In Europe we can and must ask for many things, starting with a more robust implementation of the Juncker investment plan and the completion of the Banking Union, including the Deposit Guarantee Fund. But we must be careful not to ask for things we cannot get and which would set us on a collision course with Germany. It makes no sense to expect Germany to take our chestnuts out of the fire by squeezing its competitiveness or increasing its public deficit beyond what is deemed right by that country's electorate.
It is true that Germany has a large external surplus and that a good part of it depends on trade with other Eurozone countries. But the argument that the adjustment should be symmetrical, ie falling equally on the deficit and surplus countries, is completely unacceptable by Germany and is very weak from a theoretical point of view.
The Germans have made considerable sacrifices to put their public finances in order, which have been strained first by unification and then by the financial crisis. They have a public debt that worries them because they fear losing that extraordinary competitive advantage which they have enjoyed up to now, due to their merits, and which consists in being a country that has triple AAA and is considered by international investors as one of the most trusted in the world. It is hard to see why they should give up this strength.
As for competitiveness, if we were to ask the Germans to increase wages, beyond what has already happened in recent years, they would obviously tell us that the question concerns the negotiating autonomy of the social partners in individual sectors and individual companies. And it is not clear why, in their calculations of convenience, German employers and trade unions should take into account the consequences of their choices on other countries. In Italy we have never faced a problem of this kind.
The request for a "symmetrical" adjustment is also weak from a theoretical point of view because it postulates the existence of a sort of "benevolent dictator" (the Commission?) and does not deal with the concrete problem of moral hazard. In fact, it ends up rewarding non-virtuous countries, to the detriment of those that have made all the necessary sacrifices to restore public finances and restore competitiveness to companies.
No one in Italy has ever dreamed of asking the Venetians to become less competitive so as not to displace Apulian or Sicilian products. We have given many incentives to companies in the South, but we have never thought of imposing disincentives on production or on the competitiveness of the rest of the country. If we thought in these terms we would end up in a downward spiral in which the least competitive would eventually be rewarded, or at least saved, which would be a disaster for the system as a whole.
It is fundamentally for this reason that symmetrical adjustment proposals have never gotten very far. At Bretton Woods, Keynes's proposal for symmetrical adjustments referring to balance-of-payments imbalances was dismissed as unrealistic. In the following decades, the repeated requests of the United States, which was by far the hegemonic power, aimed at obtaining expansionary budgetary policies from Germany, never came to nothing.
If the Italian government tried to ask for things of this nature in European fora, it would find itself faced with a wall of disbelief from almost all the other countries, even before the clear opposition from Germany.
