An Entire Order Converted into What It Was Intended to End

In 1992-94 Italy was widely held to have been reborn. The parties that had long ruled – latterly misruled – the country were all but wiped out, after their corruption had been exposed by a fearless group of magistrates, in an election under a new and, so it was felt, more functional system, even if the government that emerged from the polls was a surprise to many who celebrated the end of the old regime. The country could now make a fresh start, in its way comparable to that of 1945. Today the Second Republic, as it has come to be called, is 15 years old, equivalent to the span of time stretching from Liberation to the arrival of the centre-left in the First Republic. An era has elapsed. What is there to show for it? For its promoters, who commanded an overwhelming consensus in the media and public opinion in the early 1990s, Italy required a comprehensive political reconstruction, to give the country government worthy of a contemporary Western society. Probity, stability, bipolarity were the watchwords. Public life was to be cleansed of the corruptions of the old order. Cabinets were not to fall every few months. Alternation of two moderate parties – or at worst, coalitions – in office, one inclining to the right and the other to the left, would be the norm. Once the political system was overhauled along these lines, the reforms needed to modernise Italian society, bringing it up to standards taken for granted elsewhere in the Atlantic community, could at long last be enacted.

A decade after the earthquake of Operation Clean Hands, the balance sheet of the new republic was, for its champions, a mixed one – frustrating in many ways, but not definitively disappointing. On the positive side, the political landscape had been transformed, with the extinction of all the parties that had populated the First Republic and the distribution of their successors into two competing blocs seesawing in office. A great economic change had followed with Italy’s entry into the Eurozone, barring henceforward the country’s traditional primrose path of devaluation, inflation and mounting public debt. On the negative side, two developments were disturbing. The first, decried across the board by polite opinion, was the failure of the electoral reform of 1993 to purge the political system of lesser parties, of more radical persuasion, on the flanks of the competing coalitions now ranged against each other, and capable of extracting concessions from these in return for their support. The work of the new republic would not be complete until such blackmail – the term invariably used – was eliminated.

The second cause for concern was, in the nature of things, less universally pressed. But the prominence of Berlusconi, as the most spectacular newcomer on the political scene, aroused anxieties that were not confined to those most averse to him. Not only was he deeply implicated in the corruption of the last phase of the First Republic, but as a media magnate turned politician he embodied a conflict of interests felt to be intolerable in other democracies, controlling at once a private empire and public power, each at the service of the other. Fears were repeatedly expressed that here could be the makings of an authoritarian system of rule distinct from, but genetically related to, the nation’s previous experience of plebiscitary power. Still, in the opening years of the Second Republic, these remained more notional than actual, since between 1994 and 2001 Berlusconi was only in office for seven months.

When, in the spring of 2001, he finally won a full term of office, warnings were widespread on the left of the danger not only of a semi-dictatorial development, but of a harsh regime of social reaction, an Italian version of the radical right. The reality, however, proved otherwise. The social and economic record of the Berlusconi government was anodyne. There was no significant attack on the welfare state. Social expenditure was not cut, pensions were raised, and employment increased. Measures to loosen the labour market and raise the legal retirement age remained ginger, and tax cuts were less significant than in social democratic Germany. Privatisations, abundant under the centre-left coalition of 1996 to 2001, led before his departure for Brussels by Romano Prodi, when Italy held the European record for selling off public assets, were minimal. The main advantage of the regime for the rich lay in the amnesties it granted for illegal stacking of wealth abroad, and flouting of building controls at home. Ostensibly tougher legislation on immigration was passed, but to little practical effect. Externally, Berlusconi joined Blair and Aznar in sending troops to Iraq, a contribution to the American occupation that the centre-left did not oppose. A package of constitutional reforms giving a more federal shape to the state, with greater powers for the regions – the top priority for the Northern League headed by Umberto Bossi – was pushed through parliament, but came to nothing in a subsequent referendum. No great drive or application was displayed by Berlusconi in any of this.

The principal energies of his government lay, starkly, elsewhere. Berlusconi’s overriding concern was to protect himself from prosecution, amid the thicket of cases pending against him for different kinds of corruption. At top speed, three successive laws were rammed through parliament: to block evidence of illegal transactions abroad, to decriminalise the falsification of accounts, and to enable defendants in a trial to change judges by shifting the case to another jurisdiction. When the first and third of these were voided as unconstitutional by the courts, Berlusconi reacted with a fourth, more drastic law, designed to wipe the board clean of any possibility of charges against him by granting himself immunity from prosecution as premier, along with the president, the speakers of the two chambers and the head of the Constitutional Court as four fig-leaves. Amid widespread uproar, this too was challenged by magistrates in Milan, where the major trials in which he was implicated were under way, and was ruled unconstitutional six months later. But the barrage of ad personam laws, patently the government’s most urgent agenda, had immediate, if not yet definitive effect. No sooner was Berlusconi in office than he was absolved by an appeals court of bribing judges to acquire the Mondadori publishing conglomerate – not for want of evidence, but for ‘extenuating circumstances’, defined in a memorable précis of Italian justice as ‘the prominence of the defendant’s current social and individual condition, judged by the court to be decisive’. Before formal immunity against prosecution was struck down, it had closed another leading case against Berlusconi, and when the case was reopened, a new court delivered the requisite judgment, absolving him.

After protecting his person, came protecting his empire. By law Mediaset was due to relinquish one of its TV channels in 2003. Legislation was quickly rushed through to allow it not only to retain the channel, but to enjoy a massive indirect subsidy for its entry into digital television. Since Berlusconi now commanded his own private stations and controlled state broadcasting as well, his dominance of the visual media came close to saturation. But it failed to deliver any stable sway over public opinion. By 2005, when he was forced to reshuffle his cabinet, the popularity of the government had plummeted. In part, this was due to the unseemly spectacle of the ad personam laws, denounced not only in the streets but by most of the press. More fundamentally, it was a reaction to the economic stagnation of the country, where average incomes had grown at a mere 1 per cent a year since 2001, the lowest figure anywhere in the EU.

Watching its ratings drop precipitously in the polls, the ruling coalition abruptly altered the electoral system, abandoning its predominantly first-past-the-post component for a return to proportional representation, but with a heavily disproportionate premium – 55 per cent of seats in the Chamber of Deputies – for the coalition winning most votes, and a threshold of 4 per cent for any party running on its own. Designed to weaken the opposition by exploiting its division into a larger number of parties than the bloc in power, the new rules played their part in the outcome of the general election held in April 2006. Contrary to expectations, the centre-left won only by a whisker – 25,000 votes out of 38 million cast for the Chamber of Deputies – while actually scoring fewer votes than the centre-right for the Senate. On a difference of less than 0.1 per cent of the popular vote, the premium handed it a majority of no fewer than 67 seats in the Chamber, but in the Senate it could count on a precarious majority of two only because of the anomaly – newly introduced – of overseas constituencies. Having believed it would win a comfortable victory, the centre-left was shocked by the result, which came as a psychological defeat. Prodi, back from Brussels, was again premier. But this time he presided over a government mathematically, and morally, much weaker than before.

Not only did centre-left rule now hang by a thread: it lacked any organising purpose. In the 1990s, Prodi had had one central goal: Italy’s entry into the European Monetary Union, whose pursuit gave his tenure a political focus. His new administration – which, unlike its predecessor, included Rifondazione Comunista, widely regarded as a formation of the extreme left, as an integral part of its coalition – had no equivalent coherence. At the Finance Ministry, Tommaso Padoa-Schioppa, one of the original architects of the European single currency, gave priority to reducing the public debt – which had crept up a few points under Berlusconi – and cracking down on tax evasion, to some (although officially exaggerated) effect. A scattering of minor measures of liberalisation, designed to make life easier for consumers in chemists, taxis and the like, was soon dissipated. Gestures, but no more, were made towards a 35-hour week, as a placebo to keep Rifondazione quiet while the centre-left pursued a foreign policy of undeviating Atlanticism. Prodi’s government reinforced the Italian contingent in Afghanistan; withdrew troops from Iraq very gradually, according to Berlusconi’s own plan for doing so; approved an expansion of the American airforce base at Vicenza that had been a launching-pad for the Balkan War; dispatched forces to Lebanon as a glacis for Israel; and retroactively covered up kidnapping and rendition by the CIA from Italian soil.

None of this did anything for the popularity of Prodi or his ministers. Increased fiscal pressure angered the traditional tax-evading constituencies of the right. The lack of any significant social reforms disappointed voters of the left. Most disastrously, no attempt was made either to deal with Berlusconi’s conflict of interests, or to introduce better standards of justice. Instead, a sweeping amnesty was declared, in theory to clear the hopelessly overcrowded prisons, but in practice releasing not only common felons, but every kind of notable convicted of corruption. This indulto, proclaimed by the notorious Clemente Mastella (the shadiest politician in the coalition, a former Christian Democrat from Campania who had been made minister of justice to keep his tiny party in the coalition’s ranks), provoked widespread outrage. By 2007, with Prodi’s own standing in free-fall, the leadership of the DS – the Democrats of the Left into which the bulk of Italian Communism had evolved – decided that its mutation into a Democratic Party pure and simple, dropping any association with the left and absorbing assorted Catholic and ex-Radical politicians grouped in the so-called ‘Daisy’ component of the coalition, could allow it to escape the sinking repute of the government, and elbow Prodi aside in public view. Massimo D’Alema, foreign minister in the government, was too damaged by his role in the final debacle of the previous Prodi administration to be a credible candidate to head the new formation, and its leadership fell to his long-time rival Walter Veltroni, the DS mayor of Rome, as a fresher choice. Privately, the two men despise each other – D’Alema regarding Veltroni as a fool, Veltroni D’Alema as a knave. But outwardly, together with a motley crew of devotees and transfuges, they joined forces to give birth to a new centrist party, to be cleansed of all connection with a compromised past. By the autumn, Veltroni was more or less openly positioning himself as the alternative to Prodi, who theoretically still had three more years in office – in effect repeating an operation mounted at Prodi’s expense by D’Alema in late 1998.

This time, however, the ambitions were greater and talents lesser. Veltroni’s aim was not to replace Prodi at the head of the existing coalition, but to bank on early elections bringing him to power as chief of a party that would rival Berlusconi’s in novelty, breadth and popular support. But his limitations had long been apparent. Vaguely resembling a pudgier, bug-eyed variant of Woody Allen, Veltroni – an enthusiast for filmic dross and football; delighted to lend his voice to a Disney cartoon; author of opuscules like ‘Thirty-Eight Declarations of Love to the Most Beautiful Game in the World’ – had the advantage of appearing more sincere than D’Alema, more spontaneously conformist, but possessed little of his sharpness of mind.

In November 2007, the centre-right bloc was in danger of falling apart, when Berlusconi – frustrated by failures to topple the Prodi government in parliament – suddenly folded Forza Italia into a new organisation, Popolo della Libertà, demanding that his allies, other than the Northern League, join it as the single national party of freedom. Both Gianfranco Fini and Pier Ferdinando Casini, leaders of the former Fascist (AN) and Catholic (UDC) components of his coalition, rebelled. Instead of capitalising on their disaffection and splitting the centre-right, Veltroni eagerly offered himself to Berlusconi as a responsible partner in the task of simplifying Italian politics into two great parties of moderate opinion. What this meant was clear to all: once again, as in the mid-1990s, the attempt to strike a deal for a new electoral system designed to wipe out small parties, leaving the newly constructed PD and PdL in command of the political field. In the ranks of the opposition, this danger promptly brought Fini to heel, returning him to allegiance to Berlusconi and reviving the compact of the centre-right. In the ruling coalition, its effect was an even deadlier boomerang.

While negotiations between Veltroni and Berlusconi were proceeding in Rome, a long-gathering crisis was about to explode in the South. In late December, rubbish collectors stopped work in and around Naples, where all the dumps were full, leaving huge piles of rotting garbage accumulating in streets and neighbourhoods. Waste disposal in the region had long been a lucrative racket controlled by the Camorra, which shipped toxic refuse from the industrial North to illegal dumps in Campania. Both the region and the city of Naples had been fiefs of the centre-left for more than a decade – the governor (and former mayor) ex-PCI, the mayor ex-DC. Under this pair, Antonio Bassolino and Rosa Russo Jervolino (the first by far the more important), there had been much boasting of the outstanding work performed in the restoration of Naples to its original beauties, and the advent of a clean, progressive administration in Campania. In reality, notwithstanding municipal embellishments, corruption and gangsterism had flourished unchecked, and the Prodi government hadn’t been paying any attention to what was going on in its bailiwick. In January last year, the citizens of Naples finally rose up in furious protests against the mounds of putrescence visited on them. The damage to centre-left rule was immeasurable.

Two months later, its downfall combined, with peculiar local aptness, the outcomes of the tactical and moral blindness of the coalition. Within days of the outbreak of the garbage crisis in Naples, the wife of the minister of justice, Sandra Mastella, president of the Regional Council of Campania for the centre-left, was put under house arrest, charged with attempting to corrupt a local hospital trust for the benefit of her party, the UDEUR. Her husband resigned his ministry in protest, and was promptly reappointed by Prodi. But, his loyalty already weakened by failure to respect collegial omertà in Naples, Mastella could see the writing was on the wall for his party anyway, if Veltroni’s deal with Berlusconi went through. To block it, he switched sides, and his two senators in the upper chamber brought the government down. In a riotous scene, the centre-right benches exploded with jubilation, corks popping and champagne spraying along the red velvet seats of the hemicycle in the Palazzo Madama.

Paying the bill for his miscalculations, Veltroni now had to fight an election at short notice, without having had the time to establish his party, or himself, as the beacon of civilised dialogue in a too faction-ridden society. Rejecting any understanding with the three smaller parties to the left of it, the PD entered the lists alone to underline its mission to give Italy a modern government uncompromised by the participation of extremists – making an exception, at the last moment, for Italy of Values, the small party owing allegiance to the most pugnacious of the Clean Hands magistrates, Antonio di Pietro. Berlusconi, on the other hand, having integrated Fini’s forces into his new party, had no compunction in moving into battle with allies – above all, the League in the North, but also the minor regionalist Movement for Autonomy in the South. The campaign itself was universally judged the dullest of the Second Republic, centre-left and centre-right offering virtually identical socio-economic platforms, until at the last minute Berlusconi promised to lower property taxes. Otherwise, the two sides differed only in their respective rhetorics of morality (how to protect the family) and security (how to repress crime). So far did Veltroni go out of his way to shun any aspersions on Berlusconi that he even avoided mentioning him by name, instead speaking throughout respectfully just of ‘my adversary’. His audiences were not roused.

The magnitude of the ensuing disaster exceeded all expectations. The centre-right crushed the centre-left by a margin of 9.3 per cent, or some three and half million votes, giving it an overall majority of nearly 100 in the Chamber and 40 in the Senate. Gains within the victorious bloc were made, however, not by the newly minted PdL (into which Forza Italia and AN had merged), which actually ended up with 100,000 votes fewer than the two had secured in 2006. The big winner was the League, whose vote jumped by 1.5 million, accounting for virtually all the total increase in the score of the centre-right. The PD, presenting itself as the party of the progressive centre to which all well-disposed Italians could now rally, proved a complete flop. With just over 33 per cent of the vote, it mustered scarcely more support – on one reckoning, less – than its component parts in 2006. Indeed, even this score was reached only with the voto utile of about a fifth of the former voters of the parties of the left proper, which this time had combined into a rainbow alliance and been wiped out when it fell below the 4 per cent threshold, with a net loss of nearly 2.5 million votes. Overall, the value-added of the Democratic Party, created to reshape the political landscape by attracting voters away from the centre-right, turned out to be zero.

The shock of the election of 2008 has been compared to that of 1948, when the Christian Democrats – this was before opinion polls, so there was little advance warning – triumphed so decisively over the Communists and Socialists that they held power continuously for another 44 years. If no such durable hegemony is in sight for today’s centre-right, the condition of the centre-left, indeed the Italian left as a whole, is in most respects – morale, organisation, ideas, mass support – much worse than that of the PCI or PSI of sixty years ago: it would be more appropriate to speak of a Caporetto of the left. Central to the debacle has been the left’s displacement by the League among the Northern working class. The ability of parties of the right to win workers away from traditional allegiances on the left has become a widespread, if not unbroken pattern. First achieved by Thatcher in Britain, then by Reagan and Bush in America, and most recently by Sarkozy in France, only Germany, among the major Western societies, has so far resisted it. The League could, from this point of view, be regarded simply as the Italian instance of a general trend. But a number of features make it a more striking, special case.

The first, and most fundamental, is that it is not a party of the establishment, but an insurgent movement. There is nothing conservative about the League; its raison d’être is not order, but revolt. Its forte is raucous, hell-raising protest. Typically, movements of protest are short-winded – they come and go. The League, however, is now the oldest political party in Italy, indeed the only one that can look back on 30 years of activity. This is not an accident produced by the random workings of the break to the Second Republic. It reflects the second peculiarity of the League, its dynamism as a mass organisation, possessing cadres and militants that make it, in the words of Roberto Maroni, perhaps Bossi’s closest colleague, ‘the last Leninist party in Italy’. Over much of the North, it now functions somewhat as the PCI once did, as rueful Communist veterans often observe, with big gains in one formerly ‘red’ industrial stronghold after another: the Fiat works in Mirafiori, the big petrochemical plants in Porto Marghera, the famous proletarian suburb of Sesto San Giovanni outside Milan, setting in the 1950s of Visconti’s Rocco and His Brothers. This is not to say that it has become a party based on labour. While it has captured much of the working-class vote across the North, the League’s core strength lies, as it has always done, among the small manufacturers, shopkeepers and self-employed in what were once fortresses of the DC: the Catholic provinces of the North-East, now increasingly secularised, where hatred of taxes and of interference by the central state runs especially strong. Here resentment of fiscal transfers to the South, perceived as a swamp of parasitic ne’er-do-wells, powered the League’s take-off in the late 1980s. Immigration from the Balkans, Africa and Asia, which has quadrupled over the last decade, is now the more acute phobia, laced with racism and prejudice against Islam. The shift of emphasis has, as might be expected, been a contributory factor in the spread of the League’s influence into the Northern working class, more exposed to competition in the labour market than to sales taxes.

The truculence of the League’s style has been perhaps an even more important source of its popular success. Defiance of the sickly euphuism of conventional political discourse, as cultivated in Rome, confirms the League’s identity as an outsider to the system, close to the blunt language of ordinary people. The party’s leaders relish breaking taboos, in every direction. Its political incorrectness is not confined to xenophobia. In matters of foreign policy, it has repeatedly flouted the official consensus, opposing the Gulf War, the Balkan War and the Lisbon Treaty, and advocating tariffs to block cheap imports from China, without inhibition. Breaking verbal crockery, however, is one thing; effecting policy another. Since its period in the desert between 1996 and 2001, the League has never rebelled against the orthodox decisions of the centre-right governments to which it has belonged, its rhetorical provocations typically operating as symbolic compensation for practical accommodation. But it is not a dependency of Berlusconi. The boot is rather on the other foot: without the League, Berlusconi could never have won the elections in which he has prevailed, least of all in 2008. The broker of the alliance between the two, Giulio Tremonti, now again minister of finance, is not by accident both the author of a critique of unfettered globalisation sharper than anything Veltroni’s Democrats have dared to venture, and after Berlusconi himself, the most powerful figure in the present government.

If the League has been the principal nemesis of that part – the majority – of the PCI which made a pilgrimage from Communism to social liberalism without so much as a stopover at social democracy, the fate of the minority that sought to refound a democratic Communism has been largely self-inflicted. Instead of keeping clear of Prodi’s coalition in the elections of 2006, as it had done to good effect in 1996 – when a pact of mutual desistance had allowed it to enter parliament as an independent force in rough proportion to its electoral strength, and lend external, but not unconditional, support to the ensuing centre-left government – Rifondazione Comunista signed up as a full member. Its leader, Fausto Bertinotti, was rewarded with the post of speaker of the Chamber, nominally the third personage of the Italian state after the president and prime minister, and replete with official perquisites of every kind and automatic access to the media. This empty honour went, as hoped, to his head, ensuring that the RC became a docile appendage in the ruling coalition, unable to secure any substantive concessions from it, and inevitably sharing in the disrepute into which it fell. In keeping with this performance, the party voted in favour of war credits for Afghanistan not long after Bertinotti had explained that the great mistake of the left in the 20th century had been to believe that violence could ever be an instrument of progressive change – only its complete renunciation for an ‘absolute pacifism’ was now politically acceptable. Predictably, the combination of co-option and abjuration was suicidal. Facing the polls in a last minute cartel with Greens and the remnant of the DS that could not abide the dropping of even a nominal reference to the left in the PD, Rifondazione was annihilated. Voters in their millions abandoned a party that had scuttled its own identity.

The scale of his victory has given Berlusconi the leeway to pursue a tougher socio-economic agenda, of the kind long urged on him by mainstream critics and commentators inside and outside Italy. Where this will hit opposition constituencies, his coalition is ready to act: draconian cuts in higher education and compression of teaching staff in elementary schools, promptly enacted, strike at a relatively easy target of centre-left support, where institutional vices are widely acknowledged. Where its own electoral base is concerned, rigour is no more likely to be applied than in the past. The world economic crisis would in any case not encourage an intrepid neoliberalism, even were it contemplated. The immediate focus of the government has lain elsewhere. Back in power, Berlusconi has returned to the unfinished business of putting himself above the law. Within a hundred days of the election, parliament had rushed through another bill for his immunity from prosecution, redrafted by his lawyers to sidestep the grounds on which the Constitutional Court voided the previous one. This too has already been challenged in the courts; beyond them, a campaign to abrogate it by referendum is in waiting. The political life of the country once again turns on the personal fortune, in all senses, of its billionaire ruler.

Today Berlusconi is incontestably the icon of the Second Republic. His dominance symbolises everything it has come to stand for. Few secrets remain about the way in which he acquired his riches, and how he has used them to gain and preserve his power. The larger question is what, sociologically, made this career possible. An obvious answer would point to the unbroken sway of Christian Democracy in the First Republic, and see him essentially as its heir. The element of truth in such a reading is clear from the underlying electoral balance in the Second Republic. Proportionately, in all five elections since 1994, the total centre-right vote, excluding the League, has exceeded the total centre-left vote, excluding Rifondazione Comunista, by a margin varying between 5 and 10 per cent. Italy, in other words, has always been, and remains, at bottom an extremely conservative country. The reasons, it is widely argued, are not hard to seek. Fewer people move away from their areas of birth, more adult children live with their parents, average firms are much smaller, and the number of self-employed is far higher, than in any other Western society. Such are the cells of reaction out of which a body politic congenitally averse to risk or change has been composed. The sway of the Church, as the only institution at once national and universal, and the fear of a large home-grown Communism, clinched the hegemony of Christian Democracy over it, and even if each has declined, their residues live on in Berlusconi’s following.

The deduction is too linear, however. Berlusconi has certainly never stinted appeals to Christianity and family values, or warnings of the persistent menace of Communism, and Forza Italia certainly inherited the bastions of DC clientelism in the South – most notoriously in Sicily. But the filigrane of Catholic continuity in his success is quite tenuous. It is not only that the DC zones of the North-East have gone to the League, but practising Catholics – the quarter of the population that attends mass with some regularity – have been the most volatile segment of the electorate, many in the early years of the Second Republic voting not only for the League but also the PDS. Nor is there a clear-cut connection between small businesses or the self-employed and political reaction. The red belt of Central Italy – Tuscany, Umbria, Emilia-Romagna and the Marche – where the PCI was always strongest, and which the PD still holds today, is rife with both: family enterprises, flourishing micro-firms, independent artisans and shopkeepers, as well as the region’s co-operatives, a world not of large factories or assembly lines, but of small property.

Berlusconi’s real lineage is more pointed. Fundamentally, he is the heir of Craxi and the mutation he represented in the Italian politics of the 1980s, rather than of the DC. The descent is literal, not just analogical. The two men were close contemporaries, both products of Milan, their careers continuously intertwined from the time that Craxi became leader of the Socialist Party (PSI) in 1976, and Berlusconi set up his first major television station two years later, funded with lavish loans from banks controlled by the Socialist Party. The relationship could hardly have been more intimate, at once functional and personal. Craxi created the favours from the state that allowed Berlusconi to build his media empire: Berlusconi funded Craxi’s machine with the profits from it, and boosted his image with his newscasts. A frequent guest at Berlusconi’s palatial villa in Arcore, where he was liberally supplied with soubrettes and haute cuisine, in 1984 Craxi was godfather to Berlusconi’s first child by the actress Veronica Lario before he married her, and best man at the wedding when he did marry her in 1990. On becoming premier in 1983, he rescued Berlusconi’s national television networks, which were broadcasting in defiance of a Supreme Court ruling, from being shut down, and in 1990 helped ensure Berlusconi’s permanent grip on them, with a law for which he received a deposit of $12 million to his account in a foreign bank. At the pinnacle of his power, Craxi cut a new figure on the postwar Italian scene – tough, decisive, cultivating publicity, in complete command of his own party, and a ruthless negotiator with others.

Three years later, with the revelations of Tangentopoli exposing the scale of his corruption, Craxi had become the most execrated public figure in the land. But he was not finished. His own career in ruins, he passed his vision of politics directly to Berlusconi, urging him to take the electoral plunge at a meeting in Milan in April 1993. According to a DC eyewitness,

Craxi paced the room like a hunted animal as he talked. ‘We must find a label, a new name, a symbol that can unite the voters who used to vote for the old five-party coalition,’ Craxi told Berlusconi. ‘You have people all over the Italian peninsula, you can reach that part of the electorate that is disoriented, confused, but also determined not to be governed by the Communists, and save what can be saved.’ Then Craxi sat down and began drawing a series of concentric circles on a piece of paper. ‘This is an electoral college. It will have about 110,000 people in it, about 80,000 to 85,000 with the right to vote. Of these only about 60,000 to 65,000 will actually vote. With the weapon you have with your television stations, by hammering away with propaganda in favour of this or that candidate, all you need is to bring together 25,000 to 30,000 people in order to have a high probability of reversing the projections. It will happen because of the surprise factor, because of the TV factor and because of the desire of many non-Communist voters not to be governed by the Communists.’ Craxi then got up to go. After showing him out, Berlusconi said: ‘Good, now I now know what to do.’

Though by the end of its time the DC had, under pressure of competition, descended to the same levels of venality as the PSI, there was historically a significant difference between Craxi’s model of politics and Christian Democracy. The DC not only enjoyed the reflected aura of a time-honoured faith, it had a solid social base that Craxi’s brittle machine never acquired; and it had always resisted one-man leadership, remaining an intricate network of counterbalancing factions, immune to the cult of the strongman. Down to the end, however many billions of lira its bagmen were collecting from contractors and businessmen, less went into the personal pockets of its leaders, whose lifestyles were never as showy as those of Craxi and his colleagues. Scarcely any of its top figures came from Lombardy. Culturally, they belonged to another world.

Berlusconi, catapulted onto the political stage as Craxi fled into exile, thus embodies perhaps the deepest irony in the postwar history of any Western society. The First Republic collapsed amid public outrage at the exposure of stratospheric levels of political corruption, only to give birth to a Second Republic dominated by a yet more flamboyant monument of illegality and corruption, Craxi’s own misdeeds dwarfed by comparison. Nor was the new venality confined to the ruler and his entourage. Beneath them, corruption has continued to flourish undiminished. A few months after the centre-left governor of Campania, Antonio Bassolino – formerly of the PCI – was indicted for fraud and malversation, the governor of Abruzzo, Ottavio Del Turco, another stalwart of the centre-left – formerly of the PSI – was also arrested, after a private-health tycoon confessed to having paid him six million euros in cash as protection money. Berlusconi is the capstone of a system that extends well beyond him. But, as a political actor, credit for the inversion of what was imagined would be the curing of the ills of the First Republic by the Second belongs in the first place to him. Italy has no more native tradition than trasformismo – the transformation of a political force by osmosis into its opposite, as classically practised by Depretis in the late 19th century, absorbing the right into the official left, and Giolitti in the early 20th, co-opting labour reformism to the benefit of liberalism. The case of the Second Republic has been trasformismo on a grander scale: not a party, or a class, but an entire order converted into what it was intended to end.

Where the state has led, society has followed. The years since 1993 have, in one area of life after another, been the most calamitous since the fall of Fascism. Of late, they have produced probably the two most scalding inventories of avarice, injustice, dereliction and failure to appear in any European country since the war. The works of a pair of crusading journalists for Corriere della Sera, Gian Antonio Stella and Sergio Rizzo, La Casta and La Deriva, have both been bestsellers – the first ran through 23 editions in six months – and they deserve to be. What do they reveal? To begin with, the greed of the political class running the country. In the Assembly, deputies have raised their salaries virtually six-fold in real terms since 1948, with the result that in the European Parliament an Italian deputy gets some 150,000 euros a year, about double what a German or British member receives, or four times a Spaniard. In Rome, the Chamber of Deputies, Senate and prime minister occupy altogether at least 46 buildings. The Quirinale, where the president of the Republic – currently Giorgio Napolitano, until yesterday a prominent Communist, as impervious as his predecessors – resides, puts at his disposal more than 900 servitors of one kind or another, at the last count. Cost of the presidential establishment, which has tripled since 1986? Twice that of the Elysée, four times that of Buckingham Palace, eight times that of the German president. Takings of its inmates? In 1993 Gaetano Gifuni, the Father Joseph of the palace, at the centre of then President Scalfaro’s operations to protect himself from justice, received 557,000 euros at current values for his services – well above the salary of an American president. Transport? In 2007, Italy had no fewer than 574,215 auto blu – official limousines – for a governing class of 180,000 elected representatives; France has 65,000. Security? Berlusconi set an example: 81 bodyguards, at public expense. By some reckonings, expenditure on political representation in Italy, all found, is equivalent to that of France, Germany, Britain and Spain combined.

Beneath this crust of privilege, one in four Italians lives in poverty. Spending on education, falling in the budget since 1990, accounts for a mere 4.6 per cent of GDP (Denmark: 8.4 per cent). Only half of the population has any kind of post-compulsory schooling, nearly 20 points below the European average. No more than a fifth of 20-year-olds enter higher education, and three-fifths of those drop out. The number of hospital beds per inhabitant has dwindled by a third under the new republic, and is now about half that in Germany or France. In the courts, criminal cases take an average of four years to reach a final verdict, time that is taken into account in the statute of limitations, voiding up to a fifth of cases. In civil suits, the average completion time for a bankruptcy hearing is eight years and eight months. In late 2007 two septuagenarian pensioners, trying to bring a case against the Social Security Institute, were told they could get an audience in 2020. As for equality before the law, an Albanian immigrant charged with trying to steal a cow in his homeland spent more days in an Italian prison than one of the mega-crooks of the food industry, Sergio Cragnotti, who destroyed the savings of thousands of his fellow citizens. Politicians were treated still better than tycoons: Berlusconi’s right-hand man, Cesare Previti, convicted of corrupting judges after hearings that lasted nine years, and sentenced to six years’ imprisonment, spent all of five days in jail before being released to perform community service.

The material infrastructure of the country is in no better shape than its public institutions. Harbours: the seven major ports of Italy, put together, handle less container traffic than Rotterdam. Motorways: half the mileage in Spain. High-speed trains: less than a third of the tracks in France. Overall rail network: 13 kilometres longer than in 1920. Airlines: Alitalia has 23 long-range passenger jets compared to Lufthansa’s 134. All contributing to the dismal economic record of the last decade, when GDP has grown at the slowest pace anywhere in the EU, and labour productivity has barely improved: just 1 per cent between 2001 and 2006. Per capita income – still increasing at a modest 2 per cent a year between 1980 and 1995 – has been virtually stationary since 2000.

Meanwhile, the gap in living standards between North and South has widened. Criminal organisations are active in more than 400 communes of the Mezzogiorno, inhabited by some 13 million Italians, where one in three local businessmen reports widespread rackets. Labour-force participation is the lowest in Western Europe, and that of women rock-bottom; 30 points below Denmark, 20 below the US, ten below the Czech Republic. Nor does exclusion from production mean high levels of reproduction: just 1.3 births per woman, projecting a fall in the population from 58 to 47 million by mid-century. Already the elderly above the age of 60 outnumber the young between 18 and 24 by nearly three to one. The average voter is now 47.

Redeeming this desolation has, to all intents and purposes, been just one improvement, in job creation. Unemployment, which stood at 12 per cent in the mid-1990s has dropped to 6 per cent today. But most of this work – half of all the new posts in 2006 – involves short-term contracts, and much of it is precarious employment in the informal economy. No counteracting dynamism has resulted. In the formula of the Neapolitan sociologist Enrico Pugliese, Italy has gone from growth without jobs in the last years of the First Republic to jobs without growth under the Second, blocking productivity gains. The predominance of small to medium firms – some four and a half million, or a quarter of the total number in the whole of the pre-enlargement EU – has cramped expenditure on research, tethering exports to traditional lines of strength in apparel, shoes and the like, where competition from low-cost Asian producers is now most intense. High-tech exports are half the European average, and foreign investment is famously low, deterred not only by fear of extortion and maladministration, but also by the still close defences of Italian big business, whose holding companies and banks are typically controlled by shareholder pacts between a few powerful interlocking insiders.

In the past, this model flourished with a flexible exchange rate, adjusting to external challenges with competitive devaluations, and tolerating relatively high rates of domestic inflation and deficitary finance. With Italy’s entry into European Monetary Union, the Second Republic put an end to this. Budgets were retrenched to meet the Maastricht criteria, inflation was curbed, and depreciation of the currency ceased to be possible. But no alternative model materialised. The macro-economic regime had changed, but the structure of production did not. The result was to worsen the conditions for recovery. Growth was not liberated, but asphyxiated. Export shares have fallen, and the public debt, the third largest in the world, has remained stubbornly above 100 per cent of GDP, mocking the provisions of Maastricht. When the Second Republic started, Italy still enjoyed the second highest GDP per capita of the big EU states, measured in purchasing power parity, after Germany – a standard of living in real terms above that of France or Britain. Today it has fallen below an EU average now weighed down by the relative poverty of the East European states, and is close to being overtaken by Greece.