Stanton H. Burnett


Stefano Vaccara

These Occasional Reports are released by the Europe Program at the Center for Strategic & International Studies (CSIS). They are usually the result of one of the various activities sponsored by the Program–including bilateral groups, working groups, euro-watch groups, and others. The Program Director is Dr. Simon Serfaty, who also chaired the working group that helped make this Report possible.

These Reports are made available to stimulate discussion on issues of significant importance to Europe and U.S. interests in Europe, and to transatlantic and intra-European relations.

We welcome comments and suggestions–including expression of dissenting views.

November 1999


After World War II, the idea of Europe was designed to help the nation-states of Europe overcome their limitations and their divisions. During the Cold War, and especially after the 1957 Rome Treaties, the idea grew into an institutional reality that has transformed these nation-states into member-states–members, that is, of a European Union (EU) to which 15 of them, thus far, have transferred parts of their national sovereignty.

As the EU nears its 50 th anniversary, in June 2007, its further evolution will continue to impact the transformation of its members. Conversely, however, the future transformation of the EU will also depend on the continued evolution of its principal members, with each member relying on whatever remains of its sovereignty to ensure changes that cater to the needs and aspirations of its people.

Five of the Working Papers prepared for our project on "Europe-2007" begin to map the evolution of the EU around five of its largest members: France, Germany, Great Britain, Italy, and Spain. For each of these countries, leading scholars were asked to identify and discuss identifiable trends in several vital areas: the emerging/changing facts of geography (including such factors as demography, resources, and the environment), the momentum of history (including the ability to sustain the processes of integration started during the Cold War), the economic engines (including the impact of globalization on Europe and the need for structural reforms), and the politico-cultural resistance to these trends (including the political temptation to renewed cleavages away from more recent patterns of centrism and normalcy, and the cultural resistance to "media-lization" and the universalization of languages). In addition, two other Working Papers were sought–one to introduce these trends more generally, and the other to discuss the "ever larger union" that might lie ahead in the context of the national trends thus identified.

I want to thank friends and colleagues who agreed to write these papers: Stan Burnett, Carl Lankowski, Mike Mazarr, Robin Niblett, Ron Tiersky, and Howard Wiarda. They, too, join me in thanking our friends and colleagues who made invaluable contributions to at least one of our discussions, including (but not limited to) Sam Barnes, Wolf Brueckman, Michael Calingaert, Jonathan Davidson, Karen Donfried, Michelle Egan, Steve Grand, Glen Harrison, Christopher Makins, Jim Miller, Kori Schake, Steve Szabo, John Van Oudenaren, and Sam Wells. I would also like to thank Jennifer Ober, program coordinator for European Studies, who contributed to the preparation of these reports.

This project was made possible by the generous help of the German Marshall Fund of the United States. As always, the early drafts of these Working Papers are presented in order to stimulate discussion. We encourage the readers to react and respond to these papers: directly to each author, or collectively to the CSIS Europe Program.





What should Europe be worrying about when it looks to Italy in 2007?
This question leads us to the Italian South. If the question is designed to emphasize what Europe has not yet fully realized that it should be worrying about, our focus becomes even sharper. Much of the economic and sociological generalizations applicable to northern Italy are identical or similar to the rest of prosperous Western Europe. The politics of the Italian State are indeed a thing apart. In 1999, Italy made a bold attempt to move toward a bipolarism that might have produced the sort of governmental responsibility and durability found elsewhere in the EU. However, the effort was frustrated by the South. Sicily, just one part of the Italian Mezzogiorno, is one of Italy’s largest regions, second only to Lombardy (Milan). The haunting streets of Naples, the bandits' caves of Sardinia, and the rocky, hard-scrabble villages of Calabria have great cultural distinctiveness, but they all share Sicily’s intractable political, social, and economic woes that have broken the spirit of generations of optimistic reformers, usually outsiders. Yet the Mezzogiorno contains forty percent of the population of Europe's fourth industrial power. Although there was not even a highway connecting it with the North until the 1960s, it is now a part of the new Europe.

Should Europe Worry?

There was little talk about the Italian Mezzogiorno leading up to European decision time on the common currency. The numbers that concerned everyone were national numbers. Italy's north is not just prosperous; by such calculations as productivity, it would be the most successful country (if it were a country) in Europe. Measured by per capita GDP, with Europe as a whole at 100, Germany is at 113.8, England at 106, and Lombardy at 122. By now, the Veneto may fare even better. These two regions do an excellent job of masking Sicily and Calabria, which are both in the 60s. The South, taken by itself, would have a GDP below that of Greece.

Trends are also a source of concern. Straight-line projections, however misleading they may be, are probably more valuable in Italy than elsewhere because of the character of Italian politics, at the national, regional, and local level. Italian politics is about compromise and cooperation, and its magnetic pole is at the center. Even after the events from 1992 to 1996, one of the few real detours, the old tendencies quickly reasserted themselves. This has meant that policies, and the affected parts of Italian life, have few sharp declivities. Radical changes are rare, continuity and the muffling of changes in direction are the norm, and interruptions in trend lines, when they occur, are more often the result of external factors, and less often the result of political and societal change, than elsewhere in the West.

The cruel fact is that many of the economic and social trends are working to increase the gulf between the two parts of Italy. While the dependence of the South is not decreasing, the "auto-sufficiency" of many parts of the North is increasing sharply.1

A decade ago (in 1989), there were only four "self-sufficient" regions (Lombardy, Emilia, Piedmont, and the Veneto). Today, the number of regions paying more than they receive has risen to nine (the previous four, plus Tuscany, the Marche, Lazio, Friuli, and Liguria)


This term relates strictly to taxing and spending, that is, whether a region receives more from the government than it contributes in taxes ("dependent") or pays more than it receives ("self-sufficient").

Presented at a colloquium of the Fondazione Agnelli in Turin, October 15, 1998. Reported in Marco Travaglio, "Nove regioni pronte all'autonomia fiscale," La Repubblica, October 16, 1998.3

— with all other regions in the North closing the gap. The rest of Italy was the beneficiary

of the productivity, and tax paying, of these nine regions. Lombardy remains at the head

of the list of "payers," while Calabria is the most dependent region.

There are spots of movement in the South in the direction of closing the "deficit."

Basilicata, for example, has reduced its paying-spending deficit by almost a half, largely

because of the FIAT-Melfi plant. Conditions in Calabria are strongly affected by the port

at Gioia Tauro. Built more than twenty years ago, and a prime example of a "cathedral in

the desert, " the port of Gioia Tauro was one of the monumental (in both senses) efforts to

inject some great centers of modern economic productivity and employment into the

Mezzogiorno. Most of these "cathedrals," exemplified by giant, never-productive steel

mills, now stand as true monuments, honoring grandiose and misguided government

spending. They are largely the products of political bargaining, not economic planning.


Unlike most of the other deals cut in Rome, however, Gioia Tauro is now starting to

produce and prosper.

These improvements are offset by strong trends in the wrong direction — in

Campania (Naples), for example. The overall result is the single most important factor

feeding the northern separatist movement. Admittedly, the main party of northern

separatism, the Lega Nord of Umberto Bossi, has not done well in the last two elections.


Yet, a fading Bossi phenomenon, assuming that to be the case, does not signify that the

separatist issue will go away. Bossi speaks for a large number of northerners in attacking


In 1953, Socialist leader Pietro Nenni agreed to break his party's alliance with the Communists and

strengthen the allegiance of the working class to the regime. One of his conditions for the political switch

was Rome's commitment to industrialize the South. Even before that, in 1950, a special fund for

economic development in the South, the Cassa per il Mezzogiorno, had begun funneling enormous sums



For an indication of the party's long-term weakness, see Stanton H. Burnett, "Will Italy Split in Two?"

The International Economy, July/August 1995, p. 52-53.4

Rome’s refusal to produce an effective federalism, and shape new de-centralized

institutions. These are the voices of allegedly "good" separatists, not the simple "racists,"

that other body of Northerners who do not want to co-exist with the South and its

reputedly dishonest, slothful, and inferior citizens.


Amazingly, the idea of superior

honesty in the North has survived the giant 1990s Tangentopoli (Bribe City) scandals,

largely centered in the north.


Why there are two Italies need not detain us in the context of this paper. In any

event, there is no simple or shared answer to this question. The historian Federico

Chabod laid emphasis on the allies having moved only halfway up the Italian peninsula

where they were stopped for more than eighteen months. This meant that the South spent

these months of World War II as an occupied country, while the North was able to credit

its home-grown Communist-led partisan movements with much of the liberation. Robert

Putnam sees the profound difference in civil society within Italy as stemming from the

Middle Ages, especially the Norman-Swabian centralized rule in the South, as compared

to the history of civic consciousness experienced by the North and Center during the era

of the great bourgeois city communes.


Lampedusa has forever made the Sicilian

mentality, and its particular brand of conservatism, unique for his readers, and Naples has

a distinct, and exceedingly lofty, cultural history.


Hon. Roberto Rosso, the Regional Secretary of Forza Italia for Piemonte, considered one of the most

savvy young deputies in today's Parliament, asserted in a 1997 presentation at the Center for Strategic

and International Studies, that Berlusconi's Forza Italia is supported by many separatists-at-heart,

restrained by the party's moderate leadership, but ready to burst out if Berlusconi should stumble.


The system of bribes and kick-backs was country-wide, but the exposures and scandals that brought

the First Republic to an end were essentially Northern. The southern scandals that emerged during the

Mani pulite investigations would not have been enough to destroy the five parties that (in varied

combinations) made up all post-war governing coalitions, thus razing the First Republic.


Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton

University Press, 1993), pp.122-26, 128-30.5

Without exploring the debates on cause-and-effect, the raw facts of Italy's history

over the last three centuries dramatize both the division and the way the development of

the North has masked the plight of the South. Spencer Di Scala, going back well before

unification, says of the eighteenth century agrarian reforms that "…the South suffered the

worst social and economic conditions. The reforms...had either failed or produced half-capitalistic

enterprises based on exploitation of the peasants...misery and lack of

investment...produced a harvest of social agitation...the unrest contributed to the

brigandage phenomenon..."


Industrial growth in the nineteenth century generally

occurred in areas which also had rich agricultural production, thus leaving the South

behind the North in industrialization as well. Thus, writes Di Scala, "...the southern

problem has dragged down the entire country ever since."


Di Scala notes the general European rule that "with industrialization the birth rate

decreases as living conditions improve, and emigration declines."


In Italy, however, this

"normal" formula did not hold. Thus, from unification to World War I, Italy’s

industrialization was almost entirely in the North, but the country’s birth rates stayed high

because of the South. Immigration from the South — not from the North — soared. So

Italy's overall peculiar pattern masked the fact that North and South were living separate

lives, even going in different directions, with the North able to absorb change and the

South able to resist it. Therein lies an object lesson for the Europe that applauded (with a

touch of amazement) Italy's effort to achieve the Maastricht convergence standards.

Naturally, there are strong limits to this diversity, limits that many Italians fail to


Spencer M. Di Scala, Italy: From Revolution to Republic (Boulder: Westview, 1995), p. 142.


Ibid., p. 146.


Ibid., p. 141.6

recognize. The bon mot that the fathers of the Risorgimento made Italy, and left to the

future the task of making Italians, ignores many elements of commonality and the fact that

much has now been accomplished in the making of Italians.

A key test is language. The dramatic novel (and subsequent film) Padre Padrone

was about Sards who could not speak Italian when they entered the Italian army. Indeed,

for many years NATO had to recognize that the first few weeks of military service for

conscripts from the South were not occupied, as elsewhere in the Alliance, with basic

training, but with the need, first, to study and learn some Italian. At the turn of the

century, fewer than 25 percent of the citizens of the South could read Italian, a product of

the combination of low literacy and the prevalence of dialects so distinct that Italians

considered them to be different languages.


Historians like to shock us with very high numbers of non-Italian-speakers in the

South, but the language gulf is now largely a thing of the past. Where Cavour and

Mussolini failed, Carosello has succeeded: Carosello was the half-hour bloc of well-produced

television commercials that hypnotized Italian children every night before they

went to bed. The Italian mass media have done exactly as predicted: the military has now

dropped its language training. If the trend lines for the South show a failure to move

toward European norms,


more than cultural backwardness lies behind the extraordinary

resistance to change. Rather, much of the resistance is deliberate and intended.


Ibid., p. 148.


There are exceptions. In 1998-99, for example, the growth in jobs in Puglia was better than that in

Emilia-Romagna, but not enough to make much of a dent in the overall North-South economic trends.

Puglia generally stands as an exception to the statements about the South in this paper, and is a

moderating influence on most of the economic statistics. Puglia has long performed better economically

than the other southern regions (and several northern ones) and is much less a part of the questione

meridionale. Interestingly, this has not made Puglia more "advanced" socially than the rest of the South.7

Throughout much of the 1970s and 1980s, the Sicilian regional government

employed more people in Sicily alone than were employed by the government of the

Federal Republic of Germany.


The result was the creation of a spoiled middle class that

has been living well without producing anything. This class is one of the bulwarks of

resistance to change. It does not want the interruption of its splendid situation. The

intensifying disciplines of the European Union (EU) will therefore come increasingly into

conflict with this determined resistance in the South. Organized crime will, of course,

offer the same resistance. These conservative elements, not at all convinced that their

festa è finita, are supported by a large population that is living better than it used to live.

And so we arrive at the central question. If a growth rate above three percent for

the years 1999, 2000, and 2001 could produce generally good citizen support for

incumbent governments and a willingness to move ahead with the building of Europe,

what would be the effect of a lower growth rate for those same years? The answer for the

North of Italy is likely to be the same as for France and Germany, whatever that answer

might be. Northern Italians would not be the first, or the last, to descend into the piazza

and trouble the political peace with their discontent. The EU projects an overall Italian

growth rate of only 2.1 percent in 1999, but up to 2.5 percent in 2000, compared to 2.9

per cent for the rest of Europe.


Then Treasury Minister (now President of the Republic)

Ciampi was, naturally, more optimistic. Despite a growth rate of 1.4 percent in 1998, he

projected a rate of 2.5 percent in 1999.


Although the projection is not broken down by


However, as a result of the policies of the Prodi government, public works employment in the South

has declined 6.5 percent from 1996 to 1997. Mario Centorrino, "Sud, una rivoluzione soltanto a metà," Il

Sole 24 Ore, October 5, 1998.


Projection, based on Eurostat figures, announced by the Commission October 21 and 23, 1998.


The New York Times, March 4, 1999, p. A14. The figure, uncredited in the article, is produced by

Istat, the national statistical institute. Projections announced November 4, 1998 by Treasury Minister

Carlo Azeglio Ciampi at a press conference.8

regions, it is probable that a 2.5 percent growth rate for Italy as a whole (whether for

1999 or 2000) will mean that the North will achieve the overall European growth level.

The 1998 Italian growth rate was the slowest in Europe.


The signs for achieving

even the projected 2.5 percent growth rate in 1999 are so poor that, early in the year, the

European Commission ordered Rome to revise its three-year economic plan as the only

way it could hope to meet its euro-zone commitments. It was the first admonition of its

kind ever made public by the Commission. A few months later, Italy was forced to ask the

Commission to "allow" the budget deficit to exceed the two percent target. What exactly

would have transpired had the permission not been granted is unclear.

The Italians of the Mezzogiorno, pessimistic enough to expect slow growth, and

fearful of serious change, would themselves go down into the streets if these levels were

to prevail, but they would go there to sell smuggled cigarettes — to arrangiarsi, meaning

the art of finding a way to get by.



In terms of population trends, Italy looks much like its European partners. In the

space of just a few generations the "demographic pyramid" has been turned upside down.

In little more than two generations, life expectancy in Italy has risen by about ten years, to

the current average of 78 years. And in less than one generation, the number of children-per-

woman has dropped from 2.4 to 1.5. Since demographers use 2.1 as the standard for

replacement of a population, Italy is now far beneath that standard. In 1998, for the first


James Blitz, "Italy examines poor state of economy," Financial Times, March 3, 1999, p. 2.9

time, there were more Italians over 65 than there were Italians under 15.


More important than these raw data, however, is the non-quantifiable improvement

in the level of health and activity of the older people. They look less and less like the

wizened Italian villagers who contribute to common Mediterranean stereotypes. They

own or manage a larger share of the country's resources, especially its savings, leaving a

smaller share for the young. Some Italian analysts project that the majority of those who

reach age 55 by the end of the coming decade will not retire, as the majority does now,

but continue to work for another ten to twenty years. Whether they burden the rest of the

population with longer pensions, or take jobs away from younger people, they are a threat,

especially in the South, with its very high unemployment figures. And these anziani will

be an increasingly large share of the voters.

The pensions given to many Italians upon early retirement are the unusual burden

that the Italian welfare system has been carrying. There is a very large population of

Italians who retired in their 40s and early 50s. Some jobs, like police work, are considered

dangerous, while others, such as teaching, are seen as especially taxing. But the

widespread early-out pension system is largely the product of the idea of clearing people

out of jobs in order to make room for the young. The result has been an historic (and

future) burden on the young.

A young Italian couple is not only "burdened" with parents who live longer (all

four of their parents are now more likely to be living), but the time when they take over

the family business, family farm, store, bar, and other property is much farther in the future

than before. In the Mezzogiorno, this longer delay in assuming control of the family

enterprise affects a much larger share of the population than in the North, and affects more


Luciano Gallino, "Sotto la piramide rovesciata: I giovani e la società," La Stampa, August 27, 1998.10

profoundly the couple's economic prospects.

The age at which young Italians leave their parents' home has been increasing

steadily since the early 1980s, and is projected to continue rising over the next few years.

Below the age of twenty, almost no Italians leave home. Between 20 and 24, 90.4 percent

of males and 78.1 percent of females are still with their parents. Both figures are rising.

In the 25-to-29 age groups, sixty percent of men and 34 percent of women are still at

home, both figures rising rapidly. And even between 30 and 34, 41 percent of men are at

home, and the figure for women jumps to 62 percent (failed marriages?).



current trends, more than 68 percent of Italian men between the ages of 25 and 29 will be

living with their parents in 2007.

These trends do not reflect an excess of family affection on the part of young

Italians. Nor is it just the failures who stay at home. A very large proportion of these

young people are employed. Yet, if they did not live with their parents, they probably

could not survive on bank clerk or postal employee salaries in the North and would live

miserably in the South. But living with their parents affords Italy’s young adults a lifestyle

that might include the two or three annual vacations to which they have become


An additional factor in the changing Italian population is immigration. Here Italy's

problem is most certainly Europe's problem. Seeing the difficulty is as simple as a look at

the map: to an immigration official, Italy must seem virtually all coastline. Much of the

coast is gentle and inviting. Add to this picture the probability that the Interior Ministry in

any future Center-Left government will be in the hands of a personality with a strong

commitment to human rights and humane treatment, even of illegals, and the flood-gates


"Figli 'mammoni' non lasciano casa fino a 34 anni," La Repubblica, October 6, 1998.11

seem to be open. Witness the 1998 appointment of Rosa Russo Jervolino to the Interior

Ministry by the D'Alema government. Southern Italian journalists estimate that about

forty percent of the illegal immigrants who land on southern Italian shores escape capture.

This ratio is, they report, well known among young North Africans anxious to try their


A very large part of the Africans, Kurds, Asians (who come via Turkey) and others

who succeed in landing on southern Italian shores every day are not heading for Italy.

Landfall for them is an entrance to Europe as a whole, and they will move on to Paris or

Hamburg as fast as they can. Italy's participation in the Schengen Agreement (establishing

a zone of free movement of persons among thirteen member states) was delayed

accordingly, but movement across Italian borders is now as document-free as it is in the

north. In short, with miles of easy coastline now Europe's welcoming shore, Italy is the

"preferred port of entry into the European Union."


Because much of the immigration is headed north, and also due to Italian

tolerance, this immigration has not become a political vehicle for Right-wing politicians, at

least not yet and not on the scale of, for example, the National Front in France.

Allegations that the rise of the Alleanza Nazionale (AN) is due to anti-immigrant

sentiment lack evidence and do not take account of either the strength of the AN'’s

predecessors or of the disappearance of the Christian Democratic Party in Italy.



Christian Democrats' more conservative "currents" were strongly supported in the South,

and this support had to go somewhere, presumably to the AN and (much less so than in

the North) to Berlusconi's Forza Italia. The fact is that the AN’s national leadership has


Alessandra Stanley, "Italy Is Swamped by New Waves of Boat People," The New York Times,

November 1, 1998, p. 3.


Ché Sidanius, "Immigrants in Europe: The Rise of a New Underclass," The Washington Quarterly,

Autumn 1998, p. 6.12

carefully avoided Le Pen-style rabble-rousing on the immigration issue, and has generally

behaved as a responsible conservative party.

The most important factor in keeping immigration out of Italy's political debate,

however, is the near-total focus on a single migratory flow, one that does stop in Italy.

Italy has had a long-standing connection with Albania, a focus of investment and activity

for Italy's businesses. Dangerous chaos gripping that small country (and Kosovo) has

translated into a flow of immigration that is widely viewed, especially in the North, as a

principal source of crime. The "Albanian Mafia" runs prostitutes and drugs throughout

the North, and nearly every raid, arrest, or crime of violence in the northern underworld in

1998 was reported to involve Albanians. It is a tribute either to the rock-solid control of

the South by its own crime families (Mafia in Sicily, Camorra in Naples and Campania,

'Ndrangheta in Calabria) or to the latter's organizing abilities (if they are, in fact, running

the Albanians), that this infestation does not involve the South. Currently, Albanians, with

a smattering of refugees from Kosovo and Kurdish Iraq, hit the southeastern Italian

beaches at the rate of nearly 500 on a calm night. This does not include the large traffic in

Sicily and other ports of entry for refugees sailing from North Africa. More than 10,000

refugees have been processed in the first ten months of 1999 in the province of Lecce,

which may not be the busiest province. These statistics only include the refugees who fail

to flee into the countryside upon landing. The trend points to a consistently increasing


Individual Psychology

The pessimism described by Michael Mazarr is as alive and well in the Italian

media as it is elsewhere in the West.


If the strong presence of the state in Italian radio

and television mitigates the negative sensationalism ever so slightly, the news-stand


Michael J. Mazarr, "The Pessimism Syndrome," The Washington Quarterly, Summer 1998, pp. 93-


competition among Italy's many national and big-city daily newspapers heightens it. But

this media behavior has not made pessimists out of Italians; they were there already,

probably before Guttenberg. Profoundly pessimistic realists, Italians suffer few

disappointments. Their expectations — from government, their neighbors, the weather, or

their national soccer team — are so low that, while there may be anger or cynicism,

disappointment is never openly admitted. As a result, the Italians are among the least

alienated Europeans. Having a lot of enemies, or at least living in a world where one's

common interest with one's neighbor is not recognized, means that one also has allies.

They may be few, but they are very close, and offer a nice barrier against isolation and

alienation. Attachment to family, church, and party is very serious, profound, solid.

To be sure, atomization and anomie have made their way into society in Italy as

elsewhere. The closed room with the television set on, the modern habitat of alienation, is

an increasing phenomenon in Italy too. But the pace of this movement is vastly different

in the North than in the South. That absolute alternative to alienation, isolation, and

atomization — the piazza full of people, their gossip and their opinions — endures in the

Mezzogiorno, both literally and figuratively. All the reasons for hopelessness and

suspicion indicated above are thus met with at least some mental-health antidote.


Inevitably, consideration of the psychological make-up of the Mezzogiorno leads

to the question of education. In the war against the Mafia, the great government failure

was in this area. A young anti-Mafia magistrate who compared his work to surgery said

that it was up to others to put the patient back on his feet. By this he meant, specifically,

education and re-education. "An effective school, capable of shaping and re-awakening

the conscience, is a truly formidable weapon in the struggle against the Mafia and

illegality; the Mafia doesn't fear a prison as much as a school, it doesn't fear a judge as14

much as a teacher."


If the magistrates at the front line of the struggle against the Mafia feel that the

State has let them down at the lower levels of education — where fundamental literacy,

character-formation, and preparation for citizenship take place — other challenges await at

higher academic levels. The reputed Italian weakness in aspects of technical training is

just part of the problem of education. Italians, even at the highest levels of government,

diplomacy, and (less so) international business are notoriously weak in their ability to use

foreign languages. For many years, special translations had to be arranged at NATO

headquarters for the Italian participant in the Alliance's semi-annual meetings of foreign

and defense ministers. While the Turkish, Norwegian, and Greek ministers had no trouble

with a choice between English and French, the Italian ministers (a considerable parade of

Italian political leaders, given the short life of governments) often spoke neither. A further

element of parochialism has been the fact that, since the war, Italy has consistently lagged

behind the other major European powers in the willingness of its scholars in the social

sciences and humanities to study abroad. One crucial culprit is the "baronial" system of

powerful professors surrounded by acolytes (graduate students and young instructors)

who dare not be out of the picture for a year because they would suffer a competitive

disadvantage among the baron's troop of followers, perhaps missing out on a job opening.

Education is both cause and effect when examining the lagging Mezzogiorno.

Only one out of ten college graduates in the North are unemployed, as compared to one

out of three in the South.


The incentive for going to the university is lower in the South;


Vaccara, "Il coraggio del dovere," Oggi7, November 10, 1997, p. 9. The magistrate Massimo Russo

adds that Mori, the legendary magistrate sent out by Mussolini to clean up the Mafia, had exactly the

same opinion.


SVIMEZ 1999 Report on the Economy of the South, Rome, July 15, 1999. Reports by SVIMEZ, the

Association for Industrial Development in the Mezzogiorno, are considered very reliable.15

the incentive for graduating, as compared with simply "parking" at the university, is much

lower. According to SVIMEZ, a typical young Southerner believes that neither a

university diploma nor a doctorate will open the doors of employment.


In fact, fifty

percent of northern college graduates find work in the first year, while only 22 percent of

southerners succeed. The age at which the first job is garnered is four years higher in the

South than in the North. The incentive is to stay in school: of those who graduated at 24

or younger, in the South, 65 percent are unemployed (25.8 percent in the Center and

North), but the ratio is cut in half for those graduating at an older age.

Education has long widened the North-South gulf in Italy. After unification, many

areas of the South were slow to start replacing the local dialect with Italian. The problem,

however, was not that teachers used local dialects; the problem was empty classrooms or

no classrooms at all. The first truly national effort on education focused on secondary

schools for the upper classes, and at getting the Church out of the classroom. Towns and

villages were left to their own resources to provide a required two years of elementary

education. Most southern towns failed to come up with the resources to do anything.

They would submit records claiming elementary school attendance, but most towns

preferred to have the children work the land.


Although the South lagged badly, literacy

made enough progress in the cities throughout the country in the second half of the

nineteenth century to leave the deepest pockets of hard-core illiteracy in villages and rural

areas. Nonetheless, according to Di Scala, "the quality of elementary education and

attendance remained low, and the formulas for distribution of the funds helped the richer

North and worked against the South."



"Al Sud un laureato su tre senza lavoro, al Nord uno su dieci, " ANSA dispatch, July 15, 1999.


Di Scala, op.cit., pp. 148-9.


Ibid., p. 142.16

Mussolini failed to make the schools effective machines for turning out young

fascists, but he did tighten up graduation examinations and enhanced technical education

as an alternative to the classical model. However, it is television, more than the

governments of the recently-unified state or the Fascists, that has implanted one common

language in all of Italy. In the 1960s, the democratizing of the universities produced many

difficulties (impossible over-crowding, "professional students" parked for many years in a

comfortable university life, some periods of political chaos on campus), but it probably

had an enormous boot-strap effect for the sons and daughters of the less-privileged.

Women especially benefited from the changes in the university system’s liberalization, for

the reform led to a dramatic increase in the number of Italian women with university and

post-graduate degrees. Nonetheless, many Italians (along with many Frenchmen) still feel

that their country suffers a competitive disadvantage in the new Europe because of the

space occupied by classical, rather than technical, education.

Tribalism and Globalism

Even in the context of increasingly global connections and transactions, Italy

suffers from the weakness of the nation-state’s appeal as a loyalty-attracting tribal base.

What this means to the northerner and the southerner is different, but no country in the

new Europe has fewer problems with any transfer of loyalties to Brussels, or more

problems with making sense out of the jungle of attachments of its citizens. "As for the

Italians, luck would have it that they are the most European of the Europeans exactly

because 'the making of Italians' is an unfinished task. Our flexible nationalism, if you can

call it that, appears, in this phase of history, finally to be an advantage, not a handicap."


For many in the North, the denial of Italian identity has translated into an


Giorgio Lago, "Questo Stato, ecco l'unico grande nemico," La Repubblica, March 12, 1998, p. 38.17

important political program. The most prominent manifestation of this denial is Umberto

Bossi's Northern League. Although the Lega sometimes wanders off into comic opera, its

support is still large enough to make it the first- or second-largest party in many towns and

provinces throughout the North. More importantly, the cities and towns where the Lega

is doing well are among the richest and most productive in Italy. Indeed, the factor that

most limits the growth of the Northern League, its influence with other parties and

separatist groups, and its ability to form alliances, may be Bossi himself.


A wide variety

of separatists from the Veneto, from respectable members of the long-standing Venetian

League to the romantics responsible for the 1997 storming of the Campanile in Piazza San

Marco in Venice, have an erratic relationship with the Northern League (which they

largely equate with the Lombard League), and so the fragmentation may go on in the


The northern malcontents share a common view of the South. A geography

professor (and convinced Leghista) at the University of Milan declares that the difference

between North and South is between those who descend from the Carolingians and those

who descend from Arab emirates. He writes, "The spoken language, the memories, the

social relations, the institutions and power relationships - these are elements of division

much more than convergence."


Although, the scandals of Tangentopoli were focused on

Milan and the North, the Lombards, Venetians, Piedmontese and others persist in claiming

a monopoly on industry, honesty, and other virtues. They distinguish themselves from

those impecunious, slothful Southern thieves who, through their middle-men in Rome,

take the fruits of northern labor and spend it with southern license. The good news for the

future is that some of these northerners thirst to be governed by Brussels rather than


For the development of this argument, see Burnett, "Will Italy Split in Two?" op. cit., pp. 52-53.


Roberto Mainardi, L'Italia delle Regioni: Il Nord e la Padania (Milan: Mondadori, 1998). Cited in


Rome. The bad news is that most of them do not want to be governed at all, and are

bound to lead the first wave of protests, whenever it comes, against the "arrogant

spendthrifts of Brussels."

In the South, many of the older citizens still see the Italian Republic as little more

than the invasion, and continued occupation, by the rulers of Piedmont and their northern

allies. Some identify with their region.


Many identify with their city, town, or village.

This is the Italians' famed and very real excessive attachment to one's town of birth

(campanelismo). But Edward Banfield and Robert Putnam, a quarter of a century apart,

have tried to show that identification with village or town is feeble to the point of non-existence

by comparison with familismo. Banfield portrays a Hobbesian war of each

family against all other families, in which no appeal to the common good will permits even

minimal cooperation with one's neighbor. Better to leave the fountain broken than to

repair it and have the neighbor also enjoy the benefits of a working fountain.


A most important step in changing local loyalties and politics has come with direct

election of mayors. This has now been followed by the direct election of the Regional and

Provincial Presidents. In such unlikely places as Catania and Naples, this change has led to


The old movement for Sicilian separatism was serious politics immediately after World War II, but is

now discredited. A separatist movement remains active in Sardinia. In general, however, SVIMEZ

concluded last year that "from the Mezzogiorno regionalist demands are not heard today..." SVIMEZ, p.



Edward C.Banfield, The Moral Basis of a Backward Society (New York: Macmillian, 1967), and

Robert D. Putnam, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton

U. Press, 1993). Filippo Sabetti has powerfully contested Banfield on methodological grounds and

argues that disincentives created by government (at several levels) are sufficient explanation for the

fountain's perpetual disrepair. In "A Different Way of Knowing: The real 'Montegrano,'" Italian Politics

and Society, the Newsletter of the Conference Group on Italian Politics and Society, No. 4,4, Fall 1995,

pp. 18-25.19

vigorous and effective performances by elected mayors, with the result that all the mayors

of major Italian cities were re-elected after the reform, with the sole exception of the

Leghista (Northern League) mayor of Milan.

The political party also competes for allegiances. The great Italian political parties

of the First Republic claimed more than just a vote. They sought to occupy so many

aspects of their adherents' lives and thought that they bore some similarity to totalitarian

parties. After all, Italy had furnished the modern model of the latter. The assertion by

political scientists (in this case, with little debate or disagreement) that the First Republic

was a partitocrazia meant, in effect, that the parties occupied the State. Loyalty to party

detracted strongly from all other competing loyalties. To be a Communist, Socialist, or

Christian Democrat was more important than to be an Italian. The parties' dependence on

patronage and clientelismo meant that they furnished a life for their followers, gave them

membership in a supportive tribe, did far more than simply ask for their votes in an open

competition of programs and candidates. In the South especially, where the supposed

secrecy of the ballot provides little cover in many communities, the employment of one

person is supposed to bring with it the votes of the whole extended family. Loyalty means

wheeling grandpa into the voting booth.

Economic Liberalization

In two areas, Italy is in line with the European movement toward economic

liberalization: its North and its rhetoric. The Italian Communist Party (PCI), even before

its transformation into the Democratic Party of the Left (PDS), had begun to declare itself

in favor of privatizing some parts of the mammoth semi-national business enterprise. This

was, in fact, one of the reasons for the split in the PCI that resulted in the independent

existence of a Refounded Communist Party (which has itself split, over whether to support

a PDS-dominated government and its very middle-of-the-road budget proposal).20

Romano Prodi, who had himself served twice as CEO of Italy’s largest state

holding company IRI (the Institute for Industrial Reconstruction), was clearly committed

to liberalization. Nevertheless, he toted the burden of an alliance of parties with quite

varying views on the subject, with the necessity of keeping the Refounded Communists on

board in the lower house of the parliament, where their votes were essential. Prodi's initial

declaration that "we are going to take this country apart piece by piece" faded rapidly

before the challenge that made his tenure a one-issue era.


Liberalization, both in the

economy and throughout Italian society, took a step forward only when it served to meet

the Maastricht criteria of convergence for inclusion in the common currency. The fact that

Romano Prodi endured for a relatively long term is itself a European story. He was so

intense about devoting his government to Italy’s acceptance into the European common

currency that normally-important areas of neglect or failure were temporarily forgiven.

Toward the end of his government, some of Prodi's ministers grew weary of this narrow

focus. Interior Minister Giorgio Napolitano, probably the most prestigious internationally

among the "post-Communists," publicly called on the government to devote the same

attention to the Mezzogiorno that it had devoted to the Maastricht standards, leading to a

lively debate within the majority.

Just as Prodi gave liberalization and privatization secondary status to the grand

objective of Europe, so too the D'Alema government may be expected to put these

concerns no higher than a secondary level of priority in the general area of the Italian

economy. As a sign of good faith, the new D'Alema government announced plans for the

privatization of the Banca Nazionale di Lavoro on the second day of its existence

(October 27, 1998). Two weeks later, on November 10, it announced a five-year plan to

privatize much of Italy’s electric utilities. (The first piece — about 25 percent — of the

electricity giant ENEL went on sale on October 13, 1999.) This announcement appeared


Cited in John Hooper, "A New Italian Renaissance?" The Wilson Quarterly, Spring 1998, p. 70.21

to satisfy the European deadline (February 19, 1999) for implementing the EU's electricity

directive. Although the rhetoric exceeded the action, there is little reason to doubt the

acceptance of the idea, among the Center-Left, that the days of the giant state holding

companies dominating much of the Italian economy are numbered. But it is difficult to let

go: these enterprises have furnished more in the way of illicit political party funding and

excellent patronage jobs than the government bureaucracy itself.

Because D'Alema and his party colleagues grew up politically within the PCI

apparatus, they must put some other considerations first. Thus, D'Alema's inaugural

speech to the parliament underscored the problem of disadvantaged young people. This

was not a simple appeal for more jobs, but a class-based appeal for equal opportunity. He

was putting his finger on a major problem in Italy, especially in the South: opportunity

based, not on merit, but on connections. In the 1960s, Italy made a university education

available to all. This, as it turned out, did not produce anything even close to equal

opportunity. The jobs for graduates still went, in large part, to those with connections.

Whatever the importance of liberalization to the new government, the cold fact is

that the political incentives to reform the Italian economy are very slight. The counter-pressures

(mainly patronage jobs in a system that has long lived by a system of

clientelismo) are very strong. It is only through indirect action (lower taxes, fewer

scandals, more rewards for merit among the young) that real forward progress can be

made — dependant, of course, on the true personal convictions of Italy’s political leaders.

Romano Prodi and the opposition leader Silvio Berlusconi are clearly sincere liberalizers.22


Lavoro Nero

The South is economically different in three respects, all of which pose great

problems for Europe and Italy. First, there is the very large public sector, already noted

above. A second factor is both the inability and, in some sectors, the unwillingness, to

adapt to pressures, from Rome and especially from outside Italy, for economic

liberalization. The failure to adapt, plus the reduced availability of labor migration to

mitigate the problem, is clearly an explosive combination. But the third factor, somewhat

alleviating the second, is the existence of a far vaster private sector than ever shows up in

the economic statistics. The size of the lavoro nero sector and the black market in the

South clearly exceeds that of any other EU region, a fact that can now be persuasively

demonstrated. According to Italstat, the most reliable source of national economic

statistics, "black" labor in the Mezzogiorno amounted to an even fifty percent of all "jobs"

by the end of 1998.


Six months later, Italstat raised its figure to 51 percent. The figure

for the North was bad enough — 31.5 percent — but more in line with other Mediterranean

EU countries.


For any projection toward 2007, however, it is the trend that must be

noted. Italstat found that the gap between North and South was growing continually

wider. Indeed, when actual laborers were counted (rather than jobs), the South's

percentage was double that of the North and Center.

These raw figures require a closer look, because one economist's analysis of

Calabria found low pay, high unemployment, and a very high level of consumer


Announced to the press on December 16, 1998 and carried on RAI-TV (TG-1).


Presented at CNEL and reported by AGA on June 4, 1999.23



In 1994, the government insurance agency placed the number of business

enterprises in Calabria at 23,758, while Istat, carrying out the 1996 census, found about

90,000 businesses in the same region. The economist Domenico Marino concluded, on

the basis of 4,000 interviews in Calabria, that 75 percent of the Calabrian work force

would refuse a fairly low-paying job, despite a very high official level of unemployment.

In Calabria, with its dire employment figures, 84 percent of the families own their own



What such anomalies must mean is that real income in Calabria is far higher than

what is "on the books." Many among the vast numbers of officially unemployed are, in

fact, partly or fully employed.


They are earning no social benefits, but they are earning

the daily lire that keep their families afloat.

The "black labor" sector extends from the serious underworld, through a grey

demi-monde, to work in which society has a genuine interest. Movement along this

spectrum starts with those who are directly employed by organized crime. Much is known

about this life from the parade of Mafia pentiti who decided to turn state's evidence,

supposedly because they repented. Surrounding the actual soldiers of a don are hordes of

young men who run errands, perform chores, know little, and probably aspire to be

genuine mafiosi themselves some day. Beyond organized crime’s serious troops are a

number of minions performing labor-intensive lavoro nero. They are the young,

"ambulant" vendors who offer the most popular brands of American and French cigarettes

throughout, for example, the major cities of the South. These cigarettes have been

smuggled into Italy, avoiding heavy taxes, for this enterprising sales force.


AGA interview with Domenico Marino of the University of Messina, June 4, 1999.


Monica Diamanti, "Il Rapporto Cnel sul lavoro sommerso," AGA dispatch, June 4, 1999.


Or, in many cases, they are employed for a part of the year, in seasonal labor (especially in

agriculture), and then go on the unemployment roles for the rest of the year.24

In this same place on the spectrum are thousands of omini — literally "little men"


— throughout Rome and the South (with a good sprinkling in the North), who have no

official status. With the purchase of a small, billed cap, they become parking attendants.

Parking in central Rome or Naples demands a deal with the omini, who wave cars into

spots in "their" piazza, providing a parking spot that would not have been otherwise

found. Because of the omini, the car will be safe from vandals, and, although the parking

space is likely to be illegal, the traffic police (vigili urbani) will not issue a ticket since

they also deal with the omini.

Omini also lounge around all important government offices where a citizen pays a

bill or gets the necessary documents to build a vacation house or take a professional

examination. Some of these transactions require multiple stops at multiple agencies.

Citizens who value their time and sanity and want to be sure of success in the transaction,

would not think of standing in the long lines themselves. Rather, they will turn the most

precious personal documents over to one of the loitering omini who will sail through the

bureaucracy. What would have taken two months to come through will arrive in a week.

The omini will navigate a line that looks to be a four-hour marathon in a few minutes.

Moreover, all decisions will be favorable. Like the vigili urbani, the bureaucrats are

business partners of the omini. This is another excellent investment.

The Berlusconi and Prodi governments already showed signs that Italian political

leaders have now realized that this is not the style of the new Europe. Certain documents

that once needed a seal from a bureaucrat now only need the citizen’s signature. But this

grand category of black labor, the omini, is probably not yet seriously threatened.


Omino is a very general termed, not used everywhere. More exact, but pedestrian, is posteggiatore

abusivo (illicit car park attendant). In Sicily, a more precise and dignified term (than omini) is used:

spirugghia faccende. Translated into Italian, it becomes sbriga faccende and means, to put the best face

on it, "business expeditor."25

Naples may be the largest center of glove manufacture in the West. But there are

no glove factories in the Naples phone book, just large rooms, often in basements, filled

with black-clad women sewing gloves. In other such rooms are rows of women with

cardboard and wires, soldering circuitry. This is not some sinister toy company, but a sub-contractor

of a major multinational, existing entirely via "black" labor. And, of course, the

government bureaucrats who put in half a day at their official agency and half a day

running their own trattoria, or tobacco shop, or bar, are a major reason for the

excruciatingly slow and frustrating experience citizens would suffer if they did not rely on

omini. Equally numerous are those who keep applications for employment alive (and

always unsuccessful) at ministries, with the carabinieri, with the forest service, etc.,

thereby qualifying for the dole, while actually running their own business, or being

gainfully employed by a firm only too happy to avoid a big benefits package.

These scenes scarcely tell how widespread and how "respectable" some lavoro

nero is. Baby-sitters in resort areas give vacationers freedom to go spend money. In fact,

many of the services offered at vacation resorts are lavoro nero. School teachers

supplement their income by giving private lessons. Students facing important

examinations or having trouble in one subject or can simply afford an extra advantage, buy

private lessons from a working school teacher. These teachers might have been unable to

join or stay in the profession without this extra income. In 1995, 2,500 teachers graduated

in Italy. By the middle of 1998, only 900 of them had found any work whatsoever during

the three years after graduation.


Presumably, many are surviving through private


A very large part of the South's hidden labor is made up of entrepreneurs,


Government announcement carried on RAI-TV's TG1, August 18, 1998.26

sometimes also employing black labor, and existing themselves outside official

recognition, taxation, protection, control, or counting. A recent analysis concludes that

"there exists in several zones of the Mezzogiorno a whole fabric of small and very small

businesses that escape every census, but that work and make profits, share among

themselves a serious level of production, export to other regions [of Italy] and abroad."


A map of the South’s submerged economy shows a series of ink blots in every region,

"where work is done without any controls, safe from the tax collector but not safe from

accidents and injuries, usually in violation of a number of laws [governing commercial

outlets, working conditions, etc.], totally outside official cognizance."

Every year brings plans either to stamp out or to "regularize" the South's

submerged economy. But a professor of political economy at the University of Naples

warns to go slow: "if we observe these initiatives carefully the image of a Mezzogiorno

that is forever the panhandler does not seem to be confirmed. What confronts us is a

creeping vitality, almost a new frontier."


According to Professor Meldolesi, the

submerged economy is several times bigger than officially estimated. Those who have

taken issue with such a "finding" believe that the submerged economy is a blind alley,

perpetuating the poorest industries, surviving only by competing with poorer countries

whose workers are even poorer, countries with no effective laws on job safety or



The debate between those who laud southern vigor and the capacity to arrangiarsi

and those who are unconvinced that this submerged economy can provide any durable


Francesco Erbani, "Mezzogiorno storie dal sottosuolo," La Repubblica, March 12, 1998, p. 43.


Luca Meldolesi, Dalla parte del Sud (Bari: Laterza, 1998).


One economist suggests that the greatest area of competition with the submerged economy of the

Mezzogiorno comes from Romania.27

benefit for the South asks what would happen if this broad economy were brought into

contact with the light of official recognition. Some say that it would fade like the frescoes

in Fellini's Roma. But Meldolesi and other economists fear that, in the case of the more

successful businesses, the State must arrive soon, or the Camorra (or Mafia, or other

crime families) will succeed in controlling the entire sector.

In most cases, "black" workers suffer no risk from the State. Controls on black

labor are few and not enforced. Yet they live dangerously. They work — sometimes doing

heavy and dangerous work — with no social net, no pensions (other than the minimal social

security that everybody gets), no other welfare assistance, no protection at the work place,

and no control over labor conditions. The State is nowhere present in their lives, as either

law-enforcer or protector.

This massive sector skews all the statistics. It means that the GDP for the Italian

South (and for Italy as a whole) is far from accurate. And the unemployment figures do

not reflect reality. Italy's overall 12 percent unemployment is really much lower than that

in the North, since it is nearing 23 percent in the South.


Brussels is trying to get a

statistical handle on lavoro nero. Whether greater knowledge of its dimensions will lead

to some reforms is hard to guess. But the cruelest factor that any reformer would face is

the undoubtedly high level of dependence of families in the Mezzogiorno on this

clandestine labor, and the great hardship they would suffer without it. If any European

trend develops toward "regularizing" black labor, its most massive resistance will come

from the Italian South.

Labor Mobility

Labor mobility — a central element in any discussion of economic liberalization in


Sergio Lucino, "Senza Stato il sommerso dilaga," La Repubblica, August 26, 1998.28

Italy — applies especially to the North-South phenomenon. Under-employment is

prominent in many important economic sectors in the North as confirmed by the want ads

found in all northern newspapers. Meanwhile, unemployment in the South is the highest

of any major European region. A similar situation in the middle of this century triggered

the great migration that logic would suggest. After the rapidly expanding northern

industrial sector had met its first post-war needs by recruiting workers from its own

countryside, the great migration from south to north took place. (It was, in fact, just the

post-war version of the earlier generations' great migration to America: except for a tiny

minority, the Italian-American community is a community of [former] southern Italians.)

Yet, despite the northern lure and despite unemployment running at 22 percent for

young people in the South and much worse in many areas, northern migration had slowed

to a trickle. As observed in a 1998 SVIMEZ report, the "territorial labor mobility from

the South to the North...is rather modest and limited almost exclusively to young people

having the highest levels of education, of technical qualifications and of family income."


This suggests that technological change in the North is the reason why the northern

migration stopped: as work in the north became more demanding technologically,

southern education and technical training did not keep up, and southerners ceased to be

qualified for the jobs available in the marketplace.

Other factors are also at work, however. Many of the available jobs in the North

do not involve advanced technology or require strong education. Notable improvement in

the standard of living in the South has carried its citizens over the desperation threshold,

leaving even young southerners reluctant to leave. Tens of thousands of them could find

work in the north, especially in Lombardy and the Veneto, but instead they appear

determined, against the odds, to find employment where they are. Leaving the South for a


SVIMEZ, Rapporto 1998 sull'Economia del Mezzogiorno (Bologna: Il Mulino, 1998), p. 18-19.29

little shared room in Treviso or Sesto San Giovanni would be to abandon important

comforts such as the family car or the nearby, affordable disco. Dan Spikes, a careful

observer of the Mezzogiorno, reports that over three years in Naples he did not find a

single person, outside the professional classes, who would agree to live anywhere else.


Potential émigrés, including some who have already tested the water in the north, are

convinced they would confront strong anti-southern prejudices.

This remarkable defiance of the normal laws of economic mobility is now showing

signs of weakening, however. It is too early to speak of a new trend, but 1998 saw, once

again, an army of Southerners — some 88,000 — packing their bags to look for work in the



Showing the extent to which this apparent wave is a product of the gulf between

North and South in Italy, seventy percent of the émigrés are heading for northern Italy.

As one would expect, the places of highest unemployment are those of highest emigration.

It is the first swing in this direction in thirty years.

But before this is seen as the end of the stay-at-home era, its size and its local

character must be noted: there is no movement from Abruzzo and almost none from Sicily

as a whole or from Puglia. Between 1952 and 1974, an average of 240,000 people a year

headed north for work, almost three times the 1998 bulge. The new émigrés are younger

than those who made up the big wave: sixty percent of the 1998 total were between

twenty and thirty years old.

Despite its limited character, the 1998 emigration affects the Southern population

more profoundly than would have been the case in the past because of the steep decline in


Spikes, now running the Fulbright program for Europe, spent the last three years as chief of the USIS

operation in Naples, and had much previous experience in Italy. Spikes agrees that this is a new

phenomenon among southern young people.


"Nel Sud si torna a emigrare," Il Giornale, June 2, 1999, p. 20.30

birth rates. Thus, for the first time in 30 years, the population of the Mezzogiorno

declined slightly in 1998. The 1998 wave was probably driven both by very high

unemployment and by declining salaries (and a widening gap vis-a-vis the North). Salaries

in the Mezzogiorno, which stood at 59.9 percent of the Northern average, plunged that

year to 54.8 percent.

Even with the strength of the black labor sector, unemployment is the real culprit,

rising from 22.2 percent in 1997 to 22.8 percent in 1998 with the number of unemployed

rising in twenty of the South's 36 major cities.


When Italian cities are ranked according

to their level of unemployment, the worst thirty are all southern. The "champion" city is

Enna, right in the middle of Sicily, with 35.3 percent unemployment (while some cities in

the North are below three percent). In Naples, the biggest city in the South, the

unemployment rate actually fell, but the total number of unemployed people (311,200) is

still more than the entire northeast of the country.

Nevertheless, the July 1999 SVIMEZ report provides confirmation of the stay-at-home

phenomenon and its reasons, rather than any confirmation of a broad return to

emigration from the South. SVIMEZ's findings indicating widespread southern refusal to

take jobs in the North led journalists to try to find some of those jobs, and some of those

recalcitrant Southerners. They had no trouble finding northern businesses aggressively

(even desperately) seeking employees and failing to fill their job slots.


The northern

pasta-maker Barilla, seeking forty employees under age 32, could find few takers in the

South. A leading national food-distribution company, Ticket Restaurant, had the same

failure. For two months it sought fifty new employees under thirty years old and failed to




"Al Sud disoccupazione cronica," La Repubblica, July 16, 1999, p. 29.31

find them in the South.


The news service ANSA followed up on the SVIMEZ report by finding some of

the southerners who had refused good opportunities in the North.


A big transport firm

(Vaccari) near Padua contacted 150 unemployed truck drivers in Palermo and Catania

offering safe and permanent positions with salaries comparable to those of low-level

managers (about $24,000 a year) and with company housing offered for minimal rent

($160-180 a month). These were not bad and dangerous jobs that only immigrants take: it

was all day-time work within the province (no long-distance hauls).


The offer was so

good that it received a lot of attention right at the moment of jobless protests throughout

the South. Although the 150 drivers contacted had registered with the state employment

agency and although all had the necessary qualifications, all declined the job offer.


ANSA interviewed an unemployed Sicilian driver, a family man who felt that even with the

excellent salary his wife might have to work because of his belief that living in the North

would be so expensive. Another unemployed driver from near Palermo said that his

daughter was too attached to her grandmother for him to consider the move. Others

mentioned the bad weather in the North, but a little probing by the interviewer revealed

that most of the men were probably making an economic calculation. Their "occasional

work" in Sicily and Catania, compared with the expenses and taxes of the northern job, led

them to decide to stay in the South. Presumably, taxes were not a factor when they


Actually, the firm had two acceptances from Naples, but one of these quit after a few days. These

latter were not blue-collar jobs. They were in sales, with expense accounts and guaranteed salary plus

incentives. AGA dispatch, July 16, 1999.


"Rifiuta lavoro al Nord, '4 milioni non bastano, la vita è cara,'" ANSA dispatch of July 16, 1999.


Details of the jobs in Alessandra Carini, "Meglio senza lavoro che autista al Nord," La Repubblica,

July 16, p. 29.


The firm admitted that, toward the end, it was so discouraged by the results that it skimmed the last

few rather than making a serious effort to get them on board.32

worked in the South. This calculation reinforces the impression that life is much better in

the South than it was in the years of great emigration. One driver said "I make less

money, but at least I can keep on living in my homeland."


Political and Financial Trends

Economic and social trends in the Mezzogiorno have a greater importance today

because its citizens are likely to stay there. Any improvement of their condition will come

through improvement in the South itself, not through simply getting out. The political

meaning of the fact that Southerners are no longer migrating en masse is that the great

safety valve preventing southern discontent from causing much serious political trouble is

now clogged. One result is the success of local politicians who offer hope for change,

sometimes a demagogic false hope. That is not the way politics worked in the South up to

now, but it will become a more important phenomenon during the next ten years, and it

may cause trouble for Rome and Brussels.

Especially dreaded in the South is any serious effort to follow the line of Jacques

Delors and many European socialists to bring national legislation affecting employment

conditions into line throughout Europe. Seen as an effort by the richer countries (and

northern Italians) to neutralize the South's competitive advantage, many southerners and

northern liberals believe that the resultant drying up of southern employment would cause

exactly the type of migration the measures were partly designed to prevent.


Salary disparity is certainly necessary to offset a crucial investment disincentive in

the Mezzogiorno. Sicilian entrepreneurs estimate that, other factors being equal, the rate


"Rifiuta lavoro al Nord, '4 milioni non bastano, la vita è cara.'"


See, for example, Piero Ostellino, "La Scelta necessaria," Corriere della Sera, July 30, 1998, pp. 1-2.33

for a business loan in Sicily will be five-to-six points above the national average.



higher cost of money in the Mezzogiorno is caused partly by the chaotic and outmoded

structure of southern banks, and partly by what northern banks insist is a lack of rational

management. The rates are, of course, affected by the apparently much greater risk in the

South. Relative to the 1970s, the risk of bad loans doubled in the 1980s and tripled in the

1990s. In 1993, the Center and North of Italy had a bad loan risk rate of 6.9 percent

compared with 15.9 percent in the South. By 1995, the rates were 7.2 percent in the

North and 22.7 percent in the South, and they had climbed to 25.3 percent in 1996, while

the northern rate declined to 6.9 percent. In Sicily, where "non-economic factors" may be

strongest, the risk of bad loans was 36.9 percent. Although it cannot be demonstrated, it

seems likely that a large number of the loans that were made were based on connections,

friendship, and pressure rather than rational business calculations.

At the same time, small- and medium-sized businesses in the Mezzogiorno have

great difficulty in obtaining loans at decent rates. A recent study showed, however, that,

more than in the North, many of these enterprises do not really merit much investment of

confidence, for they "combine the elements of production in an inefficient way, they target

only a closed little local market, they have low technology of a non-innovative character,

with little push to exports."


The study finds many of the bank-client relationships to be

"inappropriate," with the bank having connections to local businesses that make them

partners (if not family members) rather than participants in a normal bank loan. It also

found a much higher percentage of loans going not to support the first steps into new

markets, but instead to prolong the life of non-viable enterprises "that can already be

defined as outside the market."


Albegiani, op. cit., p. 1.


Salvatore Butera, Il Mezzogiorno tra passato e futuro (Brescia: Queriniana, 1998), pp. 81-83.34

Change in Business Organization and Practice

Italy is not a place to which most people look for break-through innovations in

business practice. Italy’s conventional stereotype of Italian business evokes family

businesses in their most traditional family-grocer form, and massive businesses that are

creatures of the state and lack the incentive for innovation because they lack true

responsibility before stockholders. Yet, Italian design and technical innovation was as

much a part of the post-war "economic miracle" as were auto companies that benefited

from protectionism. In today’s Italy, the "family business" has also come to mean


Most innovative and interesting, and most important as possible bellwethers, are

some of the Italian "industrial districts." Especially in Tuscany and the Veneto, relatively

small industries that are related to each other in the manufacturing process have gathered

around mid-sized towns in some of the most effective symbiotic relationships found

anywhere in European industry. So, for example, Pistoia, on the Arno plain west of

Florence, has grabbed an important niche of the textile industry, including the conversion

of rags into blankets and fabrics for high fashion. In these districts, many of the individual

entrepreneurs are related by family, or at least long association, to the others. The owner

of a textile factory, needing both an assured and economical source of dyes, and a good

business opportunity for his son, will set his son up in business, nearby, making the dyes

the textile factory needs. The dyes may also be marketed elsewhere, but the dye works

have a clear number one customer. Both businesses can count on each other to retain the

profitability of the entire process, and the heavy transportation costs paid elsewhere to

move materials that are part of the manufacturing process are drastically cut. The barrels

of dye are moved across the street on hand-carts. Meanwhile, the advertising agency

creating campaigns for the textiles may have only one client, may be located just down the

block, and may have a CEO with the same family name.35

The success many of the Italian industrial districts have enjoyed at keeping labor

unions out and, thereby, obtaining the labor flexibility they need is remarkable. Workers in

the Pistoia plants have no contracts, and no assured number of hours per week. They stay

home during business slow-downs, and they work long hours whenever necessary. This

miraculous docility appears to come from the provision, by the companies, of excellent

wages for the time actually worked, and many benefits that are better than those

elsewhere. A good clinic and hospital available to the workers are frequent features of the

districts, something none of the individual companies could afford to provide.

The success of these industrial districts has pulled many of the companies out of

the flow of business change. They are not searching for alliances; they are, on a modest

level, creating them. And they are staying away from alliances with enterprises that are

unrelated to their own manufacturing and marketing processes. The hierarchies of these

businesses are relatively rigid and, in many cases, employees have, in exchange for

significant material benefits, taken a step back in their role with the companies.

In the South one has, both ideally and normally, some "special" relationship,

preferably family, not just with suppliers and clients (and, as noted above, bankers), but

also with local government officials who are important to business. Further, there are

relationships with the competition. So contracts are frequently not won or lost, but

cooperative solutions are found in which there are no real losers. It would be a stretch to

see this as some home-spun version of modern monopoly capitalism. Clearly, then, in

much of the Mezzogiorno, true business competition is no more appreciated than true

political competition.

Will enhanced European competition force these enterprises to change their ways?

The number of businesses in the South, excluding Puglia, intending to compete on

anything but a local level is very limited. What does happen, then, to the owner of a half-36

dozen local groceries in Palermo when a European super market chain comes in? The

dramatic answer would be that the chain had better hire good security forces. But the true

answer is that the chain, too, will find it to its advantage to strike some sort of bargain

assuring, for example, that on some product lines the local stores will not be undersold

and thus assure there will be no serious losers.


Over the last fifteen years, a number of analysts have reached a point of despair

about southern industry and have suggested that the Italian Mezzogiorno might skip over

the phase of industrialization and go directly to an (undefined) service-sector role. Others

have felt that hope lies in joint ventures between small- and medium-sized firms in the

North and South. Such ideas, often rendered without much conviction, seem to ignore

both the success stories that do exist in the area of home-grown industry and the more

broadly attractive alternative of waiting until the government does something.

The South’s Finances

The regional governments of the South face truly intimidating challenges over the

next eight years, which means, in some measure, that Europe faces this problem too. The

best available figures are for Sicily. Essentially, they show that the region is bankrupt but

keeps spending. With no money in the regional treasury, officials still travel, commission

fancy studies, and support moribund agencies, all out of Palermo's splendid Palazzo

d'Orleans, a symbol of the profligacy of Sicily's rulers. The ninety members of the regional

assembly earn the same salary as senators in Rome. A staff of 200 keeps the assembly

going, with parliamentary ushers earning over $40,000 a year. The deficit is so great that

a feverish search for new loans has sent regional officials to Switzerland and the United

States. As described by an official of the regional presidency, "The region has now arrived

at the point of no return…Nobody is facing the need for reform and, instead, one spends:


This is the pattern already established with the arrival of La Standa and other big Italian chains.37

startling spending, discretional spending, client-based spending, not based on any program

criterion. And all this is happening when there's not a lira left in the treasury."


In the last few months, as the bankruptcy became apparent to all, the region spent

large amounts of new money for "propaganda about regional autonomy," for a vague

program to publish "on subjects regarding the region", for the repair of windmills, for the

restoration of church organs, to support Byzantine and neo-Hellenic study centers, and for

the re-structuring of the debt for the Sicilian institute for World War I wounded. These

are new expenses. Each political party has a study center, supported by the region.

Recently, the region paid to acquire a large shipment of books of poetry exalting oral sex

written by a regional ex-parliamentarian. The region supports festivals, dedicated to the

anchovy or the artichoke, in every town of any size. But things are getting better. The

regional government just cut off financing for a youth cooperative some of whose

members had passed the age of seventy.

The current crisis is one of liquidity. Monthly salaries to regional employees are at

risk: the region maintains 16,500 officials, another 12,113 pensioned officials plus 32,000

temporary hires (with a tendency to become permanent), 50,000 foresters and gardeners,

800 file clerks, 3,000 non-teachers working for the schools, and 5,000 inspectors who

assess fines for illicit construction projects. An important continuing budget item is

hospital construction. Sicily currently has 39 hospitals whose construction is not finished

to the point where they can begin to be used. The Green Party just completed a study of

hospitals in the South to see what percentage were even close to being within the law for

basic security. The percentage was zero.


Attilio Bolzoni, "Sicilia, la Regione fa crac," La Repubblica, November 4, 1998.38

This is not a chronic situation. Spending guided by clientelismo rather than

rational planning is, of course, very old. What is new is bankruptcy and Rome’s failure to

provide as lavishly as it once did (the result of Prodi’s policies as well as those of his three

predecessors). The reaction to this slide toward the cliff's edge has been to keep spending

in the belief of an eventual bail out from either Rome or from Brussels.

Organized Crime

The noble families of the South can be tagged as initially responsible for the

growth of organized crime in the Mezzogiorno. They had long used criminal bands to

keep order, protect their property, and defy and sabotage those — from Bourbon kings to

Garibaldini — who sought to rule them. Unification brought no improvement since it

meant a weak, distant state.

Organized crime, as measured by the Interior Ministry, rose in 1997 relative to the

previous year, motivated mostly by a sharp increase in Campania, especially Naples.

Crime levels for the rest of the rest of the South remained constant with 1996 figures.

According to the Ministry, there were 20,151 full-time mafiosi by the end of 1997, with

4,271 serious crimes for every 100,000 Italians.


The capture and conviction rate

remained very low, with an estimated one-in-six chance that perpatrators of a crime will be

identified by name, let alone arrested. In Sardinia, several major kidnappings since 1997 in

which hostages were kept in the area of the kidnapping for several months have publicly

frustrated the law enforcement agencies. To recover the victims, it was necessary to

violate the law supposed to sequester the assets of the victims' families in order to prevent

ransom payments. Yet the per capita number of law enforcement officers — including the

State police, the Carabinieri, and the Guardia di Finanza — is one of the highest in

Europe (one per 219 inhabitants). They are not equally dispersed however: on a per


SVIMEZ, Rapporto 1998 sull'economia del Mezzogiorno (Bologna: Il Mulino, 1998), p. 627.39

capita basis, twice as many are stationed in Rome and Naples as in Milan and Turin.

In 1986, the Italian government estimated that profits from organized crime

amounted to 12.5 percent of Italy's gross national product.


One business association

estimated that criminal activity in Italy accounted for about 130,000,000,000,000 lire

(more than eighty billion dollars) of business in 1997.


The study cited breaks this down

by organization and, surprisingly, shows Cosa Nostra (Sicily) running a close third behind

the Camorra (Naples) and ’Ndrangheta (Calabria). It is difficult to have full confidence in

these estimates. In 1998, Luciano Violante, former chairman of the Senate's Anti-Mafia

Commission and now President of the Chamber of Deputies, attempted a "quantification"

of the criminal economy and its cost to the country.


While these estimates may be

questioned, most reports agree that the Sicilian Mafia has got the European spirit and is

reaching out to the continent. Indeed, the capture of some of the most important Mafia

dons and secrets revealed by some of the pentiti confirm some re-structuring in the


Recently, the EU has been trying to get a statistical grip on the economics of

organized crime. Beginning in 2000, the EU will begin recording criminal activity as a

"legitimate" part of a country's GNP, including separate statistics on profits from drug

trafficking and prostitution and using the same methodology for estimates used in other

economic sectors. Ironically, this is good news for Italy. With the South thus making a

major contribution to Italian economic achievements, a significant rise in GNP is to be

expected in 2000, permitting a larger deficit without exceeding levels agreed on at


Di Scala, op. cit., p. 319.


Quando il crimine entra mel mercato, Rapporto 1997-97 (Rome: Confcommercio, 1997), p. 16.


Luciano Violante, ed., I soldi della mafia: Rapporto '98 (Bari: Laterza, 1998), and Mario Centorrino,

"Il giro d'affari delle organizzazioni criminali," in Violante, p. 7.40

Maastricht. Thus, a truly strong criminal sector will be able to contribute to a picture of

stability and discipline.

But will the South be able to hold up its end and maintain a healthy criminal

sector? The maxi-trials of mafiosi in the 1980s and 1990s were real. The recent arrests of

Toto Riina and other important dons are also real, and important. The stool-pigeon

pentiti delivered huge amounts of partly reliable information to southern magistrates. The

assassinations of General Dalla Chiesa and the magistrates Falcone and Borsellino can be

seen as indications that the families were feeling serious heat. Naples Mayor Bassolino

booted some of the henchmen of the Gava family, the archetypal political bosses, out of

the Neapolitan bureaucracy. Items of "good news" such as these were also announced

proudly by the Mussolini regime, which claimed to have finally eliminated the Mafia. But

allied forces were barely into western Sicily in 1943 before it was clear that they would

have to cut deals with a structure of organized crime that was alive and well, if

momentarily curtailed.

Despite such arrests and related events, however, the Mafia can still maintain a

remarkable consensus. Some of the extraordinary stories demonstrating Cosa Nostra's

authority would not be otherwise credible. As publicly diagnosed by Elda Pucci, a

physician who became mayor of Palermo in the early 1980s: "We are sick; our sickness is

mafiosità." Mafiosità is shared by a large part of the people of Sicily. It is not the simple

consensus of consent or respect; it is similarity. (Pucci was attacked and destroyed

politically within six months.) An example of the factors that produce this consensus

comes from Palermo, where Mafia families control almost all construction work, including

all public contracts. A few years ago, when a combination of anti-Mafia laws started

blocking public contracts that could not clear the law's hurdles, everything stopped. There

was no work anywhere in the building trades, except for a few tiny private projects. Even

jobs in public utilities started to dry up. Huge street demonstrations followed with signs41

reading: "If this is what it means to fight the Mafia, we prefer the Mafia. Viva la Mafia!"

These were not ordinary Mafia sympathizers: a large part of these workers were

Communists and carried red flags in the demonstration.

Organized crime in the Italian Mezzogiorno is more than a security problem and a

cause of limited social blight, or a twist put on the question of tribalism. It profoundly

influences the entire authority structure of Southern society, and is such an important

economic factor that any projection omitting estimates of its impact will be flawed. A

massive study by the Centro Studi Investimenti Sociali (CENSIS) failed to find direct

causality between economic underdevelopment and criminality.


It found, for example,

that Basilicata and Sardinia, with a low level of organized crime activity, had development

profiles that were about the same as those of Sicily, Campania (Naples), and Calabria.


Interestingly, they found a high level of criminal activity in the one truly prosperous region

of the South, Puglia. (The Sacra corona unita of Puglia is increasingly recognized as the

equal of the Camorra and the 'Ndrangheta, with some family links with both of them.)

The study, notable for its breadth and seriousness, arrived at two more limited

conclusions: first, wherever organized crime is widespread, it is always associated with a

low level of development and, vice versa; second, there is no economic and social growth

in the presence of high levels of organized criminality.


The study found that the areas of

the South currently showing the highest economic growth are those that have historically

escaped the grip of the Mafia (or the others). This is true for whole regions, such as the


CENSIS, Cultura dello sviluppo e cultura della legalità: Programma integrato per il mezzogiorno

(Rome: Gangemi, 1997), p. 22.


It may seem surprising to find Sardinia in this category, given its reputation for banditry. But

L'anonima sequestri, the system of kidnapping-for-ransom to which the island's rough hills are so well

suited, is not put, by Italian authorities, in the "organized crime" category with the Mafia and Camorra.

The Sardinian criminal bands are generally not connected among themselves, and are not well organized,

but merely very effective in their business specialty, kidnapping.


CENSIS, op. cit., p. 23.42

Abruzzo, or for provinces within crime-ridden regions, such as Avellino in Campania,

where the Camorra has found it difficult to penetrate.

Organized crime may be a result of economic growth that fails to bring about true

socioeconomic development. The cases invoked for this hypothesis include, most

strikingly, the period after the 1980 earthquake in Campania. As disaster-relief funds

flowed in, the Camorra rapidly organized a large-scale operation to divert this wealth.

Later analyses showed that few funds ever reached their intended destination and, where

they did arrive, were not part of any serious development strategy. Whole towns still live

in tents and containers.


The vicious circle is easy to draw: criminality slows or stops development of the

society, which in turn becomes increasingly vulnerable to the attack of organized crime.

So organized crime, according to the CENSIS study (which, on this score, parallels other

studies and much southern literature), is not the direct cause of under-development but is

one of the factors that inhibits economic and social growth in a limited geographic area.

Mafia-like organizations, the CENSIS study emphasizes, "discourage productive

investments on the part of private capital, contributing to the maintaining of a negative

image on the national and international level; constitute an incentive for the flight of

qualified human resources; cause the exportation of the profits of illicit activity, through

money laundering and investments in other zones; provoke a non-rational allocation of

resources, substituting their own interests for the logic of the marketplace; and feed a

growth of the illegal and submerged economy."



A similarly-catastrophic 1976 earthquake in Friuli, in the far north-east corner of Italy, provides

contrast. A strong flow of disaster-relief funds was not only actually used to rebuild Gemona and other

towns, but became determinant in the economic development of the area, which has enjoyed

extraordinary progress since then.


CENSIS, op. cit., p. 23. Italics in the original.43

During the last two decades, two magistrates have become national heroes

(Falcone, Borsellino), three lawmen have become celebrated martyrs (Falcone, Borsellino,

General Dalla Chiesa), and some local magistrates, such as young Massimo Russo, have

pulled off massive trials leading to convictions that have profoundly disturbed the Cosa

Nostra power structure. But the state has a crucial role to play beyond sending

magistrates into battle. Russo uses a medical metaphor: "We magistrates are like surgeons

who open up the patient, cut out the disease, but then must leave it to others to put the

patient back on his feet: that's why we are 'dangerous', because we can be devastating, we

smash up this society... If, alongside our work, a strong action of the State doesn't

intervene, rebuilding and re-educating at the same time, the patient dies or rebels against

the surgery."


The record, on this score, is so poor that, at some point, the question of

what Europe intends to do about it will certainly be posed.

Government Policy on Organized Crime

Since Spadolini and Craxi broke the grip of the Christian Democrats on the Italian

prime minister’s office, there has been a rainbow of governments in Rome. None of them

has altered the prevailing southern disillusion with, and pessimism about, the Italian

government. It is this pessimism that nourishes the extraordinary success of organized

crime, especially in Sicily, in providing an alternative. Because people do not perceive an

alternative, they rely on the Mafia’s feudal order. Over time, however, the perception of

the Mafia has changed. A couple of generations ago, the Mafia was seen as offering

protection in situations where the State did not offer protection. Today, it is almost

entirely about fear of the Mafiosi themselves.


Vaccara, op. cit., p. 9.44

The D'Alema government has not inspired any great hopes in this area, even

though some political figures among the Communists and post-Communists have been

considerably more serious about stemming the blight of organized crime than most of their

colleagues to the right. Without challenging the sincerity of the efforts of many in the

other parties, it is fair to say that there was a significant difference between the anti-organized-

crime record of the Italian Communist Party and the others. Much of the real

post-war opposition to the crime families in the South came from the PCI. In Sicily, the

landmark date is May 1, 1947, when the citizens of three villages near Palermo gathered at

an open plain called Portella delle Ginestre to celebrate Labor Day and the strong gains

made, ten days earlier, in regional elections by a Leftist bloc of Socialists, Communists,

and the Action Party. A large band of mafiosi and bandits hired for the occasion opened

fire on the families seated amid the red flags. This massacre was the beginning of a

running battle in which the Communists continually tried to organize workers and peasants

against the Mafia and were usually out-gunned in politics and local influence.

Part of this Communist role is circumstance. Since the PCI never took power,

nationally or at any significant location in the South, deals were never cut and there was

no reason for the crime families to labor to infiltrate it.

The PCI tried to fight by using ideas. Organized crime, uninterested in ideas,

fought with power. There was an important exception to this. In the spring of 1982, the

Mafia murdered the head of the PCI in Sicily, Pio La Torre, who had campaigned to

strengthen the laws against organized crime. His assassination led to the "La Torre Law"

which permits investigation of the bank accounts of mafiosi and the seizing of their assets,

and makes it a crime to belong to a criminal band. But La Torre, who said "we don't fight

with slogans," was a short-lived exception to the normally unequal terms of struggle.45

There may be a hero (or heroine) in the ranks of the D’Alema government, but the

next few governments will probably come and go before there is a genuinely fresh

approach and devotion of political and material resources to the fight against Southern

crime. It would need, among other things, the absence of other crisis-proportion issues in

which the government must invest its energy and focus. That is unlikely to happen before

2007. Indeed, most would agree that the current effort by magistrates in Palermo, Naples,

Reggio Calabria, Catania, Bari and elsewhere, if it were to continue at the same rate of

success (and there is some to report), will not add up to a significant decline of the crime

families by 2007.

If all the Mezzogiorno needs for better economic performance is investment, then

crime is a central issue. Any business there, new or old, needs security against criminality.

To spur investment in the 1990s, the Italian parliament passed Law 44 giving considerable

tax advantages and other benefits to small, southern businesses. The businesses covered

by the law must be relatively small and independent of large chains, be based entirely in

the South (although they may market anywhere), be run by southern entrepreneurs who

have not run a business before, and they must fill some identifiable niche in the market. A

few dozen enterprises have availed themselves of this opportunity. While these efforts are

not enough to have a serious impact on the South's economy, comments made by several

of the entrepreneurs are telling. Although not asked directly about security against crime,

about half of those interviewed used the occasion to emphasize that they would refuse to

pay protection money if asked. Rather than pay, or resist, or go to the authorities, these

entrepreneurs would simply close their doors. Clearly, this was an issue which these

young businessmen and businesswomen viewed as explicitly pivotal to the future of their

companies, and the intended audience for these statements was the crime families




Impedocle Maffia, Giovani del Sud (Rome: Laterza, 1995).46

All too often in the past, an entrepreneur who refuses to pay but tries to stay in

business, has usually either died or watched his business die. The best known case is that

of Libero Grassi, who ran a tiny pajama factory in Palermo. In 1991, Grassi was invited to

pay the usual pizzo, or protection money, to the Mafia. Instead, he refused, and went to

the police and denounced, by name, the mafiosi who had demanded money from him. He

attended an anti-Mafia meeting in Palermo at which only five other people showed up.

Grassi then took the even more unusual step of appearing on one of Italy's most popular

television talk shows, where he was featured as a businessman who was not afraid. Soon

after the people Grassi had named were arrested, he was shot and killed in the street in

front of his house. In the North, Grassi was hailed as a hero, but in the South he was

considered mad.


The pizzo has finally met Europe. In some sectors of Sicily, protection money is

usually paid in response to a formal billing process, complete with the value added tax and

proper fiscal receipts.


The extortion rate, according to the SVIMEZ study cited earlier,

has the geographic break down one expects. The populous and prosperous areas of


Grassi's death led to the passing of the "Grassi Law" in Rome a short time later. It provided funds to

come to the aid of businesses that had suffered damage because they had refused to pay a pizzo to

organized crime. But with the help of southern parliamentarians, the law carried a few loop-holes which

were later exposed. Thus, the owner of a small construction firm in Foggia was refused any

compensation because he had once paid some protection money and then said no. The State ignored

him, but others did not, and he was murdered. Another loop-hole was that no compensation was

provided for damage that was not physical. So a Sicilian tire-repairman who refused to pay simply lost

his business because, after it became known that he had balked, nobody would bring their tires to him,

carrying them to a nearby town instead. He went broke and moved out of town, and the Grassi Law was

no help. The law provides compensation for the loss of windows and grills, but not for the loss of life.

The victims of this loop-hole were the family of Libero Grassi. Eight years after the murder, in February

1999, they were refused any compensation because the Mafia had not damaged the premises, only killed

the entrepreneur. Stella, Gian Antonio, "L'imprenditore ucciso nel '91, no dello Stato," Corriere della

Sera, February 25, 1999.


"Mafia estorsioni: 'Pizzo' con fattura ed iva a Palermo," ANSA dispatch, June 30, 1999.47

Lombardy and Veneto had 241 and 99, respectively, of the extortion cases reported in

1996. Campania and Sicilia reported 515 and 579 cases that year. When one factors in

the much lower likelihood that an incidence of extortion will be reported in the South, the

gap widens. In 1996, the number of assaults in the Center and North of Italy was down

8.8 percent from 1995. For the Mezzogiorno, the 952 cases represented an increase of 3.5




Recent Reform Efforts

In the West, local, regional, national, or European governments are expected to

alter trends, stimulate what is considered to be good, and force detours around what is

considered worrisome. Serious, managed reform and long-term improvements in citizen’s

lives require governmental capacity to pursue programs over a prolonged stretch of time.

This requires the clear assigning of responsibility, with the means for citizens to reward or

punish, according to their view of the results. This has been difficult in the Italian

Republic because of the extreme brevity of governments. Although many of the same

faces kept cropping up after each ministerial reshuffling, ministers knew, throughout most

of the last fifty years, that they were just paying a quick visit to their ministry. Because

usually unable to carry out even mid-term programs, the most prudent ministers did not

even risk an attempt.

An impressive number of Italian political leaders have spent at least eight years

trying to move Italy from proportional representation to a majoritarian system in the

election of the parliament. This would permit majority parties to stay in office for a


For the latest figures from the Interior Ministry see SVIMEZ, p. 629. Judith Chubb’s study, The

Mafia and Politics: The Italian State Under Siege, was not used because her figures are now more than

a decade old.48

serious stretch of time. Citizens would see their votes translated directly into leadership,

instead of a merely slight shifting of the balance in never-ending coalition negotiations. A

first reform in the early 1990s appeared to do part of the job. Both houses are now

elected by first-past-the-post competition, except for 25 percent of the seats, assigned

according to a proportional representation formula that compensates a party that finished

first nowhere but still garnered a certain share of the overall votes. The reform was not

useless: it created a more direct relationship between geographic sectors and some of

those representing them. But the 25-percent exception has proved fatal to hopes of

reducing the number of parties in parliament (there are more now than before the reform)

or of making coalitions simpler or even unnecessary (post-reform governments have

involved more partners than did pre-reform governments).

The referendum of April 19, 1999 was seen as crucial to the future of stable and

effective governance in Italy, crucial to the country's successful operation in the European

context. Amazingly, such a profound change was not very controversial. The campaign

mounted in behalf of a "No" vote was flaccid and dispirited. In fact, more than 90 percent

of those voting said "Yes" to the proposed change. But the voter turn out in the

Mezzogiorno was so low, under forty percent in many places, that the referendum fell

short of the required quorum (fifty percent of registered voters).


The wishes of the

overwhelming majority of northern Italians were, one more time, frustrated by their fellow

citizens to the South. Despite the tones of shock in the media, the result did not surprise

those who knew the Mezzogiorno. It was in tune with the typical southern attitude: the

reform seemed to many Southerners as just one more big idea from the North being

imposed on (not coming from) the Mezzogiorno.


Because of the odd way in which the law is written, a few thousand more "no" votes would have

allowed the referendum to pass. The law requires only that 51 percent of registered voters take part in

the referendum and that half of those voters cast "yes" ballots.49

When an election involves real men, with faces known to the voter, with the clear

capacity to do favors for, or harm to, the voter, the southern voter troops to the polling

station and does the necessary to protect his/her clear interests. These are not votes for

ideas (such as party platforms) but for flesh-and-blood friends and foes. When the vote is

for a mere idea, or even for a candidate who seems irrelevant to the voter's direct, earthy

interests, such as a candidate for the European parliament, then there are better things to

do with one's time. All politics is local politics and the rest is just roba del Nord, northern


Italy’s Judicial System

This issue of Italy's governability in the European context raises the question of

justice. As Spencer Di Scala wrote in late 1998, "Can the European Union permit the

existence of a brand of justice that is an anomaly and that is a liberty-killer? Italian justice,

and not its economy, will be the burning question for the EU..."


Di Scala is most

probably correct in this judgement but, while he worries about Italian justice increasingly

becoming an anomaly in the EU, there are strong indications that Italian justice may cause

an equal amount of heartburn as an inspiration for imitation. Clearly-politicized French

magistrates have cited the Mani pulite pool as their inspiration, and comparable situations

are already arising in Spain and Greece.

The Milan magistrates continue to condition the life and political environment of

Italian governments. They had a hammerlock on Romano Prodi, who was the head of IRI

during an era of a large flow of funds from that organization to political parties. The

authors of The Italian Guillotine spoke of the Enimont scandal as "the mother of all

bribes", because the full IRI story had not yet broken, and still has not. But the D'Alema

government is no more free of potential threat from the magistrates than was Prodi: the


Spencer M. Di Scala, "La Ghigliottina italiana: Lettera dall'America," Voltaire internet magazine,

October 20, 1998.50

Milan magistrates' files are full of the details of the illicit financing of the Italian

Communist Party, and its successor Democratic Party of the Left (now Democrats of the

Left). Revelations that emerged from Vladimir Bukovsky’s examination of Kremlin files

confirm Soviet financing of the Italian communists up to 1989, but also indicate a link

between the party’s fear of a political scandal on the subject and the triggering of the Mani

pulite campaign by left-wing Milan magistrates.

There are three separate, but related, problems of justice. One is the threat to

normal politics by an aggressive magistracy sweeping over the barriers of the separation of

powers. The second is the specific threat to political leaders, including those currently

governing (as noted, Berlusconi, Prodi and D'Alema seemed vulnerable). The third is the

system of justice itself, which demonstrates an extreme case of several illnesses: (1)

slowness to the point of disfunction, (2) a serious tilt in favor of the prosecution, (3) use

of preventive detention to force citizens to talk, and (4) use of friendly media both to ruin

opponents and to influence political decisions, especially institutional reforms that would

mitigate these and other ills.

On November 11, 1998, the Constitutional Court gutted the most important

reform attempt in recent memory, a procedural code that requires the presence in the

court room and availability for cross-examination of those whose statements and

accusations are used to convict.51


hat should Europe worry about now that it is truly in bed with Italy? When

the Prodi government fell, Corriere della Sera reported that "for the first

time the pathological instability of Italian politics is not only a 'national

anomaly,' to be observed with amused clinical detachment. Italy is in the euro. And the

political convulsions in Rome therefore become a common cross that risks becoming a

burden on everybody's shoulders."


But political instability will not be the chief concern

about Italy in the years leading to 2007. Every current tendency in Italian politics is

toward the Center, as it was in the First Republic. Trasformismo, in which one becomes

increasingly similar, politically, to one's opponent (making it easier to slide in and out of

alliances and coalitions), was strongly at work in the forming of the majority for the

D'Alema government. Achieving the majority required that at least a dozen

parliamentarians "cross over" from the zone they inhabited at the time of the 1996

elections, the zone their electors understood them to inhabit, to the area that was, in 1996,

the opposition. In politics, as in business competition for contracts, the tendency is to find

a formula by which there are few real losers. That humane tendency to cooperate, strike

deals, and share is the ultimate guarantee against dangerous instability.

In the political arena, Europe's greatest concern should be over who is ruling the

rulers, or by whose permission they are allowed to rule. This is the problem of Italian

justice, and the profound impact on Italian democracy made by aggressively political

magistrates. Productive and democratic politics is difficult when Jacobins are in the

streets. Finally, Europe must worry that it has not embraced a big country whose vital

statistics showed it to be something close to a "normal" European partner. Instead it has


Andrea Bonanni, "Europa, allarme per il 'caos italiano,'" Corriere della Sera, October 10, 1998.


embraced two countries, one of epic economic accomplishments and a social fabric that

fits nicely with its European partners, the other a very large and significant region with

profound and intractable differences from mainstream Europe, differences that will not

diminish by themselves between now and 2007.

What are the implications of the size and intractability of the Mezzogiorno for

further European integration? What is the relation between the condition of the Italian

South and the EMU? During the young lifetime of European integration, Europe has been

effective as a lever to force change in Italy, especially during its Maastricht chapter. The

question now is whether further moves toward integration can successfully include the

Italian South. From many standpoints, including competitiveness, the Mezzogiorno is

more exposed now than it was before. One scenario for the period to 2007 must be that

economic (and therefore social) conditions in the South will worsen over these years.

In some sectors of the South, the expectation is the opposite: there is a fairly

widespread belief that Europe will bring help, that a windfall from Brussels is due. That

belief will, of course, be disappointed. It is conceivable that excess reserve holdings in

central banks in Europe could be used to enhance economic development in some of

Europe’s "difficult" regions. However, Brussels will be very cautious in the light of the

South's history of being unable to use EU funds effectively. And the simple growth of

trade within Europe should benefit all regions with, presumably, the result of increased

economic integration and the benefits to laggard regions which this integration will entail.

Help might be on its way, but it will not take the form of the great bail out for which the

still-exuberantly-spending regional powers are hoping.

Equally significant is the developing northern tendency to see Europe as a way to

wash its hands of the South. Since 1958, the policy statements of Italian governments

have declared that the Mezzogiorno is a European problem, and have asked Europe to53

address it. The next step is to declare further that it is exclusively a European problem

and not an Italian problem at all. The Majority Leader of the Chamber of Deputies, Fabio

Mussi, unwittingly dramatized this inclination in late 1998. He acknowledged that the

Mezzogiorno was Italy's "historic problem." He then affirmed that "what is new is that it

is now confronted in the context of a European space, not a national space. The problem

must be solved in Eurolandia."


Aside from the nervousness one experiences when

European politicians start using the word "space," the beginning of the hand-washing

process is manifest. Northern Italians seem prepared to engage in any sort of

constitutional and institutional reform that would further the effort to dump the

Mezzogiorno in Brussels' lap.

The South may be expecting money, but it has long since proved that the problem

is not money. For years huge appropriations from Rome went unspent in the South

because of failures to meet the requirements that had been written into the law. And it has

already established that it will find the same difficulty in spending EU resources.

Politicians want to spend, but southern bureaucrats and/or power brokers are not always

up to the task. The real problem is, without question, that of incentives. How will

Brussels and Rome get the South to produce more, to live less off the State? Some

analysts believe that the shape that "social Europe" will take in the next few years may

actually have adverse results in the Mezzogiorno.

The poignancy of the challenge to Europe goes beyond what social and economic

statistics can convey. As this study was being completed in July 1999, there was an

incident that put into bold relief the contrast between the Italian Mezzogiorno and the rest

of the EU. After the mayor of Palermo had declared that it was now a "normal" city, a

38-year-old bureaucrat, Filippo Basile, was shot at point-blank range in his own car in his


Fabio Mussi, "The New European Way: A Changing Italy in the Europe of the Euro," New York

University's Casa Italiana, December 10, 1998. Translation by Burnett and Vaccara.54

own parking place under the palms in Piazza Carnevale, near the center of the city. The

killers had slashed Basile's tires so that the car was immobilized, and then waited for him

to emerge from his office (at the same time every day) for the drive home. Basile was

described by co-workers a "model administrator, far from any political connections." He

was chief of personnel of the Agricultural Assessor's office, the bureau responsible for

administering huge resources of the state funding and other benefits for local agriculture

that flow into the Region, with a staff of 2,700. It was precisely in the area of the proper

distribution of funds in the agricultural sector in the Mezzogiorno that Brussels had

already expressed concern, and had held up some payments. The chief prosecutor charged

with the case said that we "must not forget that this bureau is an administrative office into

which flow all the pressures exerted by the bosses." The Director General of Basile's

office said the killing would have a "paralyzing effect."


The region has asked that no bureaucrat be allowed to stay in the same position for

more than three years.


While such measures are usually seen as a protection against

overbearing officials, the belief that Basile was "clean" suggests that the measure is also

for the protection of the officials themselves.

This most recent in a string of killings has special meaning for the ability of the

Mezzogiorno to administer any EU-related programs. But it also contains an element that

speaks volumes on the question of whether the South's mentality has changed. Basile was

killed at 2:30 in the afternoon in a busy area near the center of Palermo. For two hours,

no one chose to see or report what had happened, nor to hear the ringing of Basile's

cellular phone as his wife, a pediatrician, grew increasingly worried about his lateness for


The mayor now admits that perhaps the Mafia does remain strong, but to suggest that Palermo cannot

change simply makes it strong.


"Mafia: Dopo uccisione funzionario regione chiede verifica," ANSA dispatch, July 8, 1999.55

lunch. Two hours after Basile had died, an anonymous phone call told police that

"someone was bleeding." The police chief was described as looking around at all the

balconies that overlooked the scene of the crime, "the balconies of three palazzi where no

one saw anything until 4:30."


Two days after the event, the story had entirely

disappeared from the national editions of major daily newspapers. It had become southern

local news. For the rest of the country, the South is far away and the slaying was business

as usual.

Sicilian sociologist Ennio Pintacuda commented that "the terrain is being given

back to the Mafia, the humus that is ideal for its growing: the lack of jobs...."



Cardinal Salvatore Pappalardo, the former Archbishop of Palermo, probed deeper for the

meaning of the Basile murder, saying that the only people who should be surprised by the

killing are those with the illusion that this chapter of Southern history was closed.


Echoing Elda Pucci, the cleric declared that "it's the mentality that hasn't changed.

Thinking like mafiosi. Even today too many people think that way. Even people who

don't commit serious crimes still don't respect the law." It is the mentality that the young

magistrate Massimo Russo said could only be changed through education and reeducation.

This mentality is seen throughout Italian life, only, perhaps, a bit more so in the

South. For example, Italy has the lowest credit card usage of any of the advanced

European countries. One could speculate that the disadvantage of a credit card

transaction is that it leaves a record for tax purposes. Successful evasion of a significant

part of the heavy tax burden is considered essential to the survival of many small


Felice Cavallaro, "Palermo, la mafia torna a uccidere," Corriere della Sera, July 6, 1999.


"Pintacuda: sbaglia chi parla di città normale," Corriere della Sera, July 6, 1999.


In an interview with the daily Giornale di Sicilia, carried in "Mafia: Pappalardo, illuso chi pensava

che tutto era finito," ANSA dispatch, July 7, 1999.56

businesses. This makes the cash transaction especially popular in Italian shops.

A heightened awareness of the challenge of Mezzogiorno may be dawning in

Brussels. Romano Prodi's assumption of the presidency of the European Commission will

certainly advance this awareness. But if Europe is not entirely ready for the Mezzogiorno,

parts of the Mezzogiorno are ready for Europe. Turin's La Stampa reported on February

27, 1999 that, in the hills between Palermo and Catania, seven Sicilians were arrested as

they were using sophisticated computer software to turn out counterfeit ten- and fifty-euro


The analyses of social scientists may fail to capture the most important factor with

which Rome and Brussels will have to deal during the next decade when considering the

Mezzogiorno: the rich mixture of attitudes and perceptions of the Southerners themselves.

So many observers turn to the literature of Southern writers, to Sciascia, to Silone, to

Verga and especially to Lampedusa. In Il Gattopardo, the Principe is graciously offered a

seat in the new Senate by the government of the fledgling Italian republic, affording him a

chance to do something to help the people of Sicily. His reply, although it speaks of Sicily

and not the entire Mezzogiorno, and although it "took place" more than a century ago,

opens a window on what the new Europe faces in the old Italian South.


"We Sicilians have been accustomed to a very long hegemony of governors that

were not of our religion, that didn’t speak our language…In Sicily it doesn’t matter

whether one acts for good or ill: the sin that we Sicilians can never pardon is simply that

of taking action. We are old, very old. For almost 25 centuries, we have borne the

weight, on our own shoulders, of magnificent heterogeneous civilizations, all coming from


The authors informally contacted 16 scholars, journalists, and government officials with special

knowledge of the Mezzogiorno to see what elements of the Principe’s reply were, they believed, no

longer valid. None of those contacted would change a word.57

the outside already complete and perfected…Sleep is what the Sicilians want, and they

hate whoever wants to wake them, even if it’s to bring them beautiful gifts…Our

voluptuous immobility produces the arrogance of people here, of those who are half-asleep…

But I speak of the Sicilians; I should add the atmosphere, the climate, the land.

This land know no halfway point between lascivious softness and cursed harshness…not a

land in which to live a rational life…

"You were wrong when you said ‘the Sicilians want to improve themselves.’ No.

The Sicilians do not want to improve for the simple reason that they believe themselves to

be perfect: their vanity is stronger than their misery: every intervention upsets their raving

about having achieved perfect refinement. Do you really think you’re the first to want to

channel Sicily into the mainstream of universal history? The difference [between us and

those who would improve us] is found in that sense of superiority that glitters in every

Sicilian eye, that we ourselves call pride, but that is, in reality, blindness…They [the

Garibaldini] are coming to teach us good manners, but they won’t succeed because we

are gods."


Greetings, Europe.


Giuseppe Tomasi di Lampedusa, Il Gattopardo (Milan: Feltrinelli, 1957), pp.188-227. Translated

and arranged by Burnett.58

Stanton Burnett was CSIS Director of Studies from 1988 to 1991 following his

retirement as Counselor at USIA, the senior professional position in the agency. Dr.

Burnett’s earlier assignments at USIA included director of European affairs,

director of research, and counselor for public affairs in Rome, Italy and at the U.S.

Mission to NATO in Brussels, Belgium. A prolific writer, Dr. Burnett is the author,

most recently, of The Italian Guillotine: "Operation Clean Hands" and the Overthrow

of Italy’s First Republic (with Luca Mantovani). The book received the 1998 Ignazio

Silone Prize.

Stefano Vaccara is a columnist and journalist for America Oggi, the largest Italian

language daily newspaper in the United States. His articles have appeared in Il

Giornale, Liberal, and other Italian publications. Mr. Vaccara is also an instructor

at the New School University for Social Research in New York City.