This article originally appeared in


     
27 July, 2006
   
  Protesters take on Prodi reform

Protests threaten to back Italy's new PM into a corner as observers ask
how Prodi can win the tougher battles ahead if he fails to win the easy
reform battles intended to give him momentum.

Commentary by Eric J. Lyman in Rome for ISN Security Watch (27/07/06)

If the two-month-old Italian government led by former European commissioner Romano
Prodi turns out to be ineffective, political commentators may look back at the prime
minister's tenure and argue that the turning point came when Prodi backed down from
a bunch of pharmacists.

So far, Prodi has not backed down. But on Wednesday - for the second time in a week
- most of Italy's 16,500 pharmacies closed in protest of a Prodi-sponsored plan to allow
non-prescription drugs like aspirin to be sold in supermarkets.

If the pharmacists do end up blocking the plan (taxi drivers succeeded in using
widespread strikes to reverse deregulation plans for their industry earlier in July) it will
mean Prodi will be 0 for 2 with what he determined to be the low hanging fruit in the
wide-ranging reform process he has vowed to push through.

"Prodi really risks looking ineffective if he blinks first in the staring match with these
pharmacists," says University of Lecce political scientist and commentator Angelo
Pietro. "This is a surprisingly important battle for him."

Opposition parties are probably too off balance to take advantage of Prodi's sputtering
reform process, and so it is unlikely - at least at this point - that a short string of failures
could force the government from power. A more likely result is a long-lasting
government that proves to be as ineffectual as other recent governments that never
contemplated such a reform process as ambitious as Prodi's.

Italy's trade unions and professional associations have been a powerful force in Italian
politics for decades. Prodi campaigned on a platform of taking those groups on as a
way to trim the fat off the Italian economy by lowering costs, improving efficiency,
broadening the tax base and reducing unemployment.

The economy can use all the help it can get. Italy's public deficit is set to remain above
4 percent of the country's gross domestic product for the second consecutive year in
2006 - well above the EU cap of 3 percent of gross domestic product (GDP). Growth
has been anemic: Italy has had the slowest growing economy in the EU each of the
last three years and the country has failed to surpass the EU average growth rate in
any single year since 1995. In terms of economic competitiveness, Italy ranks in some
categories behind some emerging economies such as Brazil, Mexico, India and South
Africa.

Prodi's strategy had been to push through the least controversial reforms early:
allowing for more competition in the taxi sector came first, followed by taking some
rights away from pharmacists who have exclusive government permission to sell
anything considered "medicine." (As a result, an aspirin in Rome costs nearly four
times as much as it does in London, Europe's most expensive city).

Next in line is the media sector - where Prodi will take on the Mediaset empire controlled
by former prime minister and political rival Silvio Berlusconi - followed later by minimum
attorney's fees and banking costs, the beleaguered public pension system, bloated
government bureaucracies, tax structure and labor laws.

The question insiders must be asking is: How can Prodi hope to succeed in his
toughest battles when he failed with the purportedly easy reforms aimed to give him
momentum?

For his part, Prodi is philosophical about the recent developments, calling the reform
process a marathon rather than a sprint. "In the long term, I promise that Italy will lose
ten kilos of fat and gain five kilos of muscle," a confident Prodi said.

But despite their leader's bravado, Prodi's advisers admit that the pharmacy
showdown will be a key one - important enough for the prime minister to hold strategy
sessions on the topic even while at the G8 summit last week in Russia.

Pharmacists argue that allowing untrained workers to sell items like aspirin could
endanger consumers. Advocates of the plan say that limiting sales points to
pharmacies only limits choice and keeps prices artificially high. Neither side seems
willing to budge.

While nobody thinks that giving Italians access to inexpensive aspirin will cure the
country's economic woes, it is hard to believe the problems will be solved without
accomplishing at least that much.

And while the battle rages, it is threatening to become enough of a headache for Italy's
leadership that it could leave a frustrated Prodi reaching for some of the inexpensive
aspirin he has been pushing - for himself.


Eric J. Lyman is ISN Security Watch's senior correspondent in Rome.

The views and opinions expressed herein are those of the author only, not the
International Relations and Security Network (ISN).