Justice in Italy: reform attempts and impact on foreign investment

"Justice has collapsed." It 'a sentence now appellant in Italy for many years, from the institutional and political bodies and reported in the newspapers. This fact, absolutely objective, has never forced the parliament to serious reforms that can bring concrete results in the speeding up of civil and criminal proceedings.

Actually the Italian Justice, as many other aspects of the Country, is still under the influence of a political class and leadership tied to old patterns of the past, totally unsuited to the present historical moment-economic development. Vetoes and vetoes against, opposing interests, old logic of corporate power ensure that no reform effort will be able to rise any concrete result.

 Last example is the introduction of so-called "business courts": a mini-reform which almost in nothing addresses the problem of slowness of Civil Justice, especially those aspects that affect businesses. In fact, the law (Article 2 of Legislative Decree 24 January 2012, n. 1) provides for the establishment of specialized sections in the Courts, but provides no procedure accelerated compared with the ordinary one. Furthermore, the subjects to be treated by these sections will be limited to intellectual property law (trademarks, patents, and copyrights), disputes in corporate (eg. Relationships between the members, shareholders' agreements, liability claims against directors) , and those related to public procurement contracts for works, services or supplies of Community relevance.

 Not only that, but access to these sections is reserved to the companies limited by shares or possibly to those private limited companies controlled by them, so no limited liability companies - which in Italy are the majority - unless they are emanations of big corporations. It is estimated that this reform will affect perhaps on the 1% of proceedings, there is no certainty about a better quickness that could be got in these sections, and however the government has provided for an increase of 100% of tax for access to justice (the “unified contribution”) if the jurisdiction is of these sections.

In a recent conference by the Bar of Turin, seven Civil Procedure professors from all over Italy agreed that after 20 years of successive reforms, the civil trial instead speeding up has become increasingly slow. It is estimated that today in Italy 1200 days needed to recover a trade credit, while in France and Germany 300 are enough.

 The number of proceedings to be dispose is about 9 million, whose 5.5 in the civil order; arriving at a final judgment of bankruptcy may take up to 9 years. All this, of course, keeps away foreign investors who could take any trade or business in Italy, and one wonders if this situation will never end. The answer is certainly not, at least as long as it remains the current ruling class, whose average age is 65 years and, especially, is often in politics from more than half his life. So nobody is expecting any real changing, just until the elections of 2013, when it is estimated that at least 85% of politicians now in Parliament will not be reelected.

 The first signs of this change have occurred with the collapse of the traditional parties in local elections and, together with a large continuously abstaining, the success of the "Five Stars Movement", a movement composed of citizens generally unrelated to politics and inspired by the comedian Beppe Grillo . This formation, given to 26% today, has achieved his first emblematic result in seeing its own elected mayor of Parma, a small and rich town literally robbed from traditional politics. Of course we must see what this new ruling class will do, even tackling many problems created since at least forty years by a corrupted and incapable political class.

Unfortunately, Italy is a country historically young: it is a nation just since 150 years and a democratic republic for less than 60. Italians find it hard to identify with a unitary State; especially in southern regions, they still perceive Government as alien and dominating, as it has been for centuries, represented by foreign powers: Norman, Arabic, French, Spanish. The sense of the State is not as strong as in other European countries, while strong are the forces and trends autonomist and centrifuges. So it is quite difficult at present to predict how the situation may evolve, at least until new legislative elections.

One can wonders if, in the meantime, Italy can still be interesting for those who want to do good business. The answer is certainly positive for equities and real estate. The Italian companies are listed on the Milan Stock Exchange at a value much lower than what is resulting from all the assets that make up them, while property prices are falling rapidly, and it is expecting they still coming down. The Italian Companies are, in large part, technologically advanced; some industries, such as food and fashion are very interesting, while the liquidity crisis, future uncertainties and the need for a generational shift, are persuading many owners that the moment of selling is coming.

 A prime example is the recent acquisition of the big group of Italian shoes Lumberjack by the Turkish producer Ziylan. Recent property taxes enacted by the current government are persuading many owners to get rid of valuable properties that are no longer able to maintain, while some foreign investors are realizing they can make good investments, especially in areas with strong tourist vocation. Italy is still the "Bel Paese", where climate, nature and food are always excellent; Italians may be increasingly difficult to live here, but more and more foreigners want to come here in holiday. In fact, due to the development of emerging countries, the global flow of tourists is constantly increasing, and this will not affect a nation that has 1/3 of the cultural heritage of the planet, how much trouble can continue to combine, in the future, with its economy.