Meet the Israeli Economics Expert Who Could Become Italy’s Stanley Fischer

As a rising political star prepares to take the reins of government in Rome, his Israeli-born economics adviser tells Haaretz about his plan to save Italy from ruin.

Ariel David
Ariel David
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Ariel David
Ariel David

He’s Israeli, he’s an economics expert, and he may well be on his way to a top government post abroad. And no, we are not talking about Stanley Fischer.

Meet Yoram Gutgeld, born and raised in Tel Aviv, who arrived in Italy for a summer job three decades ago and never left. Today he is a member of parliament for the center-left Democratic Party and the top economic adviser of Italy’s premier-in-waiting, with a shot at receiving a key economic post in the next government.

Gutgeld’s fortunes are linked to those of his boss, Matteo Renzi, the boyish and ambitious Democratic Party chief who last week ousted the 10-month-old coalition government of Enrico Letta in a bid to lead a new administration himself.

Renzi is popular among Italians for his administrative skills as mayor of Florence and for being a young newcomer to a national political scene viewed as stodgy and corrupt. He is widely expected to be tapped by Italy’s president to put together the country’s fourth government in four years, and at 39 he would be the country’s youngest prime minister ever.

His adviser is less known to the general public, but Gutgeld was one of the main voices behind Renzi’s economic plan to revitalize Italy, which helped the mayor win the Democratic primaries in December and placed him in control of the strongest party in parliament.

Gutgeld says he would “love to be involved in government activity,” but was cautious about his prospects of joining Renzi’s cabinet, warning that “these things are decided at the last minute, based on many considerations.”

Gutgeld was born in 1959 into a Polish family that had fled to Palestine on the eve of World War II. After his service in the Israel Defense Forces he studied mathematics and philosophy at the Hebrew University of Jerusalem and at the University of California in Los Angeles.

He came to Italy in 1989 to intern at the local offices of the consulting firm McKinsey and, although he didn’t speak the language and had no connection to the country, chose to stay after meeting his future wife. He became an Italian citizen and worked his way up the corporate ladder, becoming a senior partner and director at McKinsey Italy.

Gutgeld met Renzi two years ago through a friend and was impressed by the Tuscan mayor’s leadership qualities. He decided to join his team and try to bring the lessons of good management and efficiency he had learned as a consultant to the chaotic world of Italian politics.

“I made a bet Renzi is going to change Italy,” he told Haaretz during an interview last week. “I knew I would never get a second chance and I wanted to be a part of it.”

The baby-faced Renzi and the professorial, bespectacled Gutgeld make an odd couple. Renzi is a media-savvy hashtag master who regularly communicates through Twitter and Facebook, while Gutgeld still uses a basic dumbphone. The putative premier, with his boisterous Tuscan accent, is charismatic and outspoken, so much that he is known as “il rottamatore” − the scrapper − because he once said the entire leadership of his party should be taken to the scrap yard. On the other hand, his advisor, who lives in Milan with his wife and two children, has picked up the sharp inflection of the northern city’s inhabitants and speaks in measured and carefully-chosen sentences.

Still, the two have worked well together to deliver a program of urgently-needed reforms that promises to revive economic growth and create jobs.

Renzi and his future government will have to deliver quickly on that promise. Italy’s economy hardly showed any growth even before the global financial crisis, and last year GDP shrank by 1.9 percent. The country’s public debt has soared to 133 percent of GDP, second only in the EU to Greece’s, and youth unemployment is around 40 percent.

“The country has been mismanaged and has let various interest groups take care of their own wellbeing instead of looking out for the collective good,” Gutgeld told Haaretz.

Nicknamed “Renzi’s guru” by the Italian press, the former consultant wants to cut taxes on wages, which are among the highest in Europe, to put more money in workers’ pockets and increase internal demand. He would also push to privatize state companies, reform the costly and inefficient pension system and the inflexible labor market, in which laws and union power make it almost impossible to fire employees. By encouraging companies to hire, he hopes to create new jobs and increase labor participation, which is low particularly among women and in the underdeveloped south.

A poll last month showed 54 percent of Italians approved of Renzi’s proposed policies, though it remains to be seen how the public will react to his attempt at taking the premiership without seeking new elections. Despite his popularity, Renzi is likely to face strong opposition to his reforms from powerful lobbies and within his own party, which traces its roots to Italy’s Communist Party and may balk at some of his more liberal ideas.

“There is a sense of ‘now or never,’ an understanding that we need real change,” Gutgeld. “But there will be resistance, it’s inevitable.”

He is also aware that his Israeli and Jewish roots would make him an easy target for personal attacks should he become more visible. “So far I haven’t encountered much, but I take it for granted that there will also be anti-Semitism,” he says.

Gutgeld is very close to his relatives in Israel and is familiar with Israel’s political and economic dynamics. While at McKinsey, he opened the firm’s Tel Aviv office and from 2009 led a program to help streamline the IDF and cut its costs by billions of shekels.

“There are many similarities between Italy and Israel: There’s a lot of creativity and entrepreneurship, and a little bit of disorganization,” he says. “The difference is that in Israel there is a collective sense of ‘we can do the impossible,’ so it’s a country that thrives on challenges, while in Italy there is a sense of giving up because it’s too hard to make a change.”

Asked about Israel’s own social and economic problems, Gutgeld says that the country’s development over the last decade has been “phenomenal” and that while “Israelis tend to complain, if you look at other countries I think Israel can be proud of what is has achieved.”

The main challenge for Israel today is enlarging the workforce by encouraging more members of the Arab and the ultra-Orthodox sectors to enter the labor market, he says.

These are difficult, long-term cultural changes, he added, but recent efforts to eliminate the exemption from military service for Haredim are a step in the right direction.

But would he ever consider a political career in Israel?

“Besides the fact that I live here, I think it’s more challenging to try to affect change in Italy,” he says. “But, never say never.”

Born and raised in Tel Aviv, Yoram Gutgeld is now the top economic advisor of Italy’s premier-in-waiting.Credit: Ariel David

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