Italy’s bosses rail at political ‘losers’

Italian business leaders have reacted with fury and alarm at the failure of any of the country’s politicians to gain a clear majority at this week’s general election, fearing much-needed reforms will be stalled by gridlock in Rome – or worse, torpedoed by the anti-establishment party led by Beppe Grillo.

Expressing the view of many executives, Enrico Cucchiani, chief executive of Intesa Sanpaolo, Italy’s largest retail bank, was universally damning in his view of the outcome.

“I don’t see any winners in this election, just losers. I think Italy altogether is losing because we are going to face a period of uncertainty; Italians are losing out because I doubt that we can see in the very short term the kind of structural reforms that are needed.

“And also politicians are the real losers, or a generation of politicians, because basically this has been a vote of no-confidence in them,” Mr Cucchiani said.

One of Italy’s most respected senior executives told the FT on condition of anonymity: “I am mortified by the result. It has brought shame on Italy. We are suffering a complete collapse of faith in our institutions that is terrifying. We need rejuvenation.”

Giorgio Squinzi, the usually mild-mannered head of Italian business lobby Confindustria, was no less damning, predicting that “the next six months will be terrible, the worst in the next 50 years”.

Mr Squinzi slammed Mr Grillo’s Five Star Movement, which took about a quarter of the national vote after campaigning against big business, bankers and infrastructure projects such as a fast-speed train line across northern Italy.

“If we apply any of Grillo’s agenda, Italian business is finished. We’ll turn into a country made up of rustics and farmers,” Mr Squinzi said.

Italian business is already struggling to survive a nearly two-year recession, and the political chaos unleashed by Monday’s inconclusive election result has overlaid a sense of deep gloom with a feeling of anger at politicians, even desperation.

Their thinking about what should come next ranges from support for a grand coalition to a desire for new elections to bring fresh politicians to the fore – such as the 38-year-old Florentine mayor Matteo Renzi, who has courted the business community.

A senior executive at one of Italy’s largest companies said: “Renzi is a new face for the future. He is more of a centrist and is willing to listen and learn about the needs of the business community. This is the reason why Berlusconi was afraid of him.”

While executives voiced concern over the rise of Mr Grillo and anti-establishment sentiment, many also conceded it was a clear message to the ruling classes over their failure to heed popular – and business – anger at austerity measures meted out by Mario Monti’s technocratic government.

“We are facing reality and this change may also be useful for Europe,” said Marco Tronchetti Provera, chairman and chief executive of Pirelli. “We’ve discovered there is a limit to the burden people will take . . . We have to balance the needs of the younger generation and the needs of employment with fiscal [austerity].”

He added: “What I think is the politicians should have understood there is a need for a change. Some politicians have to step back, some new faces have to come up. And we have to be very consistent knowing that nothing can be done if we are not together with Europe.

“I believe President [Giorgio] Napolitano will have to work hard in the next weeks to find ways to give guarantees to the outside world that Italy hasn’t left the traditional way of being part of Europe. The majority of the people are for Europe.”

Executives also expressed consternation at the failure of politicians of all stripes – including Pier Luigi Bersani’s centre-left Democrats and Silvio Berlusconi’s centre-right – to address the issues of the real economy in the election campaign.

Many executives privately complained in the run-up to the vote that Mr Monti’s background as an economics professor meant he was deaf to the needs of the real economy, and his punishing taxes had crippled consumption which was now falling to 20-year lows.

“To lower the stock of public debt we need to talk about something that no politicians have talked about in the last few years, which is privatisations,” said Rodolfo De Benedetti, chief executive CIR, one of Italy’s largest industrial groups. “I don’t understand why a country that has the kind of debt level that Italy has is not putting this at the centre of the political debate.”

Like the Confindustria lobby, Mr De Benedetti advocates tax cuts, tighter controls on state spending and greater liberalisation to decrease Italy’s nearly 130 per cent of debt to GDP.

He expressed his “disappointment” with the election result. “What business and many other people hoped for was a clear majority that would empower a government, with a clear mandate for the next five years to embark on a series of important structural reforms that this country needs.”

Some business figures are more sanguine about the election result, however.

Leonardo del Vecchio, founder of Luxottica, the maker of Rayban sunglasses and one of Italy’s largest companies, said he did not “consider the situation to be too bad because I have a lot of faith in the young. This will rejuvenate those who lead, so I don’t see it as a bad thing and I’m calm.”

Regarding the success of Beppe Grillo, Mr Del Vecchio said he was “initially stunned. But after sleeping on it, I said maybe this is good for Italy.”

Raffaele Jerusalmi, chief executive of the Italian stock exchange, said this was merely a “transition phase”. “After the initial emotional reaction, I think we will have a more stable government in just a few months,” he said, expecting another round of elections within the next few months.