Opinion: Regional disparities strike back in northern Italy

A map showing the Italian regions of Lombardy and Veneto, with their capitals, Milan and Venice, and the Italian capital, Rome.
The northern Italian regions of Lombardy and Veneto may not become the EU’s next separatist headache, but support for greater autonomy is strong (source: macpixxel for GIS)

In two nonbinding referenda on October 22, the northern Italian regions of Lombardy and Veneto overwhelmingly voted for greater autonomy. Voters endorsed their local governments’ endeavor to seek more say in 23 matters, including education, scientific research and infrastructure.

Such votes are allowed by the Italian constitution. The regional executives could have even made a request for more autonomy without seeking a popular mandate, but as similar initiatives had been turned down before, Lombardy President Roberto Maroni and Veneto President Luca Zaia called citizens to the ballot box.

Some 58 percent of the eligible voters turned out in Veneto, and 39 percent in Lombardy. Of those, about 98 percent voted for more autonomy in Veneto, and 95 percent in Lombardy.

The turnout was impressive, considering the referenda had no immediate impact (other than to strengthen the local leaders’ mandate to negotiate with Rome) and were underreported in the media. In Lombardy especially, the referendum campaign was fairly quiet, with the exception of a late endorsement from former Prime Minister Silvio Berlusconi.

Autonomy would not translate into a free pass to cut taxes

The only political leader at a national level who seemed to have devoted attention to the votes was former Prime Minister Matteo Renzi, whose opposition ended up helping proponents of the referenda a great deal. Even within Mr. Renzi’s own party, a small but not insignificant group of mayors in Lombardy and Veneto campaigned for more autonomy.

Persistent disparities

Autonomy would not translate into a free pass to cut taxes, but the issue of collecting and managing fiscal resources was the one that attracted the most voters. The so-called “fiscal residuum” (the difference in expenditure on a region versus the taxes it pays) has been persistently negative for Italy’s north and positive for the south. The government of Lombardy (Italy’s richest region) estimates the figure at a staggering 54 billion euros. Moreover, the constant influx of tax money into the south has hardly benefited the local economy.

Luca Zaia, president of the Veneto region
President of Veneto Luca Zaia may be eyeing the premiership, now that voters have given him a mandate to seek more autonomy for the region (source: dpa)

When Germany was reunified, the gross domestic product (GDP) per capita in the former East Germany was just a bit more than one-third of the level in the former West Germany. Today it is about two-thirds. So while the gap has not vanished, it has been greatly reduced. Italy, on the other hand, was unified more than 150 years ago, and yet GDP per capita in the south is still only around 55 percent that of the north. There is virtually no other example – certainly among developed countries – of a nation where regional differences have been so resilient, and indeed so divergent, for so long.

If the disease is well known, so is the cure that has been invariably prescribed: redistribution. But having money is the end of the process of economic growth, not its beginning, as development economist Peter T. Bauer once remarked. Tax revenue from the north has allowed the government to become the largest employer in southern Italy, luring talent away from private businesses.

Scenarios

The referenda have put federalism back on the table nationwide. The evolution of the Northern League, now more of an anti-immigration party than an advocate for the north, and Mr. Renzi’s attempts to re-centralize matters that were devolved to regions years ago, made the referenda seem anachronistic to many. But though these problems have been swept under the rug, they have not gone away.

The votes have reminded us all that regional disparities are perhaps the Italian question

Some people believe that the votes portend greater autonomy for northern Italian regions. But given the many false starts throughout history in their quest for greater independence, that seems like a stretch. A more conspicuous grassroots movement in favor of the regions’ fundamental right to self-determination would be needed. So far, no major political figure wants to engage in such a movement.

Others think this episode will end “all’italiana,” with Mr. Zaia using his Venetian triumph as the springboard to the premiership after the next election, if an alliance between the Northern League and Silvio Berlusconi’s Forza Italia wins.

Still others predict that the process of gaining more autonomy as allowed by the Italian constitution is so complex and convoluted that things may only change on the surface, with the underlying status quo remaining intact.

Regardless of the outcome, the votes have reminded us all that regional disparities are perhaps the Italian question – and their consequences have become all too clear.

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