[War] Italy 2013

[Dan Garcia]

Italian Republic
Head of State:President Giorgio Napolitano (term ends in May 2013)
Head of Government:Prime Minister Lazaro Magnano
Population:58,024,555
GDP (PPP):$1.729 Trillion
GDP (PPP) per capita:$29,808.82
GDP:€1.452 Trillion
GDP per capita:€25,029.67
Unemployment:10.1%
Economic Growth:1.1% (Jan. 2012 to Jan. 2013)

(OOC:  I couldn't resist.  WAR is crack.)

Political Landscape:

The Berlusconi government, peppered by scandals, managed to teeter onwards in part due to Berlusconi's remarkable political resilience and in part due to the lack of an opposition leader who could garner sufficient support to topple the Berlusconi government's coalition.  However, the ongoing scandals involving Berlusconi were a constant distraction and prevented any coherent national policy making as time passed.

The ongoing economic malaise in which Italy found itself, compounded by the Panic of 2008 and the severe recession which followed, began shifting the political landscape beneath the feet of the established players.  In particular, the rising unemployment rate - peaking at 11.6% in April 2010 - inflamed an already growing anti-immigrant sentiment among the electorate.  The August 22nd, 2011 terrorist attacks in Rome, widely blamed on Libyan immigrants, were for many Italians the final straw in the status quo with regard to immigration.  The Northern League, already positioning itself as tough on immigration, used the aftermath of the bombings to enhance their political prestige and popularity.

The August 2011 terrorist attacks also were the beginning of the end for the Berlusconi government.  Though the initial aftermath was handled as well as possible by Berlusconi and his government in public, his government naturally came in for criticism.  However, what only slowly began to become apparent was that in private Berlusconi and several of his associates had expressed much more glib responses to the terrorist attack.  Finally, in May 2012 it was revealed that in the immediate aftermath of the attacks Berlusconi had, despite the national emergency and fear among the populace, declined to cancel a previously planned party at his home in Sardinia.  This was the last straw for the Italian populace.

What followed for much of the summer was political deadlock.  The opposition Democratic Party was unable to topple the government, partly due to an unwillingness to face an early election quite yet due to their perceived weakness over the immigration issue which threatened to hurt their chances at winning an early election.  Delaying the election and letting the Berlusconi coalition self-destruct seemed to be the more prudent course.  Meanwhile, the Berlusconi coalition was paralyzed by a struggle for the leadership, with the Northern League and Movement for Autonomy proving quite intransigent while currying favor for the elections which everyone knew must eventually come.

By September 4th, 2012, Paolo Tartaglia emerged as the head of the People of Freedom party and head of the governing coalition.  Tartaglia was a man with a clean record, and had got the job by being the least offensive candidate.  Three days later, hoping to ingratiate himself with the electorate, he called elections for December 3rd.

It quickly became apparent that the foremost issue on the minds of the Italian people was immigration and immigrants.  The opposition was generally unable to put forth a coherent position on this matter due to a conflict between the politically expedient desire to pander to the electorate on the issue and the wide spread view that the parties of the left, to the extent that they weren't willing to look the other way on immigration completely, had no stomach for any major action to halt immigration and deal with the large number of illegal immigrants in the country.  For Tartaglia's part, being inoffensive in a most general sense he was also unable to put forth a strong immigration platform that the electorate could like, unwilling as he was to offend those who were more moderate on the issue.

In the end, it was the regionalist parties, in particular the Northern League and to a lesser extent the Movement for Autonomy, who benefited.  The result favored Tartaglia's coalition, however the balance of power within the coalition had shifted significantly away from the People of Freedom party.  The Northern League under Angelo Alessandri, sensing a rare moment of advantage, refused to support Tartaglia as Prime Minister in the new parliament, demanding that he himself should take the office.

Intense negotiations followed, and it quickly became clear that neither the soft Tartaglia nor the regionalist Alessandri would be acceptable as Prime Minister.  To be able to form a government that could claim a national mandate and to recognize the fact that the People of Freedom party was still the largest in the coalition and the only coalition member which could claim a national base of support, the new Prime Minister would need to come from the larger party.  To fulfill the coalition's electoral mandate to find a solution to the immigration problem and to assure the support of the regionalist parties, the new Prime Minister would need to be anti-immigration and in favor of limiting the size of the central government.  All these caveats ruled out essentially all the coalition leadership.

On January 5th, 2013, Lazaro Magnano, a long-time member of the People of Freedom party from Genoa, former American hedge fund manager, and of late a major advocate of strong anti-immigration policies was agreed upon to be the new Prime Minister.

Election Results for December 3rd, 2012:
Senate:
Governing Coalition:People of Freedom:  121; Northern League:  50; Other:  19;  TOTAL:  190 (+12)
Opposition:  Democratic Party:  107;  Other:  18;TOTAL:  125 (-12)
Chamber of Deputies:
Governing Coalition:People of Freedom:  210; Northern League:  118; Other:  53;  TOTAL:  381 (+34)
Opposition:  Democratic Party:  177;  Other:  72;TOTAL:  223 (-34)


Economics:

For years, and in particular since the adoption of the euro over the lira, Italy has been mired in an economic malaise.  Unable to boost growth via its traditional method of devaluing its currency, economic growth had been tepid during the latest global expansion.  Moreover, there had grown to be widespread discontent over increased prices in Italy, partly attributed to the adoption of the euro.  In general, the Italian economy had increasingly been a source of discontent for the Italian people even before the Panic of 2008.

The Panic of 2008 and the onset of the global recession hit Italy hard.  As the mainstay of the Italian economy was the manufacture by small and medium size firms of consumer goods, and in particular luxury brands whose sales suffered greatly in the recession, the recession hit the Italian economy hard.  The only countervailing force was that the Italian banking system was not affect by dubious loan practices to the extent of Great Britain or the United States.

The government was forced to walk a fine line on fiscal matters, with limited ability to provide a fiscal stimulus due to high government debt, already above 100% of GDP.  The government's lack of strong measures to restore the economy led to some unpopularity.  However, as the economy had been faring less than splendidly over the past decade through governments of the left and right, as well as the lack of any coherent or plausible alternative from the opposition, this was not enough to affect the political landscape.

Moreover, the recession has exacerbated several other economic problems.  It is widely believed that the underground economy has grown relative to the rest of the economy during the recession as people try to avoid high taxes and other onerous restrictions.  In the south, poorer than the north the pinch has strengthened the hand of the mafia moderately.  However, the south, being more predominately agricultural, was also less affected by the recession.


Social Issues:

The predominant social issue of recent years in Italy has been problems perceived to be caused by immigration, in particular but not solely illegal immigration.  Real and imagined increases in crime have largely been blamed on immigrants.  Moreover, immigrants have been accused of taking jobs from Italians and lowering prevailing wages by working for less.  This concern has been particularly prevalent since the beginning of the recession.

As Italy is a major entry point for illegal immigrants into Europe, a great deal of debate has focused on how to deal with illegal immigrants who are caught before landing in Italy, or shortly after landing.  Many times countries of origin are reluctant to take back illegal immigrants who have been caught.  Proposals for increased border controls and other enforcement efforts have not made much progress for various reasons, largely political waffling.  

The result has been growing intolerance of foreigners, mostly non-Europeans.  This has manifested not only in political developments but in every day life.  The lives of immigrants, particularly Africans, has become more difficult, and discrimination has become widespread.

There are, however, other issues.  The public health care system is widely regarded as of poor quality and badly in need of reform.  As with much of the rest of the developed world, the social safety net is underfunded over the long term, not leastwise due to tepid population growth leading to an aging population and workforce.


Defense:

The Italian defense establishment has, over the past few years, lost ground compared to its European counterparts as many other European nations have begun to deepen and expand their support for their militaries.  This has not gone unnoticed by the Italian people, and those who lean rightwards politically have begun to vocalize discontent at this matter.  There is broad support for some expansion in the military's resources, particularly given the possible use in helping combat the immigration problem.  There is also a little bit of pride at stake, though cynical, largely American observers have remarked that perhaps the only military with a worse record of military defeat than France is Italy.

Like the other major European powers, Italy has been slowly reforming its military to deal with more expeditionary warfare than the home defense mindset nurtured during the Cold War.  However, Italy has to date failed to make the same investments in amphibious vessels and strategic transport aircraft that many other nations have made and which are seen to be important assets in the new strategic position of Europe.  Otherwise, modernization has moved forward inertially, with the Eurofighter, F-35, surface combatants, and armored vehicle programs begun in the last decade coming to fruition.


Foreign Relations:

The recent years have been a quiescent time in Italian foreign relations owing largely to a focus on domestic problems and weak governments.  With the successful end of international activities in Iraq and then Afghanistan, the presence of Italians abroad has decreased substantially.

The failure of the Lisbon Treaty in the second Irish referendum in late 2009 left the European Union fumbling for a way forward.  The Italian government, itself under pressure domestically and with the increasing influence of the Northern League and other regionalists, has been at best tepid in its support of further progress and has even begun to question the heavy bureaucratic burden increasingly being hoisted by the EU over the member states.  This stance was reverted somewhat during the brief Tartaglia government, but this was more due to Tartaglia's personal leanings than the political realities.  With the dominant political issue being immigration, and those parties who are in a position to benefit from this are more Eurosceptic, the Italian influence on European policy going forward is expected to be less warm.

With events in Afghanistan eventually working in the favor of the NATO forces in the country, Italian relations with and feelings toward NATO are on a positive trend.  A slight mitigating factor was the dispute over the use of Italian - among other nations' - troops in a combat role.  The Italian government never officially authorized the use of Italian troops in combat operations, but unofficially Italian troops eventually did take part in combat operations, after pressure from the Americans and to a lesser extent the British.  Italy also quietly managed to send, with American assistance, more helicopters for use by NATO troops.  Despite the frictions involved in all this, success is a remarkable tonic.  Moreover, after years of government under Berlusconi, a notably pro-American leader, Italy has grown closer to the United States again.


Timeline:

August 22nd, 2011 - Terrorist attacks in Rome kill 35 and injure 68.  The landmarks of Rome receive, fortunately, little major damage.
May 14th, 2012 - It is revealed that Prime Minister Berlusconi had left Rome shortly after the August 2011 bombing to attend a previously scheduled private party.
September 4th, 2012 - Paolo Tartaglia becomes Prime Minister after succeeding to the leadership of the governing coalition.  Three days later, elections are scheduled.
December 3rd, 2012 - Elections return the governing coalition, but with a weakened People of Freedom party and a vastly more powerful Northern League, shifting the balance of power in the governing coalition.
January 5th, 2013 - Lazaro Magnano becomes Prime Minister after intense, month-long negotiations.

Short Biography of Lazaro Magnano:

Born November 12th, 1964 in Genoa to a well-to-do family of traders, largely involved in exporting, or assisting in the exporting, of the luxury goods manufactured by Italy's famous small and medium sized businesses.  Traveling with his father and the rest of his family on business trips across the world, Lazaro gained a knack for languages, and is particularly fluent in English and Japanese.  He was also exposed early on to the international currency market, part of his father's side of the family business.  All the traveling Lazaro did meant that his eduction was largely, though not exclusively, through tutors and home schooling.

While Lazaro's father generally kept his family with him, he was a stern man.  Thus, between the father and children there was something of a chill in their relations, and Lazaro in particular ended up with some of the same stern quality and a deadpan sense of humor.  Lazaro's siblings would end up rebelling against their father and would generally be much more free-wheeling than either Lazaro or his father.

When the time came for university, Lazaro attended the University of Chicago starting in 1982, and graduated in 1986 with a BA in Economics.  He spent his summers interning with his father, an experience which would open a door in currency trading after graduation.  After several years in New York, working in various currency trading related hedge funds, he and a group of others began a fund of their own in 1989, Lazaro partly soliciting funding from his family.

The fund was a success, and grew rapidly.  By the mid-1990's the fund had begun to diversify and became involved in the dot-com Boom of the late 1990's.  However, beginning in July 1999, Lazaro became worried that stocks were badly overvalued, noting the inability of many of the "New Economy" companies to earn revenue nonetheless turn a profit.  The other fund managers dismissed his worries, and by the end of October Lazaro had sold his stake in the fund, and moved his assets to what he deemed safer investments.  By Christmas he was looking foolish, as the NASDAQ market had risen by 50%.  To his friends, he outwardly admitted he had been foolish, but at the family home in Italy over the holidays he privately admitted he had no regrets:  the fall would be all the much harder.  By the end of 2001, he had been proven quite correct.

Meanwhile, in 1996 he had married Frances de Giusti, a hospital administrative worker whose family had moved to the United States shortly after her birth.  Five years his junior and from a less privileged background than Lazaro, the marriage raised some eyebrows at the time, but was a happy one.

2001 was a pivotal year for Lazaro.  He largely spent the year playing the market with his own funds and doing quite well.  He gave advice, for a price, to other managers, but it became increasingly clear that he was retired from the world of high finance.  By the middle of the year, he was contemplating moving back to Italy permanently, as opposed to the irregular time he had spent there since entering college.  In the end, events made the decision for him.  On the morning of September 11th, Lazaro had left one meeting and was walking over to the World Trade Center for his main meeting of the day when American Airlines Flight 11 crashes into the north tower of the World Trade Center.  Lazaro was wounded in the arm by falling debris, and was still nearby when the towers fell later in the morning.  He moved back to Italy with his wife by the end of October.

Shortly after arriving back in Italy, Lazaro began to involve himself in politics, joining the Forza Italia party.  His first involvement in government was advising the Department of the Treasury on public debt auctions, leading to a slight lowering of the interest rate on new government debt.  Much of Lazaro's time during this period was spent networking and building a political position.  His first election was in the European Parliamentary elections in 2004 when he stood for a seat.  Though he lost, he campaigned hard and made a good impression.

He stood for a seat in the Chamber of Deputies in the 2006 general election and managed to win.  He quickly distinguished himself by his attention to detail and his skewering of any argument he saw as vacuous or misleading.  When the People of Freedom party, formed from among others the old Forza Italia party, returned to power in 2008, Lazaro became an Undersecretary of the Economy and Finance.

On August 22nd, 2011, Lazaro was present with his wife having a pleasant breakfast in the Piazza della Rotunda in front of the Pantheon when a terrorist bomb exploded in the plaza, killing and wounding many.  Lazaro was slightly injured in the thigh by a small piece of shrapnel, but helped organize the scene, which resulted in his first real national media exposure.  In November 2011, he was picked to be Minister for Economic Development, the previous holder stepping down in the aftermath of the terrorist attack as scandal enveloped the government.  

One evening after Christmas but before the beginning of 2012, Lazaro and Frances were jogging together near their home in Genoa when they were mugged by a pair of African immigrants.  Lazaro resisted, and one of the assailants produced a gun and fired it at Lazaro.  The shot missed him, but instead struck his wife.  The sounds of the struggle and the gunshot brought assistance, but by the time Frances arrived at the hospital, she was too far gone.  In a final element of tragedy, Lazaro and Frances had been trying to conceive for over a decade, and had finally started fertility treatments.  At the hospital it was discovered that the treatments had been effective:  Frances had been pregnant.

The next day, before the press, Lazaro attacked the status quo in immigration policy.  "It is estimated that there are approximately half a million people living in Italy illegally.  That is half a million people who are breaking, disregarding the law.  Half a million souls fed into the black economy.  They are allowed all the amenities of citizenship when their very presence undermines the foundation upon which that citizenship is built.  And all we do is warn them to leave, or fine them, or perhaps detain them for a while.  We have let a situation develop to unsustainable proportions.  Either our laws, our society must give way or we must stand strong, and act to end the tide, the scourge of illegal immigration."

From that point, and through the next year's political battles, Lazaro came to the forefront of the immigration debate, favoring stringent anti-illegal immigration measures at the border and at home.  It was this that helped make him acceptable to the Northern League as Prime Minister.