North Italy's success story amid faltering faith in Rome
On the fault line of the eurozone, perched between floundering Rome and efficient Vienna, the small province of South Tyrol is showing that Italy can be economically successful, writes Harriet Alexander in Bolzano.
7:00AM GMT 30 Oct 2011
It is 5am on a crisp Alpine morning, and in the shadow of the Dolomite peaks, an orderly queue is forming in the neatly-swept platz of the mountain town of Bolzano. Striding briskly across the cobbles, the townsfolk wait to petition their regional president Luis Durnwalder, who, between the hours of 6am and 8am, holds a surgery with customary efficiency.
This is not Germany, Austria, or Switzerland, however.
It is Italy – a nation not known for its work ethic or admiration of rules and regulations, and one which, last week, seemed to be teetering on the brink of financial and political meltdown.
"The rest of Italy definitely envies us," said Mr Durnwalder, who is president of the semi-autonomous South Tyrol region. The area, with its bilingual German and Italian population, sits on the geographic, political and cultural fault line of the eurozone. It has almost no unemployment, its inhabitants are among the richest in the country, and in stark contrast to city halls elsewhere in Italy, the local administration has no debt.
"The rest of Italy envies the results," he adds with a chuckle. "But not the work."
Mr Durnwalder, 70, looked on with a deep sigh of exasperation on Wednesday as Silvio Berlusconi, the embattled prime minister, was forced by EU leaders to go to Brussels with a 14-page plan to rescue Italy from economic crisis.
Italy, the euro zone's third largest economy, is again at the centre of the debt crisis, as fears grow that its borrowing costs could hit levels that overwhelm the capacity of the bloc to provide support amid chronic political instability in Rome. The situation was described as "confused and dramatic" last week by Mario Draghi, the new head of the European Central Bank - who himself is an Italian.
Italy has the second highest public debt in the eurozone after Greece – the equivalent of 120 per cent of GDP – and is suffering from chronically stagnant growth. The three main credit agencies have all downgraded Italy recently, meaning that its economy is judged to be less secure than those of Slovakia and Estonia – the two poorest eurozone countries.
South Tyrol, by contrast, an area of 3,000 square miles and 500,000 inhabitants that retains strong control over its own finances, retains Triple A Star credit rating.
Average GDP per head in the area around Bolzano was €34,600 - more than double that of Sicily, which has a similar degree of autonomy - and South Tyrol's unemployment is barely two per cent. In Sicily it is around 25 per cent, and the regional economy is blighted by corruption, low productivity and poor administration.
The rest of Italy, says Mr Durnwalder, must now likewise learn to live within their means, as they do in the Alpine valleys he calls home.
"We have always had a better economic situation in the north; we work hard, with energy, and use our resources well," he said. "The north has to work to support the south and pay for it.
"Italy is a sick country, but it can be made healthy if population ready to take medicine."
Rather like a naughty schoolboy handing in homework that was very, very overdue, the 14 page document Mr Berlusconi handed to fellow European leaders promises to raise €15 billion over three years by selling off long-moribund state assets and slashing government costs.
In desperate late-night phone calls beforehand, he also persuaded his coalition partner Umberto Bossi of the Northern League to support his proposal to increase the retirement age to 67. But in an indication of the chaotic state of Italian politics, that proposal resulted in a punch-up in parliament, as an argument over the policy descended into a brawl.
Last week there were claims in the Italian press that Mr Berlusconi had made a secret pact with Mr Bossi to call early elections next year, in return for approval of his economic document.
The prime minister angrily denied the reports - dismissing it as a scurilous plot to oust him and claiming that an election campaign in the middle of the euro crisis would be "very seriously damaging to Italy".
But the clamour for him to step down is deafening.
Rioting over austerity measures broke out in Rome the day after he survived a confidence vote, and recent polls show that 62 per cent of Italians think he should step down.
Much of the problem is blamed squarely on his shoulders, and the ongoing sleaze-related criminal charges are, critics say, a fatal distraction at the moment Mr Berlusconi most needs to be in control.
He is currently on trial for bribing a witness, tax fraud and paying for sex with a pole-dancer when she was just 17 - as well as abusing his powers by springing her from custody when she was arrested on suspicion of theft.
"Silvio Berlusconi is not interested in the economy," tutted Mr Durnwalder, sitting back in a leather chair in his spacious office, where oil paintings of village life in the surrounding Dolomites and Alps hang on the walls.
"He promised a lot, but has repeatedly failed to deliver. It will happen again with this rescue plan; the people just don't believe him any more.
"The most telling thing is that when, last week, Angela Merkel and Nicolas Sarkozy were asked about Berlusconi, they just laughed! He does not give a good image of Italy."
While barely a week goes by without Mr Berlusconi's shaky coalition facing a no-confidence vote, Mr Durnwalder is all but uncontested in his northern fiefdom. He has controlled South Tyrol, one of five semi autonomous regions of Italy, since 1989, making him Italy's longest serving ruler. Indeed, one of the country's main political problems, he argues, is that there is no continuity or stability elsewhere.
"In the time I have been in power, there have been 17 different interior ministers," he said. "Most governments only last nine or ten months.
"They come to power for a short time, want to make their mark and win votes by beginning dramatic, spectacular projects, but all they do is create more debt."
Born to a farming family – "with 11 children and five cows, 1,200 metres up in the hills" – Mr Durnwalder studied agriculture and law before becoming first a local mayor, then entering regional politics.
A jovial bear of a man with a bone-crunchingly firm handshake, he has little time for what are widely seen in the north as lazy, work-shy southern Italians. He remedy would begin with honesty – telling the people how bad the situation is, and explaining to them that, for example, the retirement age must be increased because people are living longer and there are fewer economically active members of society.
In South Tyrol, 90 per cent of the taxes collected are spent within the region, meaning that he is able to channel the levys directly into new schools, hospitals and infrastructure. Such fiscal federalism encourages people to pay their taxes, and, he says, should be introduced across the country.
"We have a different way of thinking here in the north, and that's our strength," he said. "We pay our taxes, we work hard, we save and invest.
This region is the point where the northern work ethic meets the southern way of life, and is the best of both worlds. We are not as stubborn as Germany, but nor are we as chaotic as Italy."
The stylish town of Bolzano, which was part of Austria until after the First World War, shows clearly its mix of Teutonic and Latin influences. Carefully-tended vineyards and orchards sweep up the surrounding hillsides; the peaks often crowned with fairytale castles looking down on the valleys.
And the 13th century buildings, their smart, pastel-coloured facades decorated with faded frescoes, have far more in common with Bavarian beer halls than stradas in Sicily or Rome. But while local restaurants sell excellent pizza and pasta as well as wurstel and goulash, some residents would happily part company with Italy altogether.
"We have much more in common with Austrian tradition than Italian," said Beate Hellmundt, 40, selling hand-crafted wooden bowls and glass paintings inside a pretty merchant's palace, dating from 1635. "We work hard, we pay our taxes, and I wish we were back in well-organised Austria.
"Berlusconi is an embarrassment."
It is a view shared by Mr Durnwalder, who fears the prime minister has now made Italy a laughing stock around the world.
He discovered this for himself recently during a visit to Nepal, of all places, when two border guards saw his Italian passport, grinned, and proudly uttered the only Italian phrase they knew. Rather than "buongiorno", it turned out to be "bunga bunga" - the nickname for the notorious sex parties that have sullied Mr Berlusconi's name.
"Silvio Berlusconi must go," said Mr Durnwalder.
"I see him maybe twice a year, and we speak on the phone, but he doesn't ask my advice – he only talks about women!" he laughed.
"At the end of the day, for Italy's sake, for the euro's sake, he must resign.
"We are all in the same ship, so if the ship sinks, we all go down with it. Even those in first class."
