'We're not Catalonia': Italy's separatists tread softly toward autonomy

By Mark Bendeich and Sara Rossi
President of Lombardy Roberto Maroni poses in his office in Milan, Italy, October 12, 2017. Picture taken October 12, 2017. REUTERS/Alessandro Garofalo

By Mark Bendeich and Sara Rossi

MILAN, Italy (Reuters) - As nervous investors retreat from Catalonia, afraid the wealthy region may secede from Spain, another European region whose politicians once campaigned for independence is looking to attract some of them -- by talking of autonomy, not secession.

The Italian region of Lombardy, the country's industrial engine and home to its financial capital Milan, is holding a referendum on Sunday for more autonomy, an outcome its once-proudly secessionist leader hopes will lure more investment.

That could come at the expense of Catalonia, which is a rival to Lombardy in the race to attract employers fleeing another painful European divorce, Brexit. The two regions are competing to host Europe's drugs regulator which must leave the UK and find a new home inside the European Union.

"We are not Catalonia," said Lombardy President Roberto Maroni, overlooking Milan from his glass-walled office on the 36th floor of the region's recently built headquarters.

"We remain inside the Italian nation with more autonomy while Catalonia wants to become the 29th state of the European Union. We, no. Not for now."

He speaks of Catalonia as a competitor in some respects but says he is not deliberately courting its firms. "We are not cheering because firms are fleeing Catalonia. We will see what happens but I haven't had any requests yet from Catalan firms."

Maroni is a leading member of Lega Nord, which began in the 1990s to campaign for an independent state of Padania, stretching across Italy's north, roughly following the Po river from around Lombardy in the west to Venice in the east.

Lega Nord no longer actively campaigns for secession but as the ruling party in Lombardy and in the Veneto region around Venice, it is holding referendums in both for greater autonomy, including a better financial deal from the central government.

MONEY MATTERS

A 'yes' vote would not be binding on Rome, but Maroni said it would give him a strong mandate to negotiate a better deal.

"It's obvious that the more negotiating power I have, the more money I can manage to bring home," he said.

Rome says the referendum is unnecessary, though permitted under Italy's constitution, which allows regions to open talks for more autonomy. Italy's ruling Democratic Party is also neutral on the issue, though at least one of the party's mayors in Lombardy is calling for a "yes" vote.

Like Catalonia, Lombardy makes up a fifth of the national economy and complains that the center is draining its finances.

But unlike Catalonia, where hundreds of firms have shifted headquarters to other regions of Spain since an Oct. 1 independence referendum there, Lombardy's boss is taking a softer line and using his autonomy push as an investment pitch.

Maroni says Lombardy pays 54 billion euros ($64 billion) more in taxes to Rome each year than it receives from the center. He wants to reduce that difference by half.

Maroni says he would spend some of that money on research and development, nurturing family-owned businesses and start-ups -- and tax holidays to attract big international firms.

For example, he said, he could tell big multinationals looking to invest in Europe: "You know that if you come to Milan, for two or three years I won't make you pay taxes."

Rome, though, is in no position to allow its most economically powerful region such a windfall without risking economic collapse in the already-poor south, experts say.

"It's a zero-sum game," said Professor Luca Ricolfi, an expert on federalism at the University of Turin.

"ITALY COULD NOT SURVIVE"

Gian Claudio Bressa, junior minister for regional affairs in Rome, said it was not a matter of just handing back money.

Regions must show they can take over public services from the national government and do a better job at providing them. Only then are more funds allocated to a newly autonomous region, to help it fund those additional services.

"Italy is a unitary state based on mutual fiscal solidarity among regions," Bressa said.

"In order to get more money from the central state, Lombardy should demonstrate that the services offered are better if compared to those provided by the state itself. If 27 billion euros were to be used to fund something different from services, Italy could not survive of course."

Even if there is a large "yes" vote in Sunday's referendums, experts do not expect quick or dramatic change.

Lombardy would consider it a victory if it managed to pick up a few more responsibilities and around 1-2 billion euros in additional funds, said the University of Turin's Ricolfi.

Politically, though, it could inflame tensions between the rich north and poor south, and weaken the seams of a nation that was a collection of small regional states, speaking a variety of dialects, until unification in the 19th century.

"Once you open up the issue of what the northern regions pay, then I expect a backlash in southern Italy," said Giovanni Orsina, history professor at Rome's Luiss-Guido Carli University.

($1 = 0.8504 euros)

(Additional reporting by Giselda Vagnoni in Rome; Editing by Gareth Jones)