The last analysis of Congiuntura ref. is clear and explicit: to avoid a worsening of the economic situation, Italy must be ready to face a period of recession with the promise of development in the future. The famous phrase of the American economist JM Keynes, "in the long run we will all be dead", can no longer be taken as a reference, quite the contrary. To avoid falling into a negative recessionary spiral, we need to think about large development projects, which will require great sacrifices today, but which will give our economy new life tomorrow.
Even if the reforms carried out by the Monti government in recent months do not lead to the goal of balancing the budget, they will certainly help reduce the damage. But there is a uncertainty limit on the success of these measures mainly due to two factors: the severity of the 2012-2013 recession, which could alter the Government's forecasts, e the time during which interest rates on Italian debt will remain high.
Both of these variables, growth and interest rates, influence each other and can lead to a positive or negative spiral fueled by most of the expectations that the markets will have towards our country. And according to Congiuntura ref. there are two elements that could lead to a “definitive breakthrough in expectations“: a rethink by German Chancellor Angela Merkel on the more active role of the ECB, on a plan to issue Eurobonds or on strengthening the bailout fund; or a increased expectations on the potential growth of the Italian economy.
Contrary to what it may seem on the surface, whether or not the markets will regain confidence in our country will not depend solely on the reforms launched by the Monti executive. In 2012, announcements on future policies will be more important than those implemented by the government in office. “The Government's action up to now has necessarily focused on the issue of liberalizations that can be achieved quickly“, whose opening to the market can be achieved with a simple government act (taxi, petrol stations, pharmacies and professional associations). But"the size of these sectors is limited, and obviously the macro-level effects that can arise on the economy are small".
Le proposals therefore there are two that emerge from the study.
- Involve wider sectors in the liberalization process: network services (energy, gas, telecommunications, rail transport, highways) e oligopolistic sectors such as banking, insurance and commerce.
- Propose long-term development measures: raising the education levels of the working-age population, improving the country's infrastructural endowment, raising the efficiency of the Public Administration, speeding up the times of civil justice, defining an industrial policy that supports the processes of internationalization of companies, l research and development activities in the most advanced sectors.
All topped off with a change in the tax system capable of radically reducing the levels of tax evasion.
These are all reforms that require great efforts in the short term and pay off only in the long run. This is the great challenge for the parties that will be candidates in the next elections. There will be a great temptation to give in to "the illusion that there is a shortcut" to immediately generate growth, which would hardly be sustainable but would guarantee immediate votes. It is therefore up to honest politics to demonstrate that it is determined and to continue the path only partially traced by the Monti government.
Download here the Congiuntura report ref.
