FOOTBALL IN ITALY
Passion for football in Italy cuts across economic,
social and geographical differences. By far the most
popular spectator sport it is also widely practised
since childhood by virtually any healthy boy in the
land (girls are catching up albeit slowly). It is deemed
imperative for any self respecting father to insure that
as soon as his (male) toddler is able to stand (however
precariously) he is also able to kick the ball (however
skilfully).
The popularity of football and the emotion that it stirs
are also reflected in the endless discussions that
follow the Sunday’s games of Serie A (the top
championship) and the star status conferred not only
on players but also on coaches, top club managers and
sports journalists. For prominent business figures,
ownership of a major club represents the ultimate
symbol of success. Prime Minister and media
magnate Silvio Berlusconi, for example, is the proud
owner of AC Milan, while the family of the
charismatic President of FIAT, Gianni Agnelli, is the
largest shareholder of Juventus. Indifference to
football is considered an extravagance and not
rooting for a team a despicable snobbery. Football
widows (spouses deprived of quality time at week
ends by football fanatic husbands) constitute an
endemic social problem, which was greatly
exacerbated after the decision to broadcast live the
Serie Amatches on satellite pay-TV.
The public is extremely demanding. The ultras, the
local version of hooligans, do not tolerate bad
performances, so the draconian job protection
enshrined in Italian labour laws, does not apply to
coaches and players. Bright careers are abruptly put
to an end often at the intimation of angry mobs.
However harsh, this selection ensures that Serie A is
year after year one of the most competitive national
championships in the world, attracting a host of top
international players: Maradona,Van Basten, Platini,
Ronaldo, Bierhoff, Gullit, Falcao and Batistuta, are
just a few names that come readily to mind.
The Italian clubs are increasingly turning to financial
markets to attract capital and a few of the top teams
are listed on the Stock Exchange - Lazio, Juventus
and Roma. However the financial burden to maintain
a competitive team has substantially increased in the
past few years, so despite higher revenues from TV
rights many clubs have piled up large debts, which in
many cases have become unsustainable, usually as a
result of a bad season. The outlook appears
increasingly uncertain. Italian PayTVchannels, as in
many other European countries, have not recouped
the money unwisely spent on football broadcasting
rights, because the public is not willing to pay much
to watch the games (especially when a florid black
market insures an infinite supply of counterfeited
smart cards to de-cript any satellite channel).
Nevertheless a dream job for any Italian males (at
least those not talented enough to aspire to a place in
the national team, the Azzurri),would be a position as
The World Cup and Economics 24 World Cup 2002
THE 2002 WORLD CUP
Italy won theWorld Cup in 1934, 1938 and 1982,
but in more recent years victory has been elusive.
Since 1970 Italy has failed only three times to be
among the top four, while in the last three world
cups, has lost only one game in regular time and
otherwisewas defeated in a penalty shoot out after
extratime. During the 1990s Italian clubs
dominated the European tournaments, but this
predominance has faded recently: in 2002 no
Italian team reached any of the semifinals, an event
which was acrimoniously deplored by the press
and the public. Nevertheless the mood of tifosi is
upbeat as they feel that the time has come to reach
the top spot, 20 years after the magic night in
Madrid. Indeed the recent victory against England
has confirmed that the team is strong and
competitive. The “Azzurri” rely on star strikers
such as Inter’s Vieri and Rome’s Montella (a
player often compared to Paolo Rossi, the hero of
Spain 82) and on the best defence in the world led
by Lazio’s Nesta and Parma’s Cannavaro. The
midfield, traditionally the weakest spot, has found
in Rome’s Totti an assertive, skilful and elegant
leader. Giovanni Trapattoni, one of the most
successful managers in Europe, has taken the
responsibility to coach the team: he is at the peak of
a remarkable international career during which he
has won most major club tournaments in the
continent and is among the most popular
individuals in the peninsula. The dream of most
Italians is a victory over Brazil, against which Italy
lost two finals, the last one in 1994 in a penalty
shoot out.
football club equity analyst. Although it would
involve week-end and late evening work, it would
provide a solid justification vis a vis wife, girlfriend,
or paramour to watch the games in peace.
THE STATE OF THE ECONOMY
After a bleak 2001 the country is gradually coming out
of the mild recession that has affected most of the G7.
As the global economy rebounds Italy, which is one of
the most open developed economies, should benefit
greatly. Indeed the strength of the economy hinges on
an extremely dynamic and flexible export sector
whose backbone is constituted by the medium and
small size enterprises concentrated in the North of the
country. On the contrary large industrial enterprises
especially in traditional manufacturing have entered a
long-term phase of decline. Participation in EMU has
forced the economy into an adjustment process that is
purging the system from its most pernicious
drawbacks: reliance on government subsidies,
periodic devaluations to maintain competitiveness,
lifelines thrown to inefficient public enterprises. The
process of fiscal consolidation imposed by the
Maastricht Treaty and the Stability and Growth Pact
has been impressive and despite the pause in 2001 the
long march towards a balanced budget should resume
in 2002 and be completed by 2004. Participation in
EMU has ensured, for the last several years, that
inflation and interest rates were close to historical lows
and are expected to remain there for the foreseeable
future. The newly established stability has not yet
fostered higher potential growth due to the parlous
state of public services, excessive red tape, labour
market rigidity, crumbling infrastructures and
bureaucratic inefficiency. However some progress in
this area has been achieved by the new government,
which has liberalised fixed term labour contracts,
streamlinedsomebureaucratic procedures, eliminated
estateanddonation taxesanddevolvedsomepowers to
the regions in the area of health and education. Much
remains to be done but the government appears
determined to tackle at least some of the most pressing
problems at least in the labour market. The Southern
regions, which lag behind the North in virtually all
economic and social indicators, are slowly picking up
after more than a decade of stagnation, but closing the
gap will require, in the most optimistic circumstances,
the effort of at least another generation.
THE STATE OF THE NATION
The victory of the House of Freedom, the coalition
led by media magnate Berlusconi, in the election last
year has profoundly changed the political landscape.
For the first time in almost half a century a
government enjoys a solid majority in both Houses of
Parliament and has a reasonable chance of lasting for
the entire 5-year term. The ruling coalition swept the
elections on a platform of deregulation, tax cuts and
deep reforms in all key areas such as taxation,
education, civil and penal codes and new
infrastructures. So far the implementation of the plan
has been sluggish and further progress is likely to be
gradual. For example taxes cannot be cut at once
without breaching the Stability and Growth Pact.
Deregulation of labour market and the reform of the
unviable public pay-as-you-go pension system will
not be achieved without a harsh fight with the trade
unions and other interest groups such as civil
servants, school teachers and pensioners who are
benefiting from the status quo. All in all we can say
that the nation can be compared to a football team
with good midfielders, a weak defence and strikers
with much touted skills, but who still have to prove
they are able to score the winning goal.
Previous Appearances: 14
1934, 1938, 1950, 1954, 1962, 1966, 1970, 1974,
1978, 1982, 1986, 1990, 1994, 1998
Honours
Winners: 1934, 1938, 1982
Runners-Up: 1970, 1994
Semifinalists: 1978 (4th), 1990 (3rd)
Hosts: 1934, 1990
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