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An Italian family braces for austerity measures

Italian President Giorgio Napolitano speaks to the press after appointing the new Prime Minister on Nov. 13, 2011 at the Quirinale, the presidential palace, in Rome.

Giovanna de Maio, her husband Claudio Becchetti and their children, Francesco and Elena.

Kai Ryssdal: The Italian prime minister designate, Mario Monti, said something promising and possibly troubling this weekend, depending on how you read it.

Monti said he wants to build "a future of dignity and hope" for Italy's children. Which could mean he thinks things are going to get better, or that they're going to get worse first with more spending cuts and deep economic reform to build that future.

Either way, Italian families are starting to feel squeezed. From Rome, Marketplace's Stephen Beard reports.


Stephen Beard: Giovanna de Maio seems to have it all. She's a lawyer, married to an engineer, with two beautiful young children. And she works in the ancient heart of one of the most glorious cities in Europe.

Giovanna de Maio: Now we're in Palazzo Valentini. It's in the center of Rome near the Piazza Venezia.

She works for the government in a Renaissance mansion with a stunning view over the city and its monuments.

de Maio: That one is Collonna Traijana.

From her office window, she can see Trajan's column and many other relics of the Roman Empire. But sitting at her desk, Giovanna is focusing on her own immediate and not-so-glorious future.

de Maio: My first concern is about my job, because in the process of austerity that the Italian government has in mind, they want to cancel my actual work.

The level of government that she works for is likely to be scrapped. At 42, Giovanna is getting a dose of American-style economic uncertainty. And it's painful.

de Maio: In Italy, we are used to have the same job all life long. We know this will change. But it's not easy to change job when you are 40 or something like that. It's not easy to move like it's in America. We're not mentally used to move.

It's 8:15 and lessons are about to begin at the Instituto Massimiliano Massimo, a private school in a Roman suburb. Giovanna and her husband Claudio are here, dropping off their two children: 7-year-old Francesco and 4-year-old Elena. Giovanna and Claudio say they send their children here because of sharply declining standards in the public schools, which they blame on spending cuts. School fees cost the couple around $15,000 a year.

Claudio says they're feeling the pinch. The telecom equipment firm where he works has just had its government subsidy reduced and he's had a 10 percent pay cut.

Claudio Becchetti: If we had not the parents, then we were really in trouble, especially in the long term.

Beard: Your parents have been helping out?

Becchetti: Yes exactly.

He says that as Italy's economic malaise deepened over the past year, many adult Italians did the same and turned to their parents for support. And many more will fall back on the older generation as further austerity measures bite. Claudio says, quite right too.

Becchetti: The older generation, they did the big debt that we now have in Italy. So now they are, somehow...

Beard: Compensating?

Becchetti: Giving back, yes. Giving back this money, let's say this.

Italy's welfare state has been extraordinarily generous. The average retirement age here is still only 58. In some cases, it has been much younger. Giovanna says that some of Claudio's aunts retired in their late 40s after only 19 years of work.

de Maio: We knew that something should have to be done because it was impossible to sustain such a system. Only 19 years of work for about let's say 30 years of pensions was not sustainable. And we knew this.

They both believe that there's a new mood of realism in Italy. And that the new government of Mario Monti will succeed and wean the country away from its over-dependence on the state.

Becchetti: I think that we will work it out.

de Maio: I hope so, I really hope so for my children.

But the fact that a privileged couple -- a lawyer and an engineer -- are so anxious about the future suggests that Italians could be facing a very tough time ahead.

In Rome, I'm Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

Giovanna de Maio, her husband Claudio Becchetti and their children, Francesco and Elena.

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