Italy faces a wave of devastating International Monetary Fund (IMF) imposed austerity as European leaders struggle to contain the spreading debt crisis by disenfranchising their own citizens.
On November 4, at the end of the G20 meeting in Cannes, the President of the EU Commission Jose Barroso announced that “Italy has asked on its initiative to the IMF to monitor its commitment to fiscal and economic reforms”.
This monitoring process will start immediately – a week later, Barroso flew to Rome with a group of IMF inspectors – and this will be repeated every three months, in order “to verify” that the Italian Minister of Economy is implementing the “reforms” effectively. Great emphasis was placed on the fact that the Italian government “voluntarily asked” for IMF surveillance.
Of course, there is nothing “voluntary” in this decision. The imposition of regular “monitoring and reporting” on the countries that need credit is actually common practice for the IMF technocrats.
When it is applied to one of the largest economies of Europe, however, this measure is perceived as a deeply humiliating step (notably, the last G7 country to undergo IMF monitoring was Britain, in 1976). More importantly, IMF “surveillance” – as in the words of Christine Lagarde – limits the freedom of manoeuvre of the monitored country in the crucial fields of economic and social policy.
It is quite interesting to read – or better, not to read – what the measures that the IMF will foist on Italy are. Barroso generically talked about “fiscal and economic reforms”. The Financial Times published an editorial calling for Berlusconi to step down [Berlusconi announced on November 8 that he would not stand for reelection] and the Italian government “to bring about meaningful change” (meaningful ... for whom?).
For their part, Italian media are all far too busy in wasting column inches on the ridicule to which Berlusconi has exposed the country.
Actually, it does not take much imagination to figure out what the price for restoring “international credibility” will be – in other words, what the IMF will demand of the Italian government, whoever its leader will be.
One has just to look at the history of countries such as Thailand, Mexico, Brazil, Bolivia or Argentina, that were regularly “monitored” by the IMF technocrats in the 1980s and 1990s: the so-called “structural reforms” will consist of a deadly mixture of brutal austerity measures based on cutting public spending, privatisations and a further “deregulation” of the labour market. For the IMF (and the financial markets), restoring the “international credibility” of Italy means wreaking a neoliberal nightmare on Italian workers.
In this dramatic context, the parliamentary oppositions look as distant from the people who they should represent as ever. The leader of the main opposition party — the Partito Democratico — has said it will be “responsible” and give its support to an alternative government that benefits from “international credibility”.
The President of the Republic, the former right-wing Communist Giorgio Napolitano, has urged more “social and national cohesion”, saying Italy will have to take “painful decisions” that might look “unpopular”. Interestingly enough, he is completely overlooking the role (and formal sovereignty) of the Italian parliament. In other words, Italian mainstream politicians seem more than happy to play the part of the useful idiots.
The fact that the austerity measures will be imposed upon the country from the outside, and without the Italian people having a say on them, is highly indicative of the present crisis of parliamentary democracies.
The introduction of “IMF surveillance” unveils how, within the neoliberal order, the sovereignty of democratically-elected parliaments is substantially limited — and, under certain circumstances, expropriated — by transnational capital. The new regime of IMF tutelage has not (and probably will not) be discussed in the Italian parliament - in principle, the body that is the expression of people’s will.
The people's will becomes completely irrelevant once the technocratic institutions of neoliberal capitalism decide (on behalf of the financial markets) to declare the “state of exception” and assert their power.
It is important to underline that this is not a contingent, but a structural condition. People living in so-called “developing” countries know far too well with what impudence (and often, violence) transnational capital can topple democratically-elected governments to protect its own interests.
The IMF tutelage over Italy, and the quick backtrack on the proposal to hold a referendum in Greece, are both signs that the economic crisis is unearthing also at the centre of the global capitalist system an essential contradiction that is inherent in it: that is to say, the fact that real democracy is not necessarily linked (as the elites and the liberal professors would us believe), but actually at odds with neoliberal capitalism.
[Republished from Counterfire.]