New Crisis, New Realignments, New Solutions: Time for Another Breakthrough in Italian Politics and Public Policy?

Trapped in recession, mired in public debt and badly in need of a boost to international competitiveness, Italy is in a worse economic shape in 2014 than ever since the Second World War. With politics in flux and showing no sign of consolidation, the chances of decisive policy action to resolve the situation seem meager. Experts of Italian politics and especially experts of the politics of economic adjustment point pessimistically to the lack of political developments – effective technocratic action and tripartite compromises in the form of social pacts – that were crucial in helping Italy defeat its last similarly significant crisis at the beginning of the 1990s (Culpepper 2014, Culpepper and Regan 2014). In contrast to these opinions, this paper argues that the political situation is much more similar to that of the early 1990s than it first appears. It analyses the structure of societal coalitions that underlie political developments and contends that – similarly to the early 1990s – there are clear signs that societal coalitions are realigning in a way that allows for the resolution of political gridlock and clears the way for resolute reform. Thereby, it provides an optimistic prognosis for the chances of economic and political dénouement in the coming years.