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Campania: Bold vision for future rises from the ashes

December 17, 2009

by Guy Dinmore in Naples

Published: December 17 2009

Once the high-society capital of Europe and its largest city, Naples and the surrounding region of Campania have survived over time the scourges of plague, cholera, earthquakes and the world’s most dangerous volcano.

Now seeking to define its future through the development of centres of high-technology excellence – namely in aerospace and aviation – and as an integrated logistics hub linking ports, trains and highways, this region of intense contrasts has run into the latest twin challenges of global downturn and mafia resurgence.

Never far from the national headlines, the news from Naples has been dominated by a series of high-profile judicial investigations into corruption and political links with the local mob, known collectively as the Camorra. Campania’s image as a must-visit tourist destination, with Italy’s highest number of five-star hotels along a stunning coastline, was already struggling to recover from last year’s mountainous garbage crisis that led Rome to dispatch the army to restore public calm.

Italy campania map thumbnailBut beneath the headlines and literally the streets of Naples – among the most densely populated in Europe – Italy’s biggest public works project is well under way with its extensive development of subways and rail lines attracting world-class artists and architects who are reconfirming the area as a centre of culture.

In surrounding satellite towns, the region has established itself as a leader in aerospace and aeronautics, drawing on graduates from the nearly 800-year-old University of Naples Federico II, and developing space projects from the US, Japan, Europe and China. Boeing and Airbus source key components in Campania.

The renowned skills of its artisans and seamstresses have drawn top fashion companies, but with them the global elite of counterfeiters and forgers, their replicas ranging from handbags to US treasury bills.

Despite the undeniable depth of talent, Campania – in common with the rest of Italy’s relatively undeveloped south – is failing to develop enough economic growth and jobs while running large budget deficits. Funding for infrastructure projects, mostly from the central government and the European Union, is in decline.

Italy’s north-south wealth gap continues to widen. According to Svimez, a state development agency for the south, Campania and its 5.8m people have lagged most of all this decade, barely growing at all.

Campania’s gross domestic product started to plummet early in 2008, hit by the twin blows of reduced funding from cash-strapped Rome and the latest putrid eruption of a mafia-manipulated rubbish crisis that has existed for decades.

GDP fell by 2.8 per cent last year while Italy overall posted a 1.0 per cent drop. Per capita GDP reached €16,864 ($24,498), below average for the south and only just over half the level of the centre-north.

“Naples is an area in great crisis, which is dragging down the entire region,” Svimez commented in a report noting the loss of 108,000 jobs in Campania in the second quarter of this year. The official jobless rate of 12.2 per cent fell only because of growing numbers of people leaving the region or giving up their search for work.

Fiat’s Pomigliano D’Arco plant, the largest industrial employer, is in crisis, affecting smaller makers of components that depend on the automotive giant. Trade unions are mobilising protests.

Naples – Italy’s third-largest city – had its long-term debt rating downgraded by Moody’s from A2 to A3 last February, with its outlook reduced to negative from stable. The rating agency noted the city’s “persistent difficulties in cashflow generation” and its focus on capital projects that had led to municipal debts of €1.5bn by end-2008.

However, Standard & Poor’s has kept its A- rating of Campania’s long-term debt, noting its financial pact with the central government in reducing the health sector deficit.

Campania’s exports collapsed by 20 per cent in the first six months of 2009, while the south overall fell 35 per cent. Some areas of Campania have the lowest average annual income in Italy of €8,600, although the island of Capri, famous as a resort since Roman times, manages more than double that.

Domenico Arcuri, head of the Invitalia national investment agency, says the south in 2008 managed to attract only 5 per cent of the national total of foreign direct investment.

“The reasons are complex and multiple,” he says. The competitive advantage of the south in terms of tax breaks is on a par with other areas of Europe but the main barrier to investment is bureaucracy and the long lead time needed for projects.

Politically, Campania is going through a tense and uncertain period of transition in the run-up to regional elections next March.

Antonio Bassolino, centre-left governor, is the region’s longest-serving leader since the time of the 19th century Bourbon monarchy, a period where Naples achieved industrial and scientific fame, building Italy’s first railway and the world’s most advanced seismological centre on the slopes of still-active Vesuvius.

A two-time mayor of Naples from 1993 and elected twice as governor of Campania since 2000, Mr Bassolino has declared he will not run again. The celebrated “renaissance” of Naples for which he took credit in the mid-90s when playing host to a G7 summit has been overshadowed by the city’s subsequent troubles.

Italy’s ruling centre-right People of Liberty (PDL) party, led by Prime Minister Silvio Berlusconi, is also having problems finding the right candidate.

If he were a normal Italian citizen then Nicola Cosentino, a member of parliament and the PDL’s preferred candidate for governor, would have been arrested, following a court order, on charges of collusion with the mafia. But on December 10 a majority of MPs in Rome voted, as is parliament’s privilege, to deny the court’s request for his arrest.

Although Mr Cosentino, who denies the charges, keeps his position in Rome as a junior finance minister overseeing a key national infrastructure committee, his candidacy for Campania is in serious doubt.

Meanwhile, the Naples city council has been rocked by its own corruption crisis that has weakened the mayor, Rosa Russo Iervolino. Separately more than 60 officials in Campania from various parties have been placed under investigation for suspected corruption and abuse of office.

Campania’s speaker of parliament, Sandra Lonardo of the centre-right Udeur party, has been exiled by the judiciary from the region, an unusual measure and one that carries a certain irony given that Benito Mussolini used to exile opponents of his fascist dictatorship to Campania and other parts of the south in the 1930s.

All this hardly helps Naples shake off its image as the crime city of Italy, a reputation sealed by Roberto Saviano, an author under police protection, in his best-selling book Gomorrah.

Eurispes, a Rome-based research institute, says the latest data for 2006 showed Naples ranking fourth-highest for murders per capita in Italy. Its satellite town of Caserta, a mafia stronghold, came third. Among Italy’s 10 biggest cities it was Naples where people felt the highest sense of insecurity.

Nonetheless police and anti-mafia prosecutors are hitting back hard. The interior ministry says 1,539 suspected Camorra members have been arrested since Mr Berlusconi’s government took office in May last year.

Army patrols in the streets have helped restore public confidence although they do not venture into infamous areas such as Naples’ Spanish Quarter.

“The army is not the solution,” says Luigi Nicolais, a noted Neapolitan professor of science and opposition member of parliament. “The solution against organised crime here is to create jobs.”

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