At the end of the ten days that shook the Bel Paese, Italy finally has an excellent premier and an excellent government. From Italy's Black Wednesday alarm from the Stock Exchange and the BTPs on November 9 to the birth of the Monti government, everything happened, but it cannot be said that it went badly. On the contrary. Once it was the star that protected us, now we owe a monument to San Giorgio Napolitano. It is true that the Government is expected to be tested by facts, but the intentions and the people are the best that could be found.
Were it not for the risks to our jobs, our salaries, our pensions, our savings, our companies and – why not say so? – our own democracy, this would be a legendary time. For eighty years we have not seen a crisis so intense and dramatic but also so sudden and unpredictable. Getting bored is hard. Economists have studied the 29 crisis for a lifetime and made fun of the tragic mistakes of the time, but now that they are experiencing the crisis live, they look with dismay at the pressing succession of events and cannot predict how long the crisis will really last: seven years or so. seventy? In the meantime they will have to rewrite the manuals and explain if and how it is possible to combine debt and growth. With the lead of the public debt in the wings it is difficult for an economy to grow, but reducing the debt without growing is a bet bordering on the impossible. The idea that it will be necessary to resign oneself to reopening the inflation tap a little risks becoming unavoidable, but it is a double-edged sword that must be handled judiciously. With much judgment.
To return to us, the change of scenery we have experienced in the last ten days and the importance of the miracle that has matured on the Colle is shocking. We were the bottom of the class with crumbling credibility and it only took a few moves and a few hours to turn the situation around. If politics won't play jokes and will understand the importance of taking a step back by letting the technicians take the chestnuts out of the fire, it is not presumptuous to say that today Italy can field the best team in Europe. Who has an esteemed premier like Monti, who has a head of state of Napolitano's prestige and who has given the ECB a president of Draghi's worth? Three people that the whole world envies us and who polish our image by covering up our weaknesses. Let's say that today we finally have the ammunition to fight, with some hope of success, the most dramatic challenge of our era on the most advanced frontier of the battle to save the euro and Europe.
The whole world is watching us and we'll give it our all, but it's a bit like aiming for the Scudetto by starting the championship with a penalty of at least 10 points: fielding the best team in Europe is not enough. We have the third largest debt in the world and we come from fifteen years of stagnation and reduction in per capita income: will we be able to recover and regain the confidence of the markets? Now we have international credibility, but facts are needed, both at home and away. If what matters is to convince investors from all over the world who hold almost half of our public debt that Italy will make it, the fundamentals count for little. We must be able to reduce debt by stimulating growth and we must do it now. To succeed would be a miracle and fortunately sometimes miracles happen, but the tragedy is that two miracles are needed. Putting your own house in order is important, but then the monster of sovereign risk remains to be tamed.
Thank goodness SuperMario we have two: Monti and Draghi. The turbulence of the stock exchanges and of the euro, of government bonds and their spreads will end when the markets are convinced that the debt of all the countries of Euroland is safe, but the battle against sovereign risk cannot be won in just one country . More Europe is needed and above all the metamorphosis of the ECB into the Fed and the guarantee of our central bank on the sovereign debts of all member countries with unlimited means, procured by printing money, if necessary. Monti says that “We are Europe”. He's right, but who convinces the Germans? He's already at work and his meeting next Thursday at the Elysée with Sarkozy and Merkel is a good omen, but the other SuperMario must also score: in Frankfurt.
