Italy’s South Tyrol: Paradise Lost ???

25 October 2010.

South Tyrol, a German- and Italian-speaking region of mountains and valleys,

rivals Italy’s most productive regions, highly industrialized Lombardy, and the Valle d’Aosta,

in GDP per capita.

It is so prosperous that it can pay its governor a better salary than that earned by US President Barack Obama.

The so-called “South Tyrol Package,” signed in 1972,

25 October 2010.

South Tyrol, a German- and Italian-speaking region of mountains and valleys,

rivals Italy’s most productive regions, highly industrialized Lombardy, and the Valle d’Aosta,

in GDP per capita.

It is so prosperous that it can pay its governor a better salary than that earned by US President Barack Obama.

The so-called “South Tyrol Package,” signed in 1972,

guarantees extensive autonomy from Rome

to the two northern provinces of South Tyrol and Trentino,

which together make up the autonomous region of Trentino/South Tyrol.

Despite the economic crisis,

there is almost no unemployment in the area around the capital Bolzano, known in German as Bozen,

and the province is debt-free.

By comparison, Italy as a whole has the highest government debt,

as a percentage of GDP, in the entire euro zone.

Part of its success has been its political stability.

Within the last half-century, 19 prime ministers have been sworn in in Rome.

In South Tyrol, on the other hand, there has been only one change in the province’s top job during the same period –

from its “über-father” Silvius Magnago to current head Luis Durnwalder,

who has ruled the province practically as his personal fiefdom since 1989.

For the last 21 years, Durnwalder has made sure that his realm,

a place where both lemon trees and edelweiss bloom, takes full advantage of its strengths.

Investors exploit the bilingualism of many South Tyrolese to capture southern markets.

Vacationers flock to the region, not only to tour the Dolomites and visit “Törggelen” festivals,

which showcase local food and wine in the autumn,

but also because of its new boutique hotels and museums.

In 2009, South Tyrol registered 28 million overnight stays in its hotels and guesthouses.

As a result, many residents of the province, including both German- and Italian-speaking South Tyroleans,

practically worship Durnwalder for his shrewdness and down-to-earth personality.

No provincial governor in Italy has been in office longer — or has been as successful.

Durnwalder’s party, the South Tyrolean People’s Party (SVP),

has ruled the province with an absolute or relative majority since 1948.

For many, Durnwalder IS the SVP,  

as can be seen from the petitioners who show up in front of the government headquarters building in Bolzano as early as 4 a.m.

to be the first in line when Durnwalder starts his daily office hours for citizens at 6 a.m. –

an opportunity for ordinary people to tell him about their biggest problems.

At the same time, there is undoubtedly something of the stubborn old farmer in Durnwalder,

who is finding it difficult to relinquish power.

Although he announced that he would retire in 2013, after almost a quarter century in power,

it is no longer clear whether he truly intends to do so.

According to Durnwalder, polls show that more than two-thirds of citizens in the province have no idea who could replace him –

a conclusion that seems to surprise no one less than Durnwalder himself.

He rattles off the names of Italian prime ministers, including Giulio Andreotti, Romano Prodi and current Prime Minister Silvio Berlusconi,

and points out that he has always gotten along with whoever was in power in Rome.

“Basically, the people down there are proud of us.”

Although the numbers have been rising recently,

an unemployment rate of 2.9 percent in 2009, at the height of the economic crisis,

meant full employment in South Tyrol.

The GDP per capita is 30 percent higher than the national average, and twice as high as in Sicily.

Meanwhile Rome, as required by the Italian constitution, “only” returns 90 percent of collected taxes to Bolzano,

compared to the 100 percent that goes to the Sicilian capital Palermo.

South Tyrol, says Durnwalder, is unwilling to help pay for the good life for residents of southern Italy.

“Even down there they also have the option of working,” he points out.

But Rome has recently upped the pressure,

so resentment is growing in the region, which once belonged to Austria.

This year, Durnwalder is expected to contribute €500 million ($630 million),

or 10 percent of the province’s budget,

to the financially strapped central government.

Rome still owes its northernmost province €3 billion, which it is effectively paying in kind.

The control of some 21 money-losing train stations, military barracks, post offices and almost all national roads

on South Tyrol territory has already been transferred to the Durnwalder administration.

Durnwalder says he has always managed to work out solutions with Italian Prime Minister Silvio Berlusconi,

“as long as Biancofiore isn’t running around down there

and telling everybody that her fellow South Tyroleans are being mistreated by the barbarians.”

He is referring to Michaela Biancofiore, a long-legged, blonde native of Bolzano with Italian roots,

who is a member of the parliament in Rome for Silvio Berlusconi’s People of Freedom party.

And she replies vehemently, speaking in Italian:

“South Tyrol is a piece of land that could have been painted by God.

But without South Tyrol, Italy would have many fewer problems.

I like Durnwalder.

But it would be nice if he would only spend the money that’s earned in his province,

instead of constantly collecting government money.”

If Rome, in response to the economic crisis, transfers even more responsibilities to Bolzano,

South Tyrol could turn into a “state within a state,”  says Biancofiore,

who is notorious among Rome’s German-speaking subjects for her slogan,

“a tricolore in front of every farm,” referring to the Italian flag.

According to her, “Italian federalism is under threat.”

Although the days when Tyrolean separatists in Italy would blow up utility poles are long past,

men like Thomas Widmann, the provincial transportation minister,

who is seen as a possible successor to Durnwalder,

have now institutionalized the quest for independence.

In areas like the judiciary, Italy is “closer to a Third World country than Europe,” Widmann says.

Citing Rome’s empty coffers, he says that

South Tyrol ought to “do everything possible to separate itself from this country –

preferably through complete financial autonomy.”

However, even in South Tyrol, this attitude is increasingly out of place.

Recent studies show that the province is starting to lose its competitive edge

and is suffering from a lack of new academic talent,

and that its future prospects are not good.

Durnwalder’s realm is lacking the basic conditions for success in the globalized economic world.

The number of bilingual young people is declining and

commercial property prices are virtually unaffordable.

A hectare (2.2 acres) of land in the Bolzano area now goes for about €1 million.

“Nowhere is there as much economic freedom as there is in our province — for our people, of course,”

Durnwalder slyly points, when the conversation turns to obstacles to outside investment.

Despite these efforts, the changes in the bastion of South Tyrol can no longer be overlooked.

The minute the governor leaves his office he sees groups of Moroccans and Pakistanis gathered in the parks near the bus terminal.

Romanians, Poles and Slovaks work long hours in the region’s apple orchards, which are protected by anti-hail netting.

In the village of Margreid, Alois Lageder says that

his business depends on seasonal workers from Eastern Europe.

Producing an average of 1.5 million bottles of wine a year,

he is South Tyrol’s biggest private vintner — and its most unconventional.

When he launched the business, his goal was to develop “a strong brand that is independent of South Tyrol.”

Today he exports his wine to places as far away as Russia and China.

In this sense, Lageder represents an alternative to the tradition represented by Durnwalder.

The governor, contradictions and all, is an embodiment of modern-day South Tyrol,

an old farming region at a crossroads between isolation and globalization,

deeply rooted folk beliefs and secularism,

If Durnwalder quits politics, the conflicts will become even more visible.

His party now has only a very thin majority in the provincial parliament.

Parties from the nationalist German-speaking and right-wing Italian camps

threaten to shake the tectonics of the political landscape in South Tyrol.

“We here in South Tyrol have reached the limits of growth,”

says even Durnwalder’s avowed supporters, like businessman Michael Seeber.

“It’s time we finally opened the doors and acknowledged that we are part of a united Europe.

And that the decisions are now being made in Brussels,

where they won’t be paying as much attention to our small population of 500,000 people,

as they do in Rome,” according to this article in Spiegel Online.

David Caploe PhD
Editor-in-Chief
EconomyWatch.com
President / acalaha.com