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20 Oct, 2013 15:56

Strange bedfellows: Italy’s budget crisis unites jobless youth and big business

Public unrest in Italy, fueled by the new budget rolled out by the shaky ruling coalition, has united unemployed youth and the captains of industry in opposition, James Walston, an Italian politics expert from the American University of Rome, told RT.

Violent clashes broke out between police and demonstrators in Rome on Saturday as up to 70,000 took to the streets to protest Italy’s new budget.

Earlier this week, Prime Minister Enrico Letta - who leads the unstable Left-Right coalition - presented the 2014 budget, which immediately came under fire from both sides of the coalition.

The left criticized the budget for freezing state sector pay and pensions, while the right and big-business said it failed to stimulate growth with insufficient cuts to Italy’s oppressive corporate taxes.

Walston says that attempts to balance Italy’s books are rooted firmly in a eurozone system which many argue is being steered by Berlin.

RT:It was a turbulent night in Rome. Can we expect to see even more unrest?

James Walston: We are seeing more this morning. This morning the protesters have camped outside one of the gates of Rome – ironically, where the Italians came to conquer Rome from the Popes in 1870. And today, of course, it’s a major traffic hub and on a Sunday it doesn’t matter too much, but the traffic around the center of the city is blocked, because they are protesting and camping there, and say they want to mobilize the city. So this is going on, and will probably go on in different ways for a long time now.

RT:So is the government going to review this unpopular budget that actually triggered such public discontent?

JW: Well, the budget was published on the 15th, – a few days ago – and it will be passed (as) this was the proposal from the government. It has to be passed by the end of the year; it’s going to be modified anyway. And the government has not yet said how it’s going to modify the budget. But so many people - from the employers to the trade unions to different political parties – and now very strong protests from young people of various sorts who said ‘We do not like the government, we don’t like the budget. We want a recovery budget, we want a growth budget.’ This is what they’re complaining about. They’re complaining about the same thing as the employers. It’s an unusual situation, but that’s what we have.

RT:Even the Red Cross is warning about austerity in Europe, saying it's caused a deep social crisis that will be felt for decades. So why continue with it?

JW: Well, the euro(zone) economy and to a lesser extent the whole of the European economy – those EU countries outside of the euro system – is conditioned and some would actually say run by Germany and Chancellor Merkel. As we know, Germany, and in particular Chancellor Merkel and her government, have an abhorrence of anything leading to inflation. By putting into effect a growth package, there is the risk of inflation.  There is certainty of some inflation, and there’s the risk of serious inflation – not a very big risk – but there is a risk of serious inflation. Because of what happened in Germany 80-90 years ago, there is this terror of inflation. Germans have put a limit on growth; they want to get everyone’s accounts right.

This is where we started. Remember, we started because the Greek economy, apart from the world reasons but within the European system, the Greek economy was way over budget. They’d been spending far too much for far too long. The Italian budget, well, not the budget but the national debt is in the same situation. So what the Germans are trying to do is to rein this in. But of course in many ways it’s made things much worse and we will have some sort of change now that the Chancellor is back in the seat and she has a new mandate. There is a chance that we will have some sort of growth at a European level, we’re going to have to have growth budgets at local, at domestic levels.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.