How the Mafia profits from the Covid-19 pandemic in Italy

Charlotte Tosti writes a fascinating article on the how the Mafia is exploiting the financial hardships created by the Covid-19 crisis in Italy. 

In January, the Sacra Corona Unita clan attempted to bomb a trial witness in the southern Italian city of Foggia. This was the second of two violent attacks by the group that winter. The Italian Prime Minister, Giuseppe Conte, appealed to Italians in the southern provinces in a letter to the Corriere Del Mezzogiorno. He urged them unite against the mafia, to “not feel alone- because the state is with you.”. 

Fast-forward to May, and Italy is now one of the worst-affected countries from the Covid-19 pandemic. Already, there are reports from The Guardian that mafiosi are delivering food packages to those who are unable to work . Mafia organisations have once again found an opportunity to infiltrate into the economy.  Conte’s pleas for civilians to reject the mafia are somewhat less convincing, when it is these organisations that could be their only way of putting food on the table.

The composition of the labour market in the South of Italy goes some way in explaining why the mafiosi are able to capitalise on the Covid-19 crisis.  There are some 3 million workers in Italy who work off the books, paid cash-in-hand. Over a million of these workers live in the south. Like other countries in the European Union, Italy announced its own series of economic support packages for individuals and businesses. For these people who work in the shadows, it is much harder to secure support from the government.

An underlying lack of trust in the capacity for the state to ‘efficiently’ spend the taxpayers’ money, fuelled by right-wing populists like Matteo Salvini, has led to a widespread culture of tax evasion. This is often backed up by the notion that the Italian state taxes ‘too highly’- even though the rate of Corporate Income Tax in Italy is actually lower than the rates of France, Germany and Portugal (2019). Receipts are in fact a rarity in the South of Italy. It is not uncommon to visit a bar in an Italian coastal town during the Summer, and be asked if you ‘don’t mind’ if you don’t get a receipt, or fail to be given one at all. You nod, hope they didn’t make you a bitter espresso, and life goes on.

Unlike the more affluent, industrial northern provinces, the South of Italy remains agricultural, and derives much of its income from seasonal tourism. With Covid-19 robbing the South of the usual influx of summer holidaymakers with plenty of cash to throw at hotels, restaurants and local leisure providers, the income of many businesses in the South is set to dry up. Whilst the Northern provinces with higher population densities have had higher numbers of Covid-19 deaths, it is the regions in the South who will face the strongest blow to their income in the long term.

It is precisely this predictable slump in consumption that will draw many businesses towards support from the mafia. The financial hardship faced by Italians in the South is already grave. There are reports of families having to live off their elderly relatives’ pensions. The anti- journalist Roberto Saviano reported that in Naples, it is the clans who are providing ‘welfare’: they deliver families food parcels. Acts of usury are disguised as acts of ‘generosity’: mafiosi are tempting businesses towards them by offering them loans to without the usual high interest rates.  Saviano also anticipates that in the future, companies re-emerging will need injections of capital to help resume their activities. It is not unlikely that many of these will receive tempting offers of cash from the Mafia. However, these acts are merely part of a campaign to beguile businesses towards them, and concede control to the mafia. If businesses accept the help of the mafia, they effectively bring them in as unofficial, but highly dangerous, business partners. These acts of ‘benevolence’ only add to the wider anti-establishment sentiment felt by many in Italy, that draws individuals away from the civil obedience that is desperately required to prevent the spread of  COVID-19.

There is, however, a strong arm of the Judiciary  especially dedicated to ‘anti-mafia’ prosecutions. Yet, lawyers’ efforts can only go so far in restricting the activity of organised crime.  The more individuals continue to use services provided by Mafiosi, the harder it is to encourage people to report them to the police. The cash economy in the South is an additional element of the Mafia's grip on people’s livelihoods: cash exchanges mean much of their business is invisible, making the gathering of evidence difficult indeed. As the anti-mafia journalist Giuseppe Pipitone once explained to me in an interview, “an army of teachers is far more useful than an army of police”, when it comes to repudiating the Mafia.

But it is apathy towards the activities of the mafia, rather than a genuine belief in their benevolence, that sustains their continued existence within the Italian economy. And this is not new: the United Nations Office on Drugs and Crime revealed that the Mafia intervened to save banks running out of liquidity during the 2008 financial crisis. Thus, the mafia, threading itself in and out of the Italian institution, has a constitution of its own, one built upon conventions of apathy and fear. The extent to which it capitalises upon the financial hardship people will face in this crisis, partially depends on the resistance of already vulnerable people.

The Italian crisis serves as a painful reminder to all of us. It shows that tax evasion leaves you in a no-man’s-land, where the help of the state is far away when you most need it. But this still remains an attractive option for many people in the South, where job opportunities are few and far between. The conviction among some EU countries that giving EU ‘Corona bonds’ to Italy is synonymous with dishing cash out to the mafia is mistaken. Whilst Conte should act quickly to prevent predictable Mafia infiltration into business recovery during the crisis, without re-distributing wealth, protecting workers and investing in businesses in Italy’s most deprived provinces, mafiosi will only continue to profiteer from the poverty of others.

The Mafia is like a parasite, thriving on the blood of anti-establishment sentiment. To kill it, Conte must start showing people that the Italian state can really deliver the goods.

Charlotte Tosti is a writer and parliamentary assistant to a Labour MP.

Follow her on Twitter @miss_de_tartine

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