Europe's Slow Turn Right
Italy: Reforms Taking Hold?

To an Italian, the government working to accelerate business deals—particularly international business deals—sounds a bit like cats lying down with dogs, or even wolves making peace with sheep. But according to The Financial Times, it’s starting to happen:

At first glance, recent high-profile corporate events in Italy — tyremaker Pirelli’s €7bn sale to ChemChina, oil group Eni’s dividend cut and Yoox’s takeover of online fashion retailer Net-a-Porter — appear to have little in common. But together they tell a story about a shifting in industrial policy in Italy and a new openness to foreign investment.

[…] While Italy’s government has traditionally been lax in supporting the private sector with trade missions, Mr Renzi has become a cheerleader of Italian corporate activity abroad. This week, he trumpeted Yoox’s takeover of Swiss Net-a-Porter. According to the chairman of one of Italy’s most international groups, one of the surprises from Mr Renzi is that he will get on the phone and say: “What can I do to help you?”

We should stress that the FT piece, so far, is anecdotes, not data (even if some of these companies are big and important.) These are positive signs, but the real tests still lie ahead—which is pretty much the usual story for Italy.

Stories like this are illustrative not so much of quick breakthroughs and economic miracle cures as of the European left’s slow and reluctant abandonment of some of its most cherished beliefs. The last two decades have seen leaders of once truly left-wing parties embrace, however reluctantly, important market reforms: Schroeder’s SPD put through big reforms in Germany, as did Tony Blair in UK; Hollande is now trying in France, and Renzi in Italy.
All have found it very hard uphill going all the way, but reform is nonetheless vital—and compelled by the facts on the ground. Yet public opinion is a real thing, and many people in Europe have never really bought into the ideas of capitalism.
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