Austerity is the theme of the spring edition of The European House Ambrosetti in Cernobbio, which brings together the great figures of the Italian and world economy twice a year in the setting of Villa d'Este. Bankers, teachers, politicians, entrepreneurs, journalists, all ask themselves the same question to which, as often happens, there is no answer: is austerity still sustainable? And when will it be possible, as necessary, to reverse the trend and implement development policies?
A dilemma rather than a question. And in any case to refer only to the Eurozone, increasingly suffering and with a very tight growth outlook for 2013 as well. Slightly higher than that of the United States, around 2%, which however, as Nouriel Roubini points out, risk losing as much as 1 point due to fiscal policy. On the other hand, and as always they are the ones driving the planetary balance so much as to make it more than positive as a whole, the emerging countries are flying: South America and Asia in primis, with China which despite everything also in 2012 confirmed a growth between 7 and 8% and with the new name identified during the usual panel on emerging markets in South Korea.
The old continent, on the other hand, is still in the grip of austerity which has recently been energetically balanced by the choices of the ECB. But how much longer will it last? The system is on its last legs, it is whispered in the corridors of the Renaissance residence on the shores of Lake Como, because the liquidity guaranteed by Frankfurt to the banking system is no longer credit but suffering. The production system does not work and is therefore unable to repay the credit to the banking system. A dog chasing its tail, as is well known, and in Cernobbio economists once again take note of it.
Solutions, however, few. But there are some keys to interpretation, such as the one suggested by Francesco Confuorti, President of Advantage Financial, an independent financial company that operates between Milan, Luxembourg and New York in the advisory, investment banking and asset management sectors: “The electoral situation has not in fact changed the sentiment of American investors towards Italy, which has always had a relative weight in the US and international portfolio. Suffice it to say that the weight of Borsa Italiana's capitalization in the world financial panorama is only 1,5%, even lower in proportion than that of Portugal”.
Why? “Because banks and insurance companies – explains the Italian manager -, which make up 50% of the main stock market index, have always been considered too tied to the country's politics and therefore to an old and outdated way of approaching the markets. On the other hand, the sentiment of foreign investors is different towards other, more modern and creative sectors, such as those of fashion and luxury, which in recent weeks are reaching all-time highs: just look at the performance of the various Ferragamos, Cucinellis, Tod's and Luxottica".
So you don't invest in banks and insurance companies because they are the emanation of politics, never as in this moment synonymous with uncertainty and generally considered the symbol of a country that needs new ideas and new energies. “Classical finance – insists Confuorti – is still built in the image and likeness of politics: consider, for example, the mechanisms of the Foundations. And therefore there is no reason to increase investments in Italy, just as there weren't even before since nothing has changed”.
Absolutely nothing, given that right here in Cernobbio there is a lot of talk about the bogeyman Grillo. "In reality - concludes Confuorti - the vote for the 5 Star Movement can also be seen positively, as a stimulus to the current political system to make the reforms that the country needs, to attract investments from abroad and beyond".
How to do? With the reforms, made by new people who give the signal that a generational change is underway here too. How long will that take? At least 2-3 years. See you at the next Cernobbio.
