By Alexander Chancellor

Italy’s new Welfare Minister, Elsa Fornero, broke down in tears when announcing a squeeze on state pensions this month, but she was weeping too soon. For while the latest package of austerity measures will undoubtedly hit Italians hard in due course, there is scant sign yet that they are suffering unduly. Foreigners note with surprise how prosperous and well-dressed most Italians still look, and Silvio Berlusconi was not wrong when he pointed out that the restaurants were still full (“Italia in crisi? I ristoranti sono pieni!”). London is full of free-spending Italian tourists. After a decade of recurrent recessions and with the heaviest burden of government debt of any European Union country apart from Greece, how do the Italians manage to appear so unconcerned?

Counterpoints Italian insouciance

Italians, of course, like to present a bella figura to the world, and this may lead them to cover up whatever financial problems they face. But they also enjoy job protection and welfare benefits without equal in Europe, far greater than were ever enjoyed by the citizens of the Soviet Union. Their pensions in the public sector are astonishingly generous. Mario Draghi, now president of the European Central Bank, draws a pension from the Italian Treasury, of which he was director-general for ten years till 2001, of about €15,000 a month (about £155,000 a year) although he was still in his fifties when he retired. This on a smaller scale is the happy situation in which most public sector workers find themselves, often retiring very young and taking up other work in Italy’s vast black economy to supplement their pension income.

In the private sector as well, pensions are good, benefits generous, and it is incredibly difficult to fire anyone. This may help to explain Italy’s dismal rate of growth, but it also means that people with jobs have been able to hang on to them despite the county’s economic problems. Among young Italians, who have yet to start work, there is widespread unemployment, but this is to some extent their fault. Those who have been through higher

Out to dry: Gypsies hang up their washing at Athens’s 2004 Olympic site i a n n a kou r i s

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education refuse to take the kind of blue-collar and service jobs that are available: these are left to be done by Italy’s five million immigrant workers. The middleclass young, meanwhile, prefer to rely on the support of their parents, who are either still in employment or moonlighting and drawing final salary pensions.

The truth is that things are not so different in Italy from in Britain. There is belt-tightening in Italy, too. People buy fewer cars, fewer houses and fewer luxury goods of all kinds. The sales have started in shops before Christmas. The traffic in Rome seems to have eased. But times are not hard enough yet for people to change their way of life, even if they conduct it on a slightly more modest scale. Rome wasn’t built in a day, and nor can the Italian welfare state be dismantled in one.

Gift for Greece

By Christopher fildes

The Greeks know a thing or two about gifts, but they would scarcely resist a generous gesture, offered in their hour of need. It so happens that their difficulty is London’s opportunity. We should send the Olympic Games home.

All the facilities must still be there in Athens, unless some foreign bank has foreclosed on them. They were run up for the Games, which were held there quite recently—eight years ago—and they will only need a lick of paint and a touch of imagination. The hottest ticket of all will be beach volleyball on the Acropolis. That will put the Parthenon in its place.

The Games will be a boost for the country’s stricken economy, or so the Greeks will be told. That was not how the sums worked out last time, though they were too busy fiddling their way into the euro to notice. The backpackers came but the spenders stayed away. This time the winners would be the official freeloaders, with the roads cleared before them and their hosts left to pick up the bills.

Back in London, the economy has by now had almost all the boosts it was likely to get. We were told that everything had to be got ready for the Olympics—the railways, the roads, and of course the pleasure-domes in the Lea Valley. So the investment was made and the infrastructure is there, but the operating costs are still to come, and are already soaring, with security setting the pace. To no one’s surprise, the National Audit Office now warns that a £9 billion budget may be not be sufficient.

Next will come the cost of trying to run London’s normal economy under Olympic conditions, when even getting in to work will be a losing struggle. Some may not try very hard, and others will be told not to bother. Some of London’s familiar businesses may think that the struggle will be too much for their customers. Theatres, it is now reported, are not taking bookings for the two or three weeks when the Games are on. Other losers will follow.

We could lift all this deadweight of cost from our shoulders quite simply, by returning the Games to the Greeks. This might disappoint those Londoners who had planned to let their houses and go off on holiday—perhaps to Athens?—but they would be in a minority, and their sacrifice would be applauded. Another appropriate gesture would be to push the Olympic flame through the gates of Athens in a wooden horse.

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January/February 2012 Tower Bridge (c.1893) and Euston Arch (1948) are two of the photographs published in Philip Davies’s Panoramas of Lost London, which chronicles the changing face of the city from Victorian times to the end of the Second World War. The first shows the construction of the famous landmark; the Euston Arch is now only a memory, but its demolition in 1962 sparked a preservation protest, marking a turning point in the heritage movement.