M like Manovra, the mystery of Italian economic policy is called that. Indeed, to be precise, Corrective Maneuver. Everyone does it, mind you, in the sense that once a year all governments adjust the ratio between government revenue and expenditure, trying to bring the deficit back into balance. Few have succeeded, but no country can boast, so to speak, the incredible Italian record. Since 1963 when the first serious crisis in the balance of payments occurs, corrected by the Carli-Colombo duo (Guido Carli at the Bank of Italy to pull the brakes on the currency and Emilio Colombo at the Treasury to tighten the screws of the public budget) every year maneuvers are announced followed mostly by corrections and every year tax revenues grow, while the expenditures of central and peripheral administration run even faster. A spiral that has led the public debt to double from 60 to 120 per cent of the gross product (with an interval between 1994 and 2001, too short and not sufficient). The two peaks, for the quantity initially involved, are those of the Amato government in September 1992 and the Berlusconi-Monti governments in 2011. In between, there are withdrawals which together exceeded 25 percent of the gross product. Yet, austerity after austerity, the state accounts have worsened until they became unsustainable.
Thus, the corrective maneuver has become "the mother of all political exorcisms". He writes it Paolo Savona in his latest book (Heresies, exorcisms and right choices to get out of the crisis, Rubbettino, 2012, pagg. 102, 12 euros). Citing the assessments of the International Monetary Fund on the maneuvers carried out from 1991 to 2007, on the eve of the great crisis, he ranks 13. "In this period, tax revenues have gone from 30 to 43% of GDP and expenditure they always recorded a few more points. We have been promised a balanced budget for 2013. We will have the opportunity to verify whether it is a serious promise or the usual exorcism". Even if we want to be confident in the competence of government technicians, experience does not help. “Maneuver after maneuver – writes Savona – the promise is always that public spending will be cut ... eventually though, in the different versions of the proposal and from the one that comes out of Parliament, the tax increase is spot, the cut in expenses deferred and gradually scaled back, if not completely forgotten“. How come?
To understand this, we need to review the "heresies" that Savona mercilessly puts together, one after the other. With a journey back in time that dates back to the nationalization of electricity in 1962, passes through the Workers' Statute, the health and pension reforms, the loss of big industry, the refusal to consider the public debt a deferred tax, up to the research of the external constraint that would get us out of our troubles with the Maastricht Treaty and "precipitous entry into the euro". An economist alongside Carli in the Bank of Italy and then in Confindustria as general manager, minister in the brief Ciampi government, university professor, Savona saw the illusions of an Italy unravel in front of him one after the other, which today is struggling to maintain its share in world trade, it loses product and, above all, per capita income. Although a rich country remains, the hay placed on farmsteads begins to decrease, the savings rate decreases, investments fall, wages stagnate. Far from maneuvering, to get back on track, corrections of a structural nature are needed, which attack the junctures of the real economy.
The biggest disappointment is the euro: as built and run, it hasn't helped us. Or rather, it was an important stimulus factor in the years of its construction, from 1998 to 2000. It produced difficult, even painful adjustments in the first three years of its existence, but since 2008, with the great financial crisis, it has manifested its contradictions. One above all: it is a currency without a sovereign, monetary union has not been followed by a union in fiscal policies, much less a political union. The fiscal compact, as conceived, does not fill the gap, but adds heresy to heresy. “I don't know if the Italians and their managers are aware of it – writes Savona. of the cul de sac they slipped into by denominating their public debt in a currency they do not create", exchanging "the calming effect of the euro on public debt rates and the expansion of the area for placement of issues as a reflection of an Italy without state finance problems”.
Therefore, it is not Europe that can pull us out of the abyss, we must count on our own strength. “The alternatives for us to get out of the grip of public debt are (a) of sell public assets to extinguish at least part of the existing debt or forms with similar effects (b) of obtain the reform of the ECB statute regarding interventions on sovereign debts in the event of speculative attacks, placing Italy's immense wealth as collateral (c) of default or offer to repay it in our new money at the originally declared parity (1936,27 lire per euro)".
Savona is asking for a "plan B" which also includes the possibility of leaving the euro, discounting a period of real upheaval, partially balanced by a recovery of competitiveness of our exports. It is actually a sort of last resort proposal, to increase bargaining power on the European stage. “The ECB must have the possibility of using the three channels of monetary base creation (foreign, treasury and banks) under the constraint of non-inflationary monetary creation”. Because in reality for us the euro is now like the beloved for Ovid who wrote: "I can't live with you, but neither can I live without you". Monti, once you've done your homework, you also have to do those away from home. There are some positive signs. One of the most important is his trip to the United States. Because among the heresies pilloried by Savona there is an equally dangerous one: to think that Europe can go it alone without the USA and that the euro can prosper without (or even against) the dollar. Let's leave certain late-Gaullist raptures to Sarkozy, the EU and the US are saved together.
