Why austerity? An analysis of the coalition of Italian parties and social partners that supported the establishment of the Monti cabinet

Abstract: The international financial crisis has hit southern European countries remarkably hard. As a consequence, governments have introduced economic austerity in order to cope with such a difficult situation. Perhaps most important, left-wing and right-wing parties have contributed to the implementation of these economic policies. Given this unexpected consensus, this thesis examines the Italian case study. In particular, it aims to understand why Italy’s most important conservative party, progressive party, trade unions, and trade association all supported the establishment of the Monti cabinet, a technocratic government whose objective was to put into effect economic austerity. In accordance with power resources theory and the insiders-outsiders model, this research argues that the determinant of their conduct is the interests defended by each of the five organizations. Then, employing a text analysis inspired by Fairclough’s critical discourse analysis, it researches the official discourses given by the leaders of the five organizations. The results show that the conservative party and the trade association aimed to protect the interests of employers whereas the progressive party, and trade unions intended to defend the interests of workers that are not affected by unemployment or by the lack of employment protection. That being so, the five organizations all supported the institution of the Monti cabinet because its program included measures that would have favored these two groups. In essence, the central argument is that in the aftermath of the international financial crisis economic austerity was introduced in Italy because it would have served the interests of employers and protected workers.