“The austerity policy has not weighed so much for the constraints that individual states were required to respect, constraints necessary to ensure the overall sustainability of the EU area, as for having prevented an expansive tone of European economic policy as a whole. There would rather be a need for a more active role of the Community budget, and even more of the Eurozone capable of supporting the very accommodating monetary policy of the ECB”. Claudio De Vincenti, exponent of the PD, he was in the Governments chaired by Letta, Renzi, and Gentiloni with various positions from undersecretary to the MISE, and to the Presidency of the Council to minister of the South and of territorial cohesion. He was therefore the protagonist of the choices that those governments made in an attempt to get Italy out of the double recession of 2008-2009 and 2011-2013 which had caused the loss of almost 10 points of GDP and an increase in unemployment of almost one million units”.
Today a part of public opinion and many political parties are trying to blame Europe for our economic crisis and for the difficulties we have had in overcoming it. The recipe, according to them, would be to regain monetary sovereignty by leaving the euro, and limiting the powers of the European Commission itself in order to give individual countries ample freedom in industrial policy choices and in the field of international trade.
“It is a superficial analysis that leads to very harmful choices for all citizens. The experience of our governments shows that the budgetary flexibility we have obtained from Brussels has allowed us to focus on supporting industry by facilitating investment and hiring in various ways, and to refinance investments in public works, which, moreover, have been hampered by other factors, and not by lack of resources. In Europe we have had a very accommodating monetary policy which has made it possible to keep interest rates low both for public securities and for private investments, but the fiscal policy has been too modest, i.e. there has been a lack of tools to support the policy monetary policy, an expansive European budgetary policy to supplement what individual states could do, many of which, like Italy, were grappling with high public debt and with policies aimed at reducing its weight. The Juncker plan was certainly a positive sign in the right direction, but the amount was not enough. Moreover, Italy was one of the countries that made the best use of these funds both for infrastructural works and for financing investments in businesses”.
So we need more Europe and not less Europe as the sovereignists say. Macron has been supporting it for some time, but the steps forward seem rather timid for the moment.
"Certainly. And here we come to Italy's role. With the recovery of control over public finances and growth policies, we managed to get out of the abyss of recession and in 2017 we achieved appreciable economic and employment recovery results. We had regained credibility in Europe and made our voice heard as a great founding country that participates in strategic decisions on the future structures of the European Union. The current government, on the other hand, has squandered the laborious work of rebuilding our credibility, isolating us from our traditional partners. The result is that we weren't in Aachen last January, as would have been natural, with France and Germany. An abysmal difference from the trio of 2016 in Ventotene. After all, it is clear that today more Europe is needed precisely to be able to implement those expansionary policies that individual governments cannot afford. The entire union has a strong trade balance and this means that we grow less than we could and we do not contribute to driving the growth of the rest of the world. It is a situation that only the strongest European authorities can rebalance both in the economic interest of European citizens and in order to have weight on the world stage”.
Some exponents of the current government majority, such as the Hon. Borghi continue to maintain that it would be more convenient for Italy to leave the euro so as to be able to print our currency at will and implement an accommodating exchange rate policy, ie being able to devalue in order to regain competitiveness.
“The Honorable Borghi forgets how it was when there was a lira. Devaluation certainly makes it possible to recover the competitiveness of our goods, but it also causes inflation which eats away at the competitiveness thus regained. In recent years the cycle has become shorter and shorter, i.e. the benefits last less and less, not to mention the other problems that devaluation causes for fixed income workers and investments. The truth is that by joining the euro, our interest rates have dropped a lot, freeing up space in the state budget for investments and for supporting business innovation. Unfortunately, Italy took little advantage of this opportunity. And it should be remembered that in those years the government was center-right with the League in an important position. When we were able to use those spaces with the centre-left governments, the Italian economy got back on track. Even the current government repeats that mistake. In fact, Prime Minister Conte had said in September that the markets would calm down when they knew the real contents of the budget maneuver. And just when those contents were disclosed, the spread rose again to then stabilize between 250 and 300 points, over 200 points above France and 150 points above Spain. And this is because skepticism concerns not only the balances (the deficit at 2,04% is in any case hardly credible), but also the contents which, as the latest Brussels report has pointed out, do not give any support to growth and aggravate debt ”.
We come then to the Government's budgetary policy. How to evaluate the basic income?
“In the meantime, as all estimates indicate, the RdC will not give a significant boost to consumption and therefore to growth. then what, in my opinion, is more serious is that in this way the functioning of the labor market is distorted given that part-time or low-paid work would be discouraged, while undeclared work would be favored to the detriment of regular. And this will have serious effects on the functioning of the economy, hampering its growth. The REI, introduced by our governments, was based on a fundamental principle: first the social services together with the beneficiary elaborate and sign a reintegration protocol and then the subsidy is paid. In this case, on the other hand, the subsidy is in any case disbursed before the definition of the protocol, and then, when possible, the latter will eventually be elaborated Change everything! In short, on the one hand the State gets into debt only to make current spending on subsidies and on the other it makes companies lose competitiveness due to a serious distortion of the labor market. So it's no coincidence that growth quickly stopped!"
Now our government claims that construction sites will soon be reopened and public works will be relaunched, a relaunch that your governments have also had difficulty implementing. Just as we hope for a recovery in private investment.
"I observe that the budget law has weakened the resources for businesses, eliminated the concessions for capital increases, reduced the tax credit for investments in the South, cut the cohesion funds by as much as 1650 million for this year, and the resources allocated to ANAS and the railways. As far as public investments are concerned, there are many political-bureaucratic obstacles and I doubt that a control room at Palazzo Chigi is enough to overcome them. We only risk creating new bureaucratic structures that increase obstacles. To list just a few, which were well described in a study by Assonime, presented a few days ago, I would say that the first place is to clarify the attribution of responsibilities between the State, Regions and local bodies. But now, after the rejection of the constitutional referendum, we are moving in the opposite direction. Then there are the baroque rules, for example in environmental matters. And yet the service conferences, despite the simplification introduced three years ago, are still extremely cumbersome. Then there is the quality of the projects that the PA is no longer able to do. Furthermore, there is talk of remaking the Procurement Code which actually increased the transparency of the tenders but created a series of adaptation problems in the administration, which are now being overcome. It would be good not to aim to redo everything from scratch, but to aim only to correct some unclear or too complicated rules. Finally, I mention the problem of litigation where the so-called reckless disputes are not adequately discouraged, and above all the insufficient certainty of the law which drives managers to protect themselves in advance by asking for opinions from the ANAC, the lawyers, etc. before signing off to work. The Conte government does not seem able to intervene on all these matters".
You were minister for the South. Her post had been hailed by many observers as a renewed government interest in the South. Several things have been done, yet in the last elections, Southerners voted en masse for the 5 Stars. Did they not understand you, or were the things done considered not very effective?
“First of all, we fully recovered the European funds that had to be spent by 2015, then we set the new plan for 2020, respecting the milestones set by the European Commission itself. For example, contrary to what was stated in some press articles, thanks to the work set by the Gentiloni government, the milestone that envisaged spending 8 billion by 2018 has been fully respected. Then we promoted agreements with the Regions which are essential for monitoring the status of projects and avoiding delays. We have also launched the tax credit for investments which, last September, had activated initiatives for 6 billion. Finally, we launched the "Resto al Sud" initiative to finance young startups which has so far collected 13 applications that could create around 40 jobs, and special economic zones which are a way of equipping the South to fit into major international trade routes from China and, hopefully soon, from North Africa. From what I see, the implementation of these measures is stagnating: the special economic zones are stuck in Campania and Calabria, which we have already established. There has not been a public account of the pacts for the South after ours in January 2018. It is a pity because the result of our policies was a higher growth in the South in 2015-2017 than that of the other Italian regions. Certainly a three-year recovery period is not enough to heal the wounds inflicted by the crisis on the living body of Italian society, especially in the South and among young people. And we underestimated this."
But this was somewhat the main mistake of centre-left governments. And it applies to all fields.
“In fact, our governments have focused on getting Italy back on track by enhancing its skills and competencies. But we have not correctly assessed the depth of the crisis caused by the two recessions suffered by Italy. The trauma has affected not only those who have found themselves out of work, but also the employed who have lost all certainty both on the possible wage growth and on the stability of their job. The loss of sure points of reference has provoked anger and resentment. Which unfortunately we have not been able to fully grasp. Unfortunately the current government proposes only illusory shortcuts and the knots are already coming home to roost”.
