Italy's mess dismays businessComment on this story
Milan - From bankers and sportscar designers to family pasta makers, Italy's business leaders are in shock at election results that threaten political stalemate and may delay reforms they say are vital to revive a flatlining economy.
“Che casino!” - what a mess - exclaimed one of the country's leading bankers, speaking in a personal capacity.
“I'm in shock,” the senior executive told Reuters, summing up a widespread feeling of dismay on Tuesday after a protest party headed by a comedian topped the poll and no political bloc secured enough seats to form a majority in parliament.
“This is probably the worst possible scenario,” said Francesco Divella, whose family began selling pasta under its eponymous brand in 1890 in the southern region of Puglia.
The stock market plunged more than 4 percent and government borrowing costs jumped as investors took fright at the deadlock, which rekindled fears of a new euro zone debt crisis.
Pasta maker Divella said Italy needed a strong government to tackle bottlenecks that many in business see as strangling its economy - a rigid labour market, high taxes, an uncompetitive services sector, stifling red tape and ageing infrastructure.
Another industrial boss spoke of shifting business abroad.
With a public debt of 2 trillion euros and its history of anaemic growth rates, the euro zone's third biggest economy - whose borrowing costs spiralled almost out of control at the end of 2011 - can hardly afford a prolonged limbo as manufacturers with a record of export success struggle for competitiveness.
“We are very concerned about the uncertainty and apparent ungovernability,” said Silvio Pietro Angori, chief executive of Pininfarina, which has designed Ferrari sportscars since 1950.
“A company competing on the global markets like Pininfarina needs the support of a stable government that inspires trust and can make long-term decisions.”
Yet more uncertainty is exactly where things are heading as the alternative to a new election would be a grand coalition between Silvio Berlusconi's centre-right and the centre-left of Pier Luigi Bersani - veteran foes who may struggle to work together. Anti-establishment comic Beppe Grillo, with 25 percent of the vote, has shown little interest in cooperating.
Few industrialists thought that a grand left-right coalition option can produce a viable executive that could govern for more than a few months.
“I can't see the light at the end of the tunnel,” said Luigi Morelli, owner of a paper company in the southern city of Bari which has seen sales plunge by 40 percent in two years.
“I am not expecting anything because I don't think we will have a stable government that can last beyond the summer.
“I am even thinking of moving my company abroad.”
From 2000 to 2010, average annual Italian growth was less than 0.3 percent, making it not only the most sluggish economy in the euro zone but the most inert in the world, barring only desperately poor Zimbabwe, Eritrea and Haiti.
Italy's economy has actually contracted for six consecutive quarters, shrinking 2.2 percent in 2012, and is expected by the European Commission to contract by 1 percent this year.
“Whether it's Berlusconi or Bersani or whoever, the important thing is to have a government that lasts five years, carries out the reforms and helps the people because they are desperate,” said Siro Badon, who voted for the centre-right and owns a shoe-manufacturing business near Venice.
Amid the prevailing pessimism, some sought to find a silver lining in the stunning success of Grillo's 5-Star Movement. His programme, which took votes from left and right alike, includes cuts in politicians' perks, a minimum income for the unemployed, clean energy and free Internet access.
For Pietro Colucci, head of renewable energy operator Kinexia, a Grillo input to policy could be welcome: “Grillo has two things in his DNA: green economy and technology. We have both so that's good for us.”
Either way, Colucci said Italians shouldn't panic: “Italy survived the fall of the Roman empire,” he said. “And we'll survive this, despite instability in the short term.” - Reuters