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Italy the Recovery Plan will solve nothing

Marxist Analysis · 2021-06-30

Core Argument

The article argues that Mario Draghi's €248 billion Recovery Plan for Italy is not a genuine programme for economic recovery but a state-managed bailout for Italian capital that leaves workers and youth entirely exposed. The central thesis is that the plan, despite its grandiose presentation, amounts to tinkering around the edges of a deep structural crisis. It funnels the majority of funds directly to businesses — prioritising the strongest firms and the construction sector — while imposing reforms that subordinate education, research, and public administration to the needs of private capital. The lifting of the redundancy ban on 30 June 2021, combined with the end of the eviction freeze, is identified as the moment when the plan's true character will be exposed: workers are treated as dependent variables to be shaped according to the bosses' demands, not as subjects of recovery. The article concludes that the plan will fail to resolve Italian capitalism's crisis but will create the conditions for renewed class struggle by demonstrating that money exists when the ruling class needs it.

Theoretical Grounding

The analysis is grounded in a classical Marxist understanding of the capitalist state as an instrument for managing the interests of the ruling class, not a neutral arbiter of competing social claims. The article draws on the Marxist critique of Keynesian state intervention: the Recovery Plan is presented as a form of state expenditure that props up private accumulation rather than addressing the underlying contradictions of Italian capitalism. The concept of the state as a "committee for managing the common affairs of the whole bourgeoisie" is implicit throughout — the plan's reforms to public administration, procurement, and education are explicitly designed to make Italy "a better place for private investment."

The analysis also reflects the Marxist tradition's scepticism toward reformism within the labour movement. The trade union leaders are criticised for pleading for a seat at the negotiating table while being ignored by Draghi, and the article anticipates that workers will need to bypass these leaders to fight for their interests. This positions the piece within the revolutionary Marxist tradition that rejects the possibility of a progressive capitalist recovery plan and insists that only working-class mobilisation can extract concessions.

The article does not deploy abstract categories like the tendency of the rate of profit to fall or overaccumulation. Instead, it works at the level of concrete political economy: the scale of the plan relative to the depth of the crisis, the composition of spending, and the class character of the reforms. This is a deliberate analytical choice — the argument is that the crisis is so deep that even the most optimistic government projections show the plan cannot restore pre-pandemic employment levels, let alone address the structural weaknesses exposed by the 2008 crisis.

Conjunctural Relevance

The article was published in May 2021, at a specific conjuncture in the COVID-19 pandemic and its economic aftermath. Italy had been hit particularly hard: 8.9 percent of GDP was wiped off in 2020, and GDP had not even recovered to pre-2008 crisis levels by 2019. The Recovery Plan was Italy's allocation from the EU's €750 billion Next Generation EU fund, with Draghi — former European Central Bank president — brought in as prime minister to lend credibility to the project.

The conjuncture is defined by several specific features:

  • The redundancy ban deadline: The ban on layoffs was set to expire on 30 June 2021, with an estimated 1.5 million jobs at immediate risk. This created a ticking clock for workers that the plan did not address.
  • The eviction freeze and mortgage moratorium: Both were also ending on 30 June, threatening 45 percent of companies — especially small and medium enterprises — with structural risk.
  • The EU's coercive framework: The plan's reforms were tied to a timetable set by the European Commission, with the threat of suspended payments if conditions were not met. This gave the reforms an externally imposed character that Draghi himself reminded parliament of.
  • The comparison with the United States: Biden's $5.9 trillion in spending plans — $18,000 per capita against Italy's $5,000 — highlighted Italy's weak position in world capitalism and the limits of EU-level coordination.
  • The healthcare collapse: Average life expectancy fell by one year and six months in 2020, and non-COVID care faced severe delays, yet health received the least funding in the plan.

The article also situates the plan within the longer trajectory of Italian capitalism: the failure to recover from 2008, the weakness of Italian firms on international markets, and the chronic underinvestment in infrastructure and public services that the private sector had not addressed.

Where the Argument Continues

The article leaves several threads open that are developed elsewhere in the In Defence of Marxism corpus and broader Marxist analysis:

  • The class struggle response: The article predicts that workers will demand their share once the plan's limitations become clear, but it does not analyse the actual strike wave or social movements that followed. Later IDOM articles on Italy — covering the port workers' struggles, the general strikes, and the growth of rank-and-file organisation — pick up this thread.
  • The fate of the trade union bureaucracy: The article criticises union leaders for passivity but does not develop a detailed analysis of the Italian union confederations' strategy. Subsequent IDOM pieces examine the CGIL's role in containing struggles and the emergence of rank-and-file committees.
  • The EU's fiscal framework: The article notes the EU's coercive role but does not explore the broader contradictions of the Next Generation EU fund — its reliance on EU borrowing, the conditionality attached to disbursements, and the limits of EU-level Keynesianism. These are developed in IDOM articles on the EU's recovery fund and the political economy of the eurozone.
  • The ecological critique: The article exposes the "green revolution" as a cover for business-as-usual but does not develop a Marxist analysis of the energy transition or the contradictions of green capitalism. This connects to broader IDOM work on climate and capitalism.
  • The international dimension: The comparison with the US is noted but not developed. IDOM articles on Biden's spending plans and the global conjuncture provide the wider context.

Connections

This article should be read alongside:

  • Other IDOM articles on Italy: Particularly those covering the Draghi government's labour market reforms, the port workers' struggles, and the growth of the far right as a response to the crisis of Italian capitalism.
  • IDOM articles on the EU's Next Generation EU fund: These analyse the political economy of EU-level borrowing, the conditionality regime, and the limits of EU Keynesianism.
  • Marxist analyses of the state and crisis: The article's implicit theory of the state connects to Lenin's State and Revolution and more recent Marxist work on the capitalist state's role in managing crises.
  • Analyses of Italian capitalism's structural crisis: The article assumes familiarity with Italy's long decline since the 1990s — the stagnation of productivity, the weakness of the export sector, the fragmentation of the bourgeoisie, and the chronic public debt. Readers should consult IDOM's historical analyses of Italian political economy.
  • Against the Stream episodes: The podcast has covered the Italian conjuncture, the Draghi government, and the class struggle response. These episodes develop the analysis of trade union strategy and rank-and-file organisation that the article opens up.

Key Quotes

  1. "The Italian plan reflects Italy's weak position in world capitalism, and it won't serve to change anything of significance. Italy saw 8.9 percent wiped off its GDP in 2020. According to IMF estimates, at the end of 2022, it will still not have recovered this loss. And GDP in 2019 had not even recovered to pre-2008 crisis levels."

  2. "The plan aims to create the conditions for private companies to take the lead in the long-term growth process [...] so that Italy becomes a better place for private investment." — Cottarelli, former spending review commissioner, quoted approvingly.

  3. "The workers are noteworthy by their absence from this plan. They are dependent variables, to be shaped according to the demands of the bosses, made to go wherever they are needed for as long as they are needed."

  4. "For the Recovery Plan formula, all these reforms are indispensable, because if they are not applied according to the illustrated timetable, the EU could suspend payments, a fact that Draghi reminded us of in parliament. In other words, workers and students are being made to foot the bill."

  5. "With a €248 billion plan behind it, the government won't be able to say that the money isn't there. Nor will the bosses be able to do so in the sectors that are making profits. Conditions will therefore improve for trade union struggle."

  6. "In short, 'Super Mario' does not have a plan to save Italian capitalism. His 'plan' amounts, in manifold ways, to bringing in the state to help out the parasitic bosses whilst the workers are left out in the cold."