The runup to this election promises to be a mixture of daily boredom and entertaining gaffes.
When I returned to London after a seminar in Venice last weekend, the gaffe of the day appeared to be the responsibility of Stefano Pessina, acting chief executive of Walgreens Boots Alliance (plain old Boots to you and me), who told us that a Labour win would be “a catastrophe” for Britain.
On closer inspection, it turned out that a Labour win, if it forced the likes of tax exiles such as Pessina to pay their taxes, would be more of a catastrophe for him and his ilk.
There is a cynical campaign being conducted by some business leaders and City luminaries to discredit the leader of the opposition for being “anti-business”, when the driving force behind Miliband’s approach is simply the desire to combat the excesses of modern capitalism, some of which notoriously contributed to the crisis of 2007-09, from which, frankly, we are still trying to emerge.
The Labour party has not been anti-business since the reforming job done, at great cost to himself, by Neil Kinnock in the 1980s. It is fashionable to give all the credit to Tony Blair for reforming the Labour party, but the truth is that much hard work was also put in by Kinnock.
Indeed, if anything, under Blair and Gordon Brown, Labour, in its desire to please, became almost too pro-business and too pro-City; it was a sucker for consultations with the latter – which, curiously enough, often gave vent to advice and reforms that led to the feathering of the nests of those consulted. “Light-touch regulation” was one such example. And there were all manner of tax concessions for dubious enterprises (see Private Eye, passim).
Which brings me back to last weekend’s seminar in the country from which Pessina is a Monaco-based tax exile. Every year now, for 20 years, the Italian government has hosted a meeting of British and Italian journalists at which Italian ministers, officials and industrialists can speak under what is known as the Chatham House Rule – the information can be used but sources must be protected.
In my experience, at such events, there is almost always an obsession with what is going on somewhere else. Sure enough, on this occasion the big focus of interest was whether prime minister Matteo Renzi would see his candidate for president, the veteran Sergio Mattarella, elected, down there in Rome, over opposition from the egregious Silvio Berlusconi, who still calls a lot of the shots.
The result was considered a triumph for Renzi with, it was hoped, good omens for his “reform agenda”: We shall see. I did not get where I am today by going too closely into Italian politics, although I once spent a memorable evening with Giulio Andreotti.
But my interest in the Italian economy goes back many years, and the word “reform” has come up so often – the subject of ambitious presentations at many a seminar – that one has to beware of “reform fatigue”, not weariness with reform (there seldom appears to be much in practice), but there is always a chance that something may actually happen.
You see, for decades, the Italian economy trundled along quite nicely, with a strong industrial sector, a great name for design, and the ability to devalue the lira from time to time, when wages got out of control and international competitiveness suffered. That is to say, for all its “structural rigidities” and “Italian practices”, the economy performed reasonably well.
In recent decades, it has been hit by a succession of blows, not least the financial crisis – which struck after great strides had been made in reducing the budget deficit – and the economic straitjacket of the eurozone. Membership of the single currency not only removes the freedom to devalue against, for example, Germany: it also subjects Italy to the kind of fiscal sadism against which the Greeks have just revolted.
The many “rigidities” of Italy’s economy are highlighted in the film Girlfriend in a Coma, made by Annalisa Piras and former Economist editor Bill Emmott, described by Le Monde as “a desperate love letter to Italy”.
Well, the Italians are having another go. One reform which might not be too popular with Pessina is yet another attempt to crack down on tax avoidance – generally considered something of a national sport.
They are trying to speed up the justice system as part of an effort to stimulate more inward investment, and – especially important for so many of the young, who are effectively excluded from the labour market – the Renzi administration aims to reduce the imbalance in labour contracts between those with a “job for life” and those desperate to get a job.
Meanwhile, rays of hope as the sun was setting in Venice last Saturday were: first, although Italy cannot devalue against Germany, the entire eurozone may gain some relief from both the European Central Bank quantitative easing programme – boosting money and credit – and the devaluation of the euro. Then there is the potential boost to spending from the lower oil price.
Nevertheless, macroeconomic policy in the eurozone remains far too restrictive. I think we are talking of alleviation of the Italian economy’s problems, rather than a cure.
