Notebook

October 31, 2011 10:52 pm

‘Baby pensioners’ face a beating

“All politics is local.” That favourite cliché may well apply in the US where Tip O’Neill, former speaker of the House, is said to have coined the phrase 30 years ago, but in Italy it can get awfully personal.

Gianfranco Fini, speaker of the Italian lower house who defected from the government majority last year, fired the latest salvo in the national furore over “baby pensioners”, wryly noting on a television talk show that the wife of Umberto Bossi, minister for “reforms” and stalwart opponent of pension reform, had retired as a teacher in 1992 at the age of 39.

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The next morning – coincidentally when a decorous German parliament was overwhelmingly lending its support to Angela Merkel on her way to the Brussels summit – Italy’s lower house erupted in turmoil with cries for Mr Fini’s resignation and fisticuffs between one of his members of parliament and a rival from Mr Bossi’s Northern League.

The media has had a field-day, listing Italy’s famous baby-pensioners benefiting from the seniority pension system that still allows workers to retire before the age of 60 if they have paid 40 years of contributions, and which used to give pensions after just 14½ years of service until reforms started in 1992.

According to the usually government-friendly daily Libero, these young retirees include the wife and sister of Giulio Tremonti, finance minister, while La Stampa reports that Mario Draghi – who clocks in at the European Central Bank on Tuesday – received a baby-pension of €8,614 a month at the age of 57 in 2005, the year he was appointed governor of the Bank of Italy (which has not yet commented on the report).

Mr Draghi, 64, is now leading the pressure on Silvio Berlusconi’s centre-right coalition to reform the system. He will be setting a fine example at the ECB where his eight-year term will take him to the ripe age of 72. The Northern League’s hostility to what it calls Mr Draghi’s “pistol-pointing” is very much about local politics, however.

The industrial north of Italy, the party’s heartland, is home to 3m of the country’s 4m “baby pensioners” who cost the system some €9.5bn a year and on average can expect to receive their monthly cheques for nearly half their lives.

Troublesome youths

Pierluigi Bersani, the 60-year-old leader of the opposition Democratic party, has some personal problems with youngsters, too, though unfortunately for him none of them are contemplating early retirement. With speculation mounting over early general elections, Matteo Renzi, 36-year-old mayor of Florence and the party’s rising star, has hurled down the leadership gauntlet, saying the Democrats need new faces, not new emblems and old bureaucrats. Mr Bersani’s ill-judged riposte was that he should stop “kicking the pram” to which Mr Renzi’s ready reply was: “I am not a donkey.”

Behind the sparring, however, lie some real issues for the disparate Democrats who have struggled to forge an identity, with Mr Renzi’s more business-friendly reformist approach up against those closer to the trade unions rejecting the diktat of Mr Draghi and Brussels.

A lemon or a flag?

Mr Berlusconi usually gets into hot water when commenting on the fairer sex but his latest faux pas concerns no less an important topic for Italians – the euro. A “strange” currency that “has convinced no one”, the prime minister said on his return from EU summitry, noting that it lacked the support of a government, state or lender of last resort. Seeing his comments interpreted as a feeble defence of the euro, he issued a clarification: “The euro is our currency, our national flag. And it is to defend the euro from speculative attacks that Italy is making heavy sacrifices.”

Apart from economists who pointed out that it was actually the sovereign debts of spendthrift countries like Italy that were under attack, Il Giornale, owned by the Berlusconi family, further muddied the waters with a front-page headline declaring the euro a “lemon” and a “swindle”. The common currency’s hurried introduction had been crazily celebrated as if the World Cup had been won but, the daily maintained, had only halved the value of Italian salaries. But, it added, there was no alternative, just as Mr Berlusconi says of his disintegrating government. Many Italians would agree, but that is of little comfort.

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