result is a stagnant stalemate, repeatedly reflected at the ballot box. Italy is a case in point. That there is a problem few deny. Economic growth last year was zero; the country's public debt is larger than its gross domestic product - Italy spent £45bn a year on interest payments alone. Berlusconi, who promised to perform for Italy the same money-making miracle he had staged for himself, presided over a decline in almost every indicator that matters, from productivity to competitiveness.

The long-term outlook is even worse. Italy's big industries are textiles, shoes and furniture, areas in which China and India can easily win out on price. The country has an ageing, declining population: the birth rate is falling and 28% of Italians are pensioners, living longer but with fewer workers to pay for their retirement. Everyone knows that something has to change if the country is not going to spend the 21st century sinking.

Yet the electorate was not presented with a clear course of action. On the one hand, the neoliberal case was not argued directly. The arch free-marketeer Berlusconi promised an increase in the state pension and greater social protection, not less. Meanwhile, it was the social democrat Prodi who called for a cut in the amount employers pay towards the social security of their workers. Each was trying to wear the clothes of the other. That's partly because both men had large coalitions to hold together. But it was also because the Italian right did not dare offer an unvarnished Thatcherite programme, fearing the electorate would reject it. So the parties hedged their bets - and the voters did, too.

But if the right failed to offer a clear programme, so did the left. It did not have a distinct vision of its own, one that might counter the neoliberal ideology of privatisations and liberalisations. That's hardly Italy's fault: the left worldwide, its confidence wrecked since 1989, lacks a coherent view of political economy, a proposed system it might put to voters. "Too often the alternative to neoliberalism is just conservatism, like those French students who want to keep the world the way it was," says Charles Grant, director of the Centre for European Reform.

So we know from Germany, France and now Italy that the Thatcherite answer to globalisation is feared by voters - but they have nothing to vote for as an alternative. And you don't need an exit poll to tell you, the age of stalemate will continue until they have.