Sicily’s governor Raffaele Lombardo is under investigation for
Mafia ties, which he denies. Mr Monti has demanded that he abide by his
promise to resign before the end of month, a move that will clear the
way for a control team imposed by Rome.
“Sicily is not at risk of default,” said Mr Lombardo,
blaming the crisis on cuts by Rome itself under its EU-imposed austerity
regime. “We face a liquidity crisis linked to the recession in the
rest of the country. It is hard for lots of regions, and not just
“We are victims of disinformation, lie, and falsehoods. What are
we supposed to do? Cut even further? Detonate a social explosion in
Sicily? Turn Sicily into a land of desperation where everything is
destroyed,” he said.
There is a little doubt that Mr Lombardo’s headquarters in
Palermo’s Palazzo dei Normanni is grossly overmanned, with a
bigger staff than Downing Street. The EU has suspended €600m of
project aid over alleged misuse of funds, a move widely seen as a
pressure tactic to force him from office.
Yet Mr Lombardo’s emotional outburst is a reminder that
Italy’s drastic austerity measures — net tightening of 3.2pc
of GDP this year — is bleeding the regions and causing most
hardship in areas heavily reliant on the state. Sicily has developed a
small technology belt in computers and cell phones in the Etna Valley
but depends on public sector jobs and subsidies from North Italy.
The Bank of Italy expects the Italian economy to contract by 2pc this
year as cuts start to bite, while the Confindustria industry lobby fears
it will be 2.4pc or worse — pushing the country deeper into
Critics say the austerity measures have gone too far. The primary
budget surplus will be 4.9pc of GDP by next year, the best in the G7
bloc. This may prove a Pyrrhic victory if it causes public debt to shoot
up to 126pc of GDP this year and erodes political support for the whole
Mr Monti has said his
technocrat government will step down next March. It is
unclear whether the splintered political system can produce a stable
Former premier Silvio Berlusconi is launching a comeback bid with calls
for a withdrawal from the euro unless Germany and the European Central
Bank step in to stabilise Italian bond yields. A study by Bank of
America found that Italy might benefit from breaking free of EMU and
restoring competitiveness with a weaker currency.
Sicily is a microcosm of the same misaligned North-South relationship
within Italy. Like the rest of the Mezzogiorno — or South —
it is caught in a welfare trap, held back by a currency union with a
stronger industrial economy in the north.
This is made worse by national level pay deals that do not reflect
productivity levels on the island. Sicily’s workforce has been priced
out of global markets for decades.
Sicilian patriots say the island was a flourishing hub of commerce
under the Normans in the High Middle Ages. It could be so again with
full control over its own destiny.