Taking Out the Trash

Eating mozzarella cheese is becoming a test of patriotism in Italy. But not just any mozzarella. No, this has to be cheese made from the milk of water buffaloes raised in the region around Naples. The product is a prestige export and the industry is vital to the local economy, but after years in which mountains of garbage have piled high on Neapolitan streets and people have taken to dumping rotting refuse more or less anywhere they please, poisonous dioxins have started turning up in the buffalo milk. The levels are only fractionally above European norms. But the crisis is so symptomatic of what's gone wrong in Italy that it's become an issue in the current political campaign.

"When was the last time you ate buffalo mozzarella?" NEWSWEEK asked center-left candidate for prime minister Walter Veltroni on a dusty campaign bus rumbling through the Sicilian countryside last week. "A couple of days ago," said the mild-mannered former mayor of Rome. "I'm not afraid. Our world today is a world that embraces fear—and that is what scares me." His tone may be quiet, but after 30 years in politics he knows how to stay on message. His main rival, center-right former prime minister Silvio Berlusconi, has built his political career not least by playing on concerns among small-business owners and conservative Roman Catholics about the power of erstwhile communists like Veltroni in Italian politics. "Fear is something that is easy to sell," says Veltroni. "It is much easier to sell fear than hope. We are investing in hope."

Yet the greatest fear of each candidate may well be that he'll win—only to preside over yet another Italian government crippled by fractious political parties and shaky coalitions in the two houses of Parliament. Such a regime cannot even begin to save Italy from a mountain of economic and political woes. The economy is flat, verging on recession. Technically a member of the G8, a group of the world's most industrialized countries, Italy has had almost no growth for a decade and salaries, as a function of purchasing power, are half that of Britain. Its debt is so massive that every man, woman, child and newborn is being charged €1,200 a year for interest payments alone. And all signs point to the situation getting worse.

For that very reason, only a few months ago Veltroni and Berlusconi were moving toward each other like old heavyweight fighters asked to sit on the board of the same charity. A jab here, a feint there, and they were just about to get down to the first order of business: an electoral law that would take away the power of the splinter groups that have made and broken so many governments. The then Prime Minister Romano Prodi proved unable to prevent the collapse of his lackluster leftist government (which included 11 parties); new elections were called and Italy looked like it would go back to politics as usual. But that isn't what's happened—and in that fact lies some real hope for the future.

Veltroni refused to run in a coalition with the troublesome little parties of the extreme left. Berlusconi teamed up with some of his old allies, but made it absolutely clear it was all about him, not them. For the first time in modern Italian history, the election, to be held on April 13 and 14, presents the semblance of a real two-party contest. If the candidates are serious about solving Italy's problems, they'll leave the door wide open to the possibility of a "grand coalition" once the votes are counted—even if neither is quite ready to say yes to that proposal in public, although Veltroni strongly hints that he would. Berlusconi rejects the idea for the moment, but has joked that their policies on several issues are so close that Veltroni has been stealing from his platform.

The personalities don't mix well, that's for sure. Berlusconi, a former singer on cruise boats who became a billionaire by building an empire of privately owned television stations, is without question Italy's most entertaining politician. During his one full term as prime minister, from 2001 to 2006, Berlusconi's family not only kept control of his own empire, but he gained control of the powerful state broadcasting networks. He also has major interests in leading media outlets. Although the courts have pursued Berlusconi relentlessly on various charges of shady business dealings, he managed to beat the rap in every case. Now 71, he looks much younger, thanks to his undeniable personal energy and a few equally undeniable cosmetic touches, including the color and quantity of his hair.

Veltroni, at 52, would be the youngest prime minister ever elected in postwar Italy, but his look is gray with glasses, a little disheveled, shy and professorial. But Veltroni is no neophyte. His career in politics goes back 30 years, beginning as a young activist in the Italian Communist Party and developing into a full-blown apparatchik. After the collapse of the Soviet Union discredited the message, Veltroni saw centrism as the key to his political future. Compared with the previous leader of the left, the soporific Prodi, Veltroni appears animated even when he's understated. Like any shrewd politician he tries to turn his opponent's strengths against him. "For the past 15 years," he tells a crowd in the Sicilian town of Caltanissetta, "politicians have focused on TV and advertising as if these are the real issues in the country." But Veltroni is not above borrowing, quite blatantly, from the mediagenic campaign of a star in the United States. His slogan is pure Barack Obama: "Si può fare"—"Yes we can."

What would it take to turn "yes we can" into "Silvio and I can"? Conventional wisdom holds that if there were to be a grand coalition, it would come together mainly for electoral reform and then, in relatively short order, everyone would be back at the polls. Yet the basic agenda for Italy may be better addressed by keeping that coalition together. Much of what needs to be done is painful. A weak government can't make it work, and the country's two leading politicians could conclude they're better off taking joint responsibility rather than shouldering the blame for the pain alone. Perhaps most crucial are welfare and labor reforms. Unemployment is low, but so are salaries, trailing behind Spain and Greece. One reform on which both candidates could agree would be to encourage work by lowering taxes on overtime, as the French are doing. Both candidates also recognize the need to make provisions for workers employed on short-term contracts. Their incomes are too low to live on, and they have no income at all when their contracts run out. Equally urgent is the need to reform public administration. The Italian state costs the taxpayer more than the German state does, but provides considerably less. Berlusconi wants to reduce public expenditure by one point every year. Veltroni would do the same, but wants to wait a year before beginning.

An issue that rankles the electorate is the high salaries and seemingly limitless perks of Italy's political class. Again, only a grand-coalition government would stand a prayer of cutting those perks and salaries. And when it comes to taxes, and it always does, both Veltroni and Berlusconi want them reduced. Berlusconi would like to see the total burden on income taken below 40 percent, down from 44 percent now. Both want to spur tourism by reducing the value-added tax on things like travel-agency bookings. The Prodi government halted or canceled several big public works and infrastructure projects that Berlusconi had begun. He wants to restart them. So does Veltroni. The only major difference is whether to build a bridge across the Strait of Messina between the mainland and Sicily. Berlusconi wants it. Veltroni's core constituents on the island aren't so enthusiastic.

In the town of Caltanissetta, deep in Sicily's hinterland, 75-year-old pensioner Emilio Serra listened to Veltroni's calls to escape the old chaos of multiple parties with a certain bemused wonderment. "It is more an American way of thinking," says Serra. "I don't see why that wouldn't work here, but I don't think the politicians will allow something so sane." If they do not, then Italy's mad decline will only continue—and that would be something to fear indeed.