Has Matteo Renzi Given Italy What It Needs?

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'They need a possibility of a future': has Matteo Renzi given Italy what it needs? When Renzi came to power, he inherited a country beset with problems. Two years on, his desire for reform has not been wholly satisfied

Stephanie Kirchgaessner in Rome Monday 22 February 2016 02.00 EST

It has been two years since Matteo Renzi became prime minister of Italy following an audacious intra-party coup. Here’s what he has, and has not, achieved in the eurozone’s third largest economy.

Has achieved:

Stronger economy

When Renzi took office, turning around an economy deep in recession was his top priority. Today, the Italian economy is growing, albeit at a slow pace of 0.7% in 2015. Much of this was due to the help from fellow Italian Mario Draghi, president of the European Central Bank, but Renzi played an important role by pursuing a reform agenda designed to improve investor confidence and modernise the economy. Unemployment is still above the EU average at 11.4 %, butit is nevertheless an improvement from 12.7% two years ago.

Political reforms

Last year, Renzi passed changes to the electoral system that will make governing in Italy’s gridlocked parliament easier. He passed an overhaul of the upper chamber that effectively strips the Senate of many of its powers. That law still needs to be approved by referendum, dated for the fall of this year. These changes were considered long overdue and testify to Renzi’s sound political skill. While some see the changes as a power grab, they have generally been welcomed as a sign of progress.

Enhanced Italy’s credibility

Although Silvio Berlusconi still makes headlines now and then, Renzi’s premiership has gone a long way to restoring Italy’s credibility on the global stage. His two predecessors, Mario Monti and Enrico Letta, were competent but ultimately weak leaders. Renzi faces domestic political challenges, but is viewed as a strong leader who has recently become more vocal in his criticism of EU policies on austerity and Germany’s dominance within

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the EU. Renzi has also become a tireless advocate for his country to take on large-scale international events – from the Expo in Milan last year to Rome’s 2024 Olympic bid.

Gender diversity

Women still have a long way to go in Italy, which has the third lowest female labour participation rate (51%) among OECD countries. But Renzi has helped to address the gender divide in at least one high-profile way: half of his cabinet ministers were women when he became prime minister two years ago. That figure has fluctuated with some changes – six of 16 seats are now held by women – but advocates for gender and pay equality say the changing face of government, from the reform minister, Maria Elena Boschi, to Roberta Pinotti, the defence minister, represents an important change.

Challenging EU austerity policies

Renzi has emerged as one of the strongest voices in the EU against austerity policies. Late last year, Renzi issued a full-throated warning to the EU and Angela Merkel, Germany’s chancellor, that austerity was fanning the flames of populism. Its perceived obsession in Brussels with “commas and decimal points” on issues such as Italy’s budget, was ultimately detrimental to the EU, he argued. He does not always win rounds with Brussels, but his jabs are getting sharper. Has not achieved: Anti-EU populism on the rise

Renzi has not wavered from his view that Italy belongs in the EU and the eurozone, but he is not making his case successfully to Italians. Luckily for Renzi, the centre-right and rightwing parties Forza Italia and the Northern League seem to be in disarray, but the anti-Euro Five Star Movement is nipping at the prime minister’s heels. When he heads into local elections in June, Renzi will be the only serious pro-Europe leader in Italy. It partly explains why his rhetoric against interference from Brussels has become more sharp recently, but he will have to do more to make his case before elections.

LGBT rights

One of Renzi’s early promises was to address a gaping problem in Italy’s civil rights record: it is the only major country in western Europe that does not recognise civil unions or gay marriage. So far, he has failed to come through on that promise, having delayed a push to introduce civil unions for much longer than he promised. This week, the Senate is due to vote on a contentious civil union bill, which may or may not pass. It’s uncertain fate lies partly in the fact that Renzi is allowing members of his party to “vote with their conscience”, including conservative Catholic members who are opposed. It is not only an important LGBT rights issue, but also a test of whether Renzi can modernise Italy.

Migrant crisis

It took the death of an estimated 800 migrants off the coast of Libya to catch Europe’s attention on the severity of the crisis on the Mediterranean in April last year, despite several earlier attempts by Renzi to make the issue a priority within the EU. Even since then, Renzi’s call for action has largely gone unheeded, particularly his call for a renegotiation of the Dublin convention that requires refugees to seek asylum at their first port of entry. There has been some symbolic progress – he helped to convince EU members to agree to a relocation programme for migrants and refugees – but in practice only a small fraction have been relocated across the EU.

Bad banks

Italy’s economy might be looking better, but the state of the country’s banks has cast a shadow over its prospects. Renzi and his team are seen as having mishandled the bailout of local banks last year that led to thousands of retail investors losing their savings. Since January, the sector has been under pressure in the markets because of worries about the high number of bad loans on their balance sheets. The turbulence is the last thing Italy’s nascent economic recovery – or Renzi – needs.

Southern Italy

Renzi seems allergic to Italy’s beleaguered south. He rarely ventures south of Rome and has made it to Sicily just a few times since becoming prime minister. It speaks to a north/south divide in Italy – an economic divide – that has never been seriously addressed by this charismatic and reforming prime minister, who clearly feels most at home in Florence, the rich central Italian city. Speaking of Italians, the prime minister told the New Yorker last year: “They love their past, their present, but they need a vision and an explanation of their future – in the possibility of a future.” It is an inspirational statement, but one that only works if you show up to make it.

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