A New Europe?


Morena Pivetti’s mother was a dedicated school teacher. Until she retired a few
years ago, she devoted her working life to Italy’s greatest and most-loved resource,
its children. When she retired, she got one of the best pensions in Europe. Over decades,
the social respect gained by Italian teachers has earned them the right to retire with
full benefits after 20 years in the classroom.

Next year, however, these generous pensions will be history. Italy’s new
government of former communists says the country can’t afford them any longer.
Pivetti defends the decision as inevitable, a price that had to be paid to keep the
country’s pension system afloat, while meeting the stiff budget-cutting requirements
for joining the new Europe.

Pivetti is managing editor at L’Unita, the newspaper which held aloft the
banner of class struggle in Italian politics for five decades, as the voice of the former
Italian Communist Party (PCI). Every day, she puts out another edition from a modern
office filled with computer terminals, in a stylishly old building in the heart of
Rome’s fashion district.

These days, though, L’Unita’s take on class politics has changed. The
paper prints columns by Robert Reich, the former U.S. labor secretary who counsels
American workers not to fight the new global economy. Workers need to accept the price for
keeping their nations competitive, Reich argues, even when plants close and they have to
change jobs many times.

Like a large section of the European left, many of Italy’s former communists are
attracted to Reich’s politics of sacrifice. And for the first time in 50 years, since
World War II, Pivetti’s comrades are in power. The Party of Democratic Socialism
(PDS), which anchors the ruling Olive Coalition, was born when the Italian Communist Party
split in 1992, in the wake of the fall of the Soviet Union. The PCI’s larger and more
conservative wing formed the PDS. A smaller, more militant group reorganized as the
Refoundation Communist Party, or Rifondazione.

Since Mussolini’s downfall in 1944, Italy’s communists have run many of its
largest cities. But for 50 years, they were kept out of every national government, often
at the behest of the U.S. Central Intelligence Agency. Now the old Socialist and Christian
Democratic parties, which excluded the communists from government, no longer exist. Mired
in the mud of corruption scandals in the early 1990s, they lost their credibility with
voters and expired.

In 1994, in the wake of their dissolution, the Olive Coalition won the historic
election that finally gave it a governing majority in the Italian parliament. But
it’s a slim majority. The PDS depends on the votes of its old comrades in the
Rifondazione. The hard-liners keep the PDS in power, but refuse to join its government.

L’Unita followed the PDS wing of the split in the old PCI. A daily with a
huge circulation, it’s been the envy of other western communist parties for years. It
is an institution, not just of the Italian, but of the European left.

Pivetti warns that this coming year L’Unita will lay off half its 300
workers. The "Mattina" editions, started to serve readers with local news in
cities like Florence and Milan, will likely be discontinued. This must be a bitter irony
to the staff and to millions of Italians who loyally supported Europe’s most widely
read communist periodical through thick and thin. The PDS won the government, but they may
lose the paper.

When the Italian Communist Party dissolved, party subsidies ended. "Now we will
have to make it on our own, just from sales, subscriptions, and advertising," she
explains. Whether the paper will survive in a chilly new market-oriented world is a
question no one can answer. While it certainly has a loyal readership, it’s hard to
imagine department stores and big corporations paying for pages of ads.

The struggle over L’Unita’s fate is just one reflection of a fierce
debate raging through Italy and Europe, pitting the old values of social stability against
the new ones of the marketplace. For the first time Italian workers have a government
which they can justly feel in some degree belongs to them. Their unions campaigned for it
and support it. Workers by the millions voted for it. One wing of the old party, which was
historically their voice, leads it. Italian employers even attack it—the first
national government they haven’t liked since the war.

Yet the PDS is telling workers they must accept the bitter economic medicine required
to join the European monetary union. Next year, a common currency, the Euro, will replace
the mark, the franc, the lira, and all the old currencies of a select group of countries.
These are the nations able to reduce their budget deficits to 3 percent or less of their
gross national product.

To the conservative architects of this new Europe, that goal can only be met by cutting
government subsidies for health, housing, education, and pensions. At the same time
government revenues must also be boosted, they say, by selling off the vast network of
nationalized enterprises, from airlines, telephones, and power plants to steel mills,
ports, and railroads. Meanwhile, high unemployment and contracting-out must be used to
attract investment by keeping labor costs down and profits up.

These are the rules of a bankers’ Europe, written in corporate boardrooms. For
five decades, their authors have fought all the social legislation won by European unions
and left-wing political parties. These conservatives consider the extensive network of
social benefits enjoyed by Italian workers an historic mistake.

But now the bankers must rely on the PDS, successor to Italy’s old Communist
Party, to find a way to keep Italian workers from gagging on their bitter economic

In the U.S., it took a Democratic president to succcessfully sell free trade and
welfare reform. In Italy, only part of the left can sell the prescriptions for a united
Europe to those who might be counted on to oppose them. It is a fight, however, that is
far from over. Two years ago, Italy was the only major country in western Europe where
voters had rejected the conservative wave of the 1980s and early 1990s, and voted for the
left. Then the French rejected the austerity of the Plan Juppe in giant strikes, and voted
in a Socialist government at the polls. On their heels, British voters finally swept out
John Major, the heir of the prime minister of European conservatism, Maggie Thatcher.

No one predicts that the election of these left governments will halt the process of
economic integration. None of the new parties in power advocate such a course. The
question they face is: how many of the social benefits achieved by workers since World War
II will survive European integration?

To the PDS, Italy’s prosperity won’t survive if it isn’t included in a
united Europe. Italians have something to lose, Pivetti argues. "When I was young in
the 1960s, only one family in my apartment building had a black-and-white TV, and we all
rode the busses and subways. I came to New York and all my friends had a color set and a
car. Now I’m better off than they are. If we can’t keep up and join the European
club," she sighs, "we’ll be left like north Africa—a third world

But prosperity has its underside. Unemployment in Italy is over 12 percent. The same is
true in France and Germany. In Britain, where Thatcher cut the power of the unions,
unemployment came down. But Britain’s new non-union jobs overwhelmingly pay much less
than the union ones which disappeared.

Creating lots of low-wage jobs is part of the bankers’ prescription. European
conservatives have adopted Reagan’s trickle-down rhetoric that increased subsidies to
business and relaxed labor protections can produce high profits, tempting businesses to
hire more workers. They eagerly accept the U.S. media’s glowing accounts of American
economic success. The "hard-capitalist" U.S. economy "skips along,"
according to European Newsweek writer Richard Ernsberger, while the "the
overregulated welfare state that is Europe" only produces unemployment. This vision
is shared by some parts of the left as well. Following his election, Britain’s new
Labor Prime Minister, Tony Blair, announced he wouldn’t roll back Thatcher’s
privatization of British industry or lift her harsh restrictions on unions.

Millions of Italian, French, and British workers, however, expect their new left-wing
governments to bring down unemployment, while protecting their hard-won social benefits.
French workers shut their whole country down two years ago to save their pensions and free
health care. Italian unions threatened to do the same thing last year to stop threatened
pension cuts.

Some elements of the left go even further, demanding that governments move beyond
preserving past benefits to winning new ones. Under left-wing and union pressure,
France’s new Socialist government called a European conference on unemployment in
late November to set goals for reducing unemployment. Its proposals were derided by
conservative German Chancellor Helmut Kohl, whose party will likely lose at the polls next
year. Kohl announced even before the conference opened that "we will make no
decisions which require additional funding," in other words, no government-funded
jobs programs.

In Italy, the debate came home with a vengeance in September, when the PDS government
announced a budget which included pension cuts and no new measures to fight unemployment.
The Rifondazione announced it would vote against the budget and threatened to bring down
the government.

Ramon Mantovani, a party deputy responsible for international affairs, explained their
side of the fall crisis. "We asked the government to make an advance, especially on
unemployment. We wanted reforms, not just to defend what already exists." In
particular, Rifondazione wanted the work week reduced from 40 to 35 hours, a demand
supported in the past by virtually every union and progressive party in Europe. Shorter
hours, it claimed, would force large employers to hire additional workers. When the PDS
didn’t respond, the Rifondazione withdrew its votes.

In a strange twist of historic positions, the PDS and Italy’s left-wing labor
federation, the General Confederation of Italian Workers, objected to shortening the work
week. Most unemployment is in the south of the country, they pointed out, where the rate
is over 25 percent, and where the absence of large industrial employers will limit the
proposal’s impact.

In the end, however, the government blinked, and reached a compromise. The Rifondazione
won the 35-hour work week, to be implemented over the next five years. Manual laborers and
people in physically demanding jobs will be exempted from a new, higher retirement age.
"When a young person can’t get into the labor force, because his or her father
or mother has to stay four years longer just to earn a pension," Mantovani charged,
"it doesn’t make sense to boost the retirement age."

Government privatization plans continue, however. Next on the auction block are
Italy’s banks and railroads. Selling them off will undoubtedly provoke another wave
of layoffs, as new owners seek to boost profit margins by trimming the workforce. One PDS
economic analyst speculates that some unemployment could be absorbed by new tourism
development projects. But while the tourist industry is growing, it generally provides
very low-wage jobs.

Nevertheless, Italy’s more militant left came away feeling that it might yet be
possible to turn back the tide of concessions. "It was a big achievement,"
Mantovani crowed, "the first time in 20 years that we’ve been able to impose
limitations on the market. For the last two decades, the market has been able to eliminate
rights and social benefits we achieved years before. Now we think it’s possible to
speak of another Europe, not just one of the market and of profit, but a social Europe, a
people’s Europe."

Being militant has paid off in elections. Rifondazione only won the votes of 6 out of
every 100 young people between 18 and 25 in 1992, its first foray on the ballot. By 1996,
it had increased its showing to 22 percent of that crucial age group.

In reality, Rifondazione is no more the model of an old-style communist party than the
PDS. It calls for legalizing drugs to stop the illegal drug trade. Italy’s first
openly gay deputy, Nikki Vendola, is a Rifondazione member, and vice-chair of the
parliament’s anti-Mafia commission. Together with the PDS, the Rifondazione has
passed legislation allowing immigrants to enter Italy to look for work, and giving them
the right to vote in local elections.

The monolithic European left, if it ever really existed at all, certainly doesn’t
any longer. "There is no Communist movement internationally anymore," Mantovani
said, with little apparent regret. "There are two lefts in Europe now. One accepts
globalization, and wants to direct it. The other wants to leave that system, by reform or
other means."

For over a century, the idea of a socialist alternative provided the glue which held
the European left together, and the strength and unity needed to achieve even more limited

Without that common vision, its become very difficult even to agree on a direction. The
left may have new power in Italy and Europe, but the new world order has it deeply

David Bacon is a freelance writer and photographer, and a regular contributor to
<W0>Z Magazine on labor issues.