Italy's rich city prays for fall of nation state

BUILDING EUROPE

Michael Portillo would not go down very well in Bologna. For a start, nobody has heard of the SAS around here, much less learned to fear it. As for his stiff-necked line in Euro-scepticism, that would meet only stares of incomprehension.

It is hard to imagine a country more pro-European than Italy, and it is hard to imagine an Italian city more pro-European than Bologna. Here, they cheer for Maastricht, the IGC, the single currency and all the rest with a fervour that seems almost suspicious until one looks more closely.

Bologna is a flourishing, rich and happy city, with the wild Appenines on one side and the lush Po valley plain on the other. Historically, it has had strong links with Europe through the famous university. It is well-run under a left-wing municipal administration that has been in power since the war. The regional economy is booming, thanks in part to a healthy export trade in prestigious local products, such as Parmesan cheese and Ferrari sports cars.

The royal pain in the lives of most Bolognese is the Italian government, which taxes them too much and squanders the proceeds through incompetence and corruption. Europe, in contrast, promises fewer obstacles to economic prosperity and greater efficiency. It is simple: more government from Europe means less of the disastrous home-grown variety.

"If we are more enthusiastic about the European Union than the British, it's because we need it more. If forming closer ties with Europe means being governed better, then it can only do us a favour," explained Tania Giacobini, a manager with a ceramics business from Sassuolo, just north of Bologna.

Search for a hint of Euro-scepticism beneath the surface and you search in vain. After all, what is there to lose? National sovereignty? That's a good joke, with clowns running the show in Rome. A strong sense of national identity? Not in Italy, which has only been a nation for 130 years and has never entirely got used to the idea, associating strong nationhood with the Fascist period. The lira? Get serious. The Italian currency is so unstable it is outclassed by the Albanian lek.

"Our problems are national problems, not European ones," said Leo Bertozzi, the export manager for the Parmesan makers' consortium, based up the road in Reggio Emilia. "There's no point us worrying about the consequences of a single currency when we don't even have a reliable postal system."

Parmesan makers have done well out of Europe, not only because the single market has made foreign sales easier (Spain, for example, imposed tariff barriers on cheese imports until 1989) but also because the Commission has protected Parmesan and other specialised products from cheap imitations.

Already, several British supermarkets have removed "grated Parmesan" labels and renamed their low-price plastic tubs "grated Italian cheese". Soon, the consortium hopes, it will be illegal in the EU to describe cheese as Parmesan if it is not made according to the traditional recipe in the Emilia Romagna region.

Parma ham enjoys a similar privileged status throughout the European market. Thanks to Brussels, producers no longer have to seek health certificates to ship their hams across European borders. Their only complaint is that they have no price protection, especially in the French market, where a few big players control supermarket distribution, pushing prices to rock-bottom rates. "But to solve this problem, of course, we will turn to Europe, not the Italian government," said the Parma ham consortium's export manager, Massimo Montuschi.

Not all Italian food producers have the wealth and lobbying power of the Bologna region. Elsewhere, one hears bleats about European agricultural policy, especially in the deep south, which lives off less privileged olives and citrus fruit. Some businesses acknowledge their export performance has been enhanced by a weak lira, an advantage that they will lose if a single European currency comes into being.

Italy faces other potential problems with Europe - the danger that it will fail to qualify for the single currency, and the likelihood that the sacrifices necessary to catch up will increase unemployment, raise taxes and damage already desperate public services.

But these issues are rarely aired in public debate. "Italy's enthusiasm for Europe is as unreal, in its way, as Britain's scepticism," said Patrick McCarthy, an Italian specialist at the Bologna branch of the Johns Hopkins School of International Studies. "Italian political elites think they can integrate into Europe while continuing to act as they like at home," he added."They have largely had a free ride up to now, but that could all change."

Letters, page 18

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