Italy's cuts may threaten Venice

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Media captionWill reforms keep Venice afloat?

In a small room in an old Venetian Palace on the banks of the Grand Canal, a workman is holding back the tide.

The sound of piano practice echoes through the walls. The palace is home now to this city's foremost college of music: the conservatorio.

Repairs are taking place to keep the water out. It's a constant battle.

"We will have some difficult years in the restoration of our buildings," says Antonio Foscari, an architectural historian and the patriarch of a famous Venetian family, as he watches the repairs proceed.

"But with 24 million tourists, the economy of the town is sure enough, I think. We have to put that revenue to good use."

Now though, there is a new challenge.

Big cuts in spending on local government and culture are part of the radical programme of economic reform being pushed through by Mario Monti's technocratic government.

And for all the attention focused on the crisis in Greece recently, the success or failure of Mr Monti's reforms in Italy may have a larger role in deciding the fate of the eurozone.

And that means long-established practices are going to have to change.

"With less money coming in, the Venetians must learn to do some things alone, without the help of the government," Professor Foscari says.

"But the greatest problem here is for the young people, not for the old buildings."


Just along the canal at city hall, the mayor of Venice has to worry about both.

Across Italy, Giorgio Orsoni says, cities are the motor of the economy, but their budgets are being cut.

"I can understand why there are cuts," he says, "but the central government is putting itself first."

"It is asking for more sacrifices from us, and that means we have less to spend on everything - on buildings, on employment, on everything."

Image caption Work to protect Venice's palaces may be threatened by cuts

A short boat ride across the water, there is one big project which isn't being cut.

A huge scheme to build multiple barriers controlling the sea level in the Venetian lagoon, to protect the city from flooding, is entering its final phase.

"There will be no more flooding," says Maria Teresa Brotto, the head of design for the Mose project. "We will solve the problem once and for all."

And in this time of austerity, the government has just released another 600m euros ($789m; £500m) for the flood barriers. It is part of a multi-billion-euro investment in national strategic infrastructure - one way, Mr Monti hopes, to promote economic growth.

But will it work?

"The short-term effect in terms of additional expenditure is not going to be there," says Professor Carlo Carraro, Rector of Ca'Foscari University. "We will see the effect in maybe 10 years, not right now."

But, Professor Carraro adds, that doesn't mean a place like Venice can't survive the current cuts.

"It is taking a big hit, but some of the institutions that are being cut were really not that efficient," he argues, "and the quality of initiatives in Venice is going to increase".

In the meantime, other economic skirmishes are just beginning.

In a chemist shop on a cobbled Venetian backstreet, Luca Casarotto tells me why most pharmacists are up in arms about liberalisation. They are a closed profession, rejecting the bitter medicine of competition.

"It's really a revolution," Mr Casarotto says. "They will lose business with this change. They will lose money, they will lose business, and they aren't happy."

Do or die

On the canals, a few hardy souls have ventured out on gondolas in wintry weather.

The gondoliers don't seem to mind the cold, but in a city where tradition is so important, making big changes to deeply entrenched employment practices will be a huge challenge.

Image caption The government has just released extra funding for barriers to control water levels in Venice

"Maybe we need some change," Mr Casarotto says. "The trouble is no-one wants to go first."

The response from the government is simple. On the front line of the eurozone crisis, it's do or die.

In other words you cut inefficiency, and promoting more competition means creating more opportunity.

But that's a tough argument to make to a group of protesters standing around a makeshift tent outside Venice station. They've been laid off by the state train company as part of the drive to cut costs.

"Of course Mario Monti has to play his part," Salvatore says. "This is a real emergency for Italy. But we just want our jobs back."

'Privileges attacked'

In a backstreet boatyard, they're repairing old gondolas, getting ready for the summer season. It's painstaking work.

But how do you fix what's broken in an entire economy, without destroying what you already have?

So far - says Fabricio Barca, one of Mr Monti's technocrat ministers - most people are prepared to give the government the benefit of the doubt.

"It has been clear to the people that privileges have been attacked," he argues.

"Even with the reform of the pension system, which has lengthened working life by about five years, everybody knows that everyone else is being treated in the same way."

"The prime minister has made it clear that we are causing trouble for all," he says.

But as Venice and its long history can testify, change often comes slowly, and this government of technocrats probably won't be office all that long.

Fractious party politicians are still waiting in the wings.

Mr Casarotto the pharmacist may be right. Mr Monti is trying to usher in a revolution, and he could yet succeed. But he has barely begun, and Italy's problems will take years to resolve.

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