Towards the end of this year two shocks have deeply modified the Italian political landscape. The first event was the breaking of People of Freedom (PDL). Silvio Berlusconi, the undisputed master of the party that had supported Enrico Letta’s government in a “grand coalition” with the Democratic Party, hoped in return to get a safe-conduct in relation to the unavoidable conviction sentence. Not only this hope was disappointed, but, according to the law, he has been expelled from the Senate. His reaction has been the withdrawal of the PDL support for the government. This was predictable. But what also happened was the “betrayal” of a part of the leading group of the party. The ministers who he had appointed in the government, including  Angelino Alfano as deputy prime minister, left the PDL, while remaining in the government. That was the first very political defeat of Berlusconi, whose intention was to throw Letta’s government into crisis and force new elections. Is this the very end of the long era of Berlusconi? The question still has no single answer. We'll be back later.

Meanwhile, another event, in many ways even more significant, has also upset the political shape of the Italian left.  Matteo Renzi, the young, charismatic mayor of Florence, has gained a landslide victory in a referendum among the Democratic Party’s members and supporters for his election as general-secretary. This is not an ordinary generational succession at the top of a party. The 38 –year- old Florentine mayor got this stunning success, with a campaign of openly harsh denunciation of the former leadership of the party, pledging a radical political shift.

Just a year ago in the competition to get the nomination for prime minister, Renzi had been defeated by Bersani, then the party’s secretary. What has fostered the turn? In effect, Renzi has been able to hoard and exploit the disillusion of militants and sympathisers  for the inability of the party to outline a strategy to face the crisis, along with its earlier decision to support Mario Monti’s technocratic government and, then, entering the grand coalition with Berlusconi’s PDL.

Bill Emmot, former editor of the Economist , has compared the success of Renzi to that of Blair, able to impose the passage from the “old” to the New Labour. Yet the differences are important. It is hard to be Blair in a monetary union under german leadership. However, Blair took over a party that had experienced almost two decades of Thatcherism and hard neo-conservative social reforms. 

Mr. Renzi comes to the leadership in a country in the middle of an unresolved  crisis. The policy of austerity imposed by the Berlin – Brussels consensus produced disastrous results. Italy is in its third year of recession. Even 2013 is going to close with a recession of 1,8 percent , the most severe in the eurozone, Greece excluded, while unemployment has doubled since the beginning of the crisis. For 2014, the OECD predicts an uncertain, pale growth of zero point something, with the only certainty being  a further increase in unemployment , which has already exceeded 12 percent of the labor force, with more than 40 per cent of young unemployed.

Tony Blair, even while maintaining a neoliberal agenda, was able to attenuate it with a “human face”. On the contrary In Italy, the continuation of austerity, without a radical reversal that is not on the horizon, augurs only new sacrifices in an already wretched situation. For 2014 Brussels intends to obliges Italy to cut the budget deficit below the current 3 per cent, despite this level  already being lower than that of some bigger countries such as France ( 4.1 ), Spain ( 7.1 ) and to make a comparison with a non-euro country, lower than in Britain ( 7,2).

The mindless austerity policy imposed by the technocracy of Brussels, supported by Germany, continues to demand cuts in the government spending, while taxes are increasing, in order to accelerate the march toward a balanced budget. At the same time, according to the fiscal compact, Italy should  be ready for a cut in its debt close to 50 billion euro in order to reach in 20 years the parameter of 60 per cent of GDP. Indeed, a manifest non-sense policy in a lasting framework of stagnation and growing unemployment.

During his campaign, Renzi has swung between protest against “heartless” Brussels’ technocrats and a Hamiltonian appeal for a United States of Europe. Yet nothing of what he proposes to do, as new-secretary of PD and next candidate for the premiership, is new in relation to European austerity policies. Rather, his program is in line with the Brussels’ claims for further “structural reforms”: further flexibility (deregulation)of the labor market and wages, further cuts in pensions and further privatization of public services.

The Italian élite has welcomed the turnaround  pledged by the new-secretary, hoping that, after the unreliable Berlusconi , the Democratic Party will make a final break from former leftwing policies. Yet the risk is to confound wish-think with realities. Berlusconi is seriously wounded, but not politically dead. He reacted to the loss of control over the PDL by dissolving it, and recasting the old "Forza Italia ", the party with which he began his political misadventure twenty years ago.

As the parties of the center-right have always merged into a unified coalition before elections, and Forza Italia still is the heart of the center-right coalition, not surprisingly, the splitters, led by the current deputy prime minister Mr. Alfano, have already announced that when the moment of the truth will arrive, they are ready to come back to the old electoral coalition under Berlusconi's sponsorship - even though he, being barred from public office, will not be a candidate (a role that will likely be taken by one of his daughters in a dynastic succession).

In other words, the result of a direct confrontation remains uncertain in a context in which the left is traditionally marked by internal divisions, while the right has no problem to coalesce, as it always has done, in the name of power-sharing.
In any case, the 2015 is still some time away, while next May will see the elections for the European Parliament . The PD will arrive at that appointment as the head of a government that no longer has Berlusconi’s alibi.  With a sluggish economy and rising unemployment , the party is likely to be caught in a pincer. On one side, the Five stars Movement of Beppe Grillo, which has been the first party in the elections of February, and will catch votes advocating a referendum on the euro. On the other side, Berlusconi’s Forza Italia and what remains of the Northern League, in addition to smaller right-wing parties, ready to wage a battle against the Democratic Party and its government for submitting to the eurozone’s dreadful policies.

Indeed, a strong affirmation of Eurosceptics, if not overtly anti-European, parties in the Italian elections for the European Parliament would be a problem not only for the leftwing main party, but also for the future of the eurozone, and could not be dismissed as an occasional setback. In the absence of an effective commitment aimed to change European strategy, the novelty of Renzi’s success, which fascinates the Italian media and the European oligarchy, is in danger of melting like snow in the sun.

In effect , this should be the season for a major redirection of eurozone policies. If the eurozone does not change leads to disaster a part of the member states and itself will prompt its disintegration. The new PD’s leadership can’t  keeps hiding the debate on the relationship with the eurozone’s dreadful austerity’s policy, The debate is already open not only on the social consequences,  but also on the degradation of the democratic institutions in the troubled countries. There are analysis from different points of view (see, Nuti, Paladini, Jespersen, in Insight), as well as different proposals in order to catch viable alternatives . It is crucial to start from the situation as it is, not from abstract and elusive wishful thinking, prompting concrete overhauls that  don’t Imply complex and unlikely Treaty revisions(e.g. in this issue, A Modest Proposal by Yanis Varoufakis , Stuart Holland and James Galbraith).

Until now the  argument  has been choked in the extreme and  paralyzing  alternative: to stay inside or to leave the eurozone. The new PD’s leadership should unlock the discussion on the concrete sustainability of the current eurozone's policy and its possible alternatives.. It would be a noteworthy way to prepare for the European semester, which will be chaired by the Italian government, starting next July. It would give an actual  sense to the political renewal of the Democratic Party in the prospect of the European elections. As well as a  consistent help to the eurozone to transcend its failed policies.