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Breakingviews - Italy's north teaches Catalonia a self-rule lesson
October 23, 2017 / 12:16 PM / a month ago

Breakingviews - Italy's north teaches Catalonia a self-rule lesson

MILAN (Reuters Breakingviews) - Italy’s wealthy north can teach Catalonia a lesson in demanding self-rule. Voters in Lombardy and Veneto, which together make up around 30 percent of Italian gross domestic product, asked for more autonomy in referendums at the weekend. Like Catalonia, these territories want to keep more tax revenue. But unlike the fractious Spanish region, they stopped short of demanding independence. Such gentle pressure may yield better results.

President of Veneto region Luca Zaia speaks with journalists as he waits the results of Veneto's autonomy referendum in Venice, Italy, October 22, 2017. REUTERS/Manuel Silvestri - RC1439D13140

Around five million people cast their ballots in northern Italy, home to the once openly separatist Northern League party. More than 95 percent voted to give regional leaders a mandate to keep more money at home when dealing with matters ranging from justice to infrastructure or education. In Veneto 57 percent of voters turned up, while in Lombardy, home to the Milan financial hub, the turnout was below 40 percent.

Like Catalonia, the two Italian regions are major economic engines. They too complain that the money they pay to the central government in tax is out of proportion with what they get back in services. Lombardy’s local government says the gap amounts to 54 billion euros a year. For Veneto the difference is 15.4 billion euros. Meanwhile, the southern region of Sicily gets 10.6 billion euros more than it paid in, Lombardy says.

Since the referendums were legal but non-binding, the Italian government has no formal obligation to make concessions. And money does not flow in just one direction: the state recently paid 5 billion euros to prop up two failed Veneto-based lenders. But allowing export-driven regions that face global competition to keep a greater share of the resources they bring in should not be a taboo subject.

Italy’s central government will find it difficult to push back. Dismissing the wishes of 10 percent of those eligible to vote in general elections next spring would risk damaging the country’s ruling parties. Contrast that with Catalonia, where demands for independence led to a heavy-handed response from the central government, the dismissal of the region’s leadership, and prompted banks and other companies to shift their headquarters. The Spanish region may yet end up negotiating more autonomy. Italy’s regions will hope to achieve similar results with less damage.

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