Italian Prime Minister Mario Monti’s resolve to push through aggressive austerity and economic reform efforts are receiving their first real test as truckers’ blockades throughout the country threaten to strangle the life out of the biggest cities.
Strikes and road blockades that started in Sicily last week have reached Rome, disrupting food and fuel supplies to the city. The truckers have snarled traffic on the main highways and toll stations leading into Rome, and other big cities, and have vowed to keep the protest intact until at least Friday.
In central Rome, fresh fruit, vegetables and fish were in short supply in some covered markets and supermarkets. At least half the stalls in one well-known market, in the Testaccio neighbourhood, were closed Wednesday for lack of supplies. Some shop owners urged customers to load up because they were unsure when delivery trucks would next appear.
Wednesday’s newspapers reported that up to 80 per cent of the distribution of fresh fruit and vegetables in Rome had vanished, and 90 per cent of the fresh fish. Prices for some vegetables still available, including zucchini and Sicilian peppers, had doubled as some customers were gripped by the urge to hoard.
The Italian news agency ANSA reported that 50,000 tonnes of food was going to waste every day because it can’t be delivered, according to the Italian farmers’ association Coldiretti.
Fiat SpA, the Italian auto giant that controls Chrysler, said on Tuesday that production would stop at four of its factories because of the truckers’ blockade, which is crimping the supply of parts and components.
As tempers flared, violence erupted in some cities. In central Rome on Wednesday, two of the hundreds of fishermen protesting soaring fuel prices were injured in clashes with the police. Earlier in the week, in the northern town of Asti, a trucker was run over and killed by a truck driver from Germany, who was not taking part in the protests.
The protests came as the debt crisis and austerity programs triggered new tensions in the 17-country euro zone. In Portugal, one of the three bailed-out euro zone countries, yields on three-year bonds reached an all-time high of 19.4 per cent as fears of default gripped the debt markets.
On the same day, German Chancellor Angela Merkel told The Guardian and other European newspapers that two years of efforts to save Greece from economic and financial collapse were not working. “We haven’t overcome the crisis yet,” she said. “Of course, there’s Greece, a special case where, despite all the efforts that have been made, neither the Greeks themselves nor the international community have yet managed to stabilize the situation.”
Italian truck drivers are blocking highways and roads to protest against Mr. Monti’s austerity and economic liberalization plans, which are pushing up fuel prices and threaten to open certain professions to competition that they do not want.
Mr. Monti’s unelected government, which replaced Silvio Berlusconi’s tarnished administration in November, has condemned the blockades and has vowed to forge ahead with the liberalization program. It argues that it is essential if Italy’s sclerotic economy, which fell back into recession in late 2011, is to regain its competitiveness. “More competition means giving more space to young people, less for privileges,” Mr. Monti said last week.
The liberalization effort is part two of Mr. Monti’s fast-track “Save Italy” effort. The first part, which came last month, was a €30-billion ($39-billionCDN) austerity program anchored by higher taxes and cuts to public spending. Its goal is to eliminate the relatively small budget deficit by 2013. The second part is the liberalization package, designed to pry open the guilds that protect the jobs of taxi drivers, truckers, gas station owners, pharmacists, notaries and lawyers.
The effort includes proposals to reduce natural gas prices, car insurance costs and bank account fees. Mr. Monti also plans a flurry of privatizations.
His campaign will not be easy. But so far, his Save Italy program has broad popular support, especially among young Italians, who have always had trouble penetrating the protected professions. In November, Italy’s unemployment rate among 15-to-24-year-olds reached 30 per cent, a record high.
Success in busting open the protected professions would no doubt make Italy more competitive. The country’s antitrust agency has said that professional liberalization could boost the economy by 1.5 per cent a year. The Organization for Economic Co-operation and Development said that eliminating barriers to commerce could boost productivity by more than 14 per cent over the next decade.