7. Assessing the Italian Experience in the Eurozone

The neo-functionalist case automatically linking the establishment of the EMU to the flexibility of labour markets seems to conceal a number of power struggles amongst the different socioeconomic groups at both the national and the transnational levels.

Indeed, the implementation of an EU employment strategy relying significantly on labour market flexibility, the rationale of which is often neo-functionally linked to the establishment of the EMU, is certainly not the only possible approach to growth and employment especially in the context of globalisation. On the contrary, it is interpreted here as the outcome of a series of political decisions taken by the member states within the context of the EU institutions and procedures. Furthermore, the implementation of flexible labour market policies was itself made possible by the strengthening of the bargaining power of employers’ organisations which was reflected in the institutionalisation at the European level of the neo-liberal economic paradigm focusing on the implementation of strict monetary and fiscal policies.

Whereas the chapter clearly demonstrates that in the Italian case this power battle was certainly won by the leading socioeconomic actors, and this is reflected in the demise of the Unions’ bargaining position, what the Italian capitalist elite failed to realise is that winning this battle against organised labour at the national level was not a solution to the problem of competitiveness in the globalisation era.

If it is true that the process of globalisation has modified the role of the nation state from the welfare model to the Anglo-Saxon model or ‘competition state’ (Cerny 1999), it might be argued that the Italian capitalist elite failed to realise its project of transnationalisation and succumbed to the more powerful capitalist elites from outside Italy, those financial markets actively operating for the liberalization of the Italian ‘Salotto Buono’.

Of course the Global financial crisis on one side, and the asymmetries of the EMU on the other, acted as catalysts for the weaknesses of the Italian capitalist system to appear clearly to financial markets and therefore unleash speculation.

Indeed, whereas the Italian capitalist elite only relied on ‘Internal devaluation’ and labour market flexibility to boost its competitiveness in a totally fixed exchange rate environment, this did not prove a successful strategy and produced a progressive peripherisation not only of the country as a whole, but also, in particular, of its capitalist class.