They comfort the latest data on GDP growth, partly unexpected and partly the result of the long wave of orders and orders signed at the end of 2021. Unfortunately, autumn is destined to reduce the optimistic scenarios with an almost certain slowdown in the American and European economies. The classic "star" who oversees the fate of our country will be needed to navigate between inflation, energy costs and rising interest rates. The head of industrialists of Federmeccanica, the Vicenza area Federico Visentin, still displaced by the seaside political crisis that ousted Mario Draghi from Palazzo Chigi, reviews the priorities of the Italian manufacturing industry after the political elections.
President Visentin, despite an excellent second quarter for the Italian economy, perhaps the most complicated autumn in recent years is approaching.
“We have been worried for some time. We have to deal with the increase in the cost of energy and raw materials, while inflationary pressures continue to erode corporate profits and the purchasing power of workers. Despite the plan presented by Minister Cingolani, the great unknown factor of gas supply remains on the table. The data on GDP, on the other hand, are undoubtedly comforting: Italian companies have been able to react in recent months".
The country will in fact block the electoral campaign for two months. What worries you the most?
«The government crisis has really displaced us. Every fall of the executive generates instability which, in this specific case, increases an already widespread uncertainty in the short and medium term. It is difficult to understand the political reasons behind government crises like this. Now current affairs will have to be combined with the implementation of the Pnrr, then immediately after the elections the new government will be called upon to manage the complex transition phase we are experiencing. We can't always rely on chance or good luck.'
In 2021 Italy was the most lively economy in Europe: the latest data still show largely positive quarterly results. The first point of the next government's industrial agenda?
«There are many open points to be closed and one of the most important is certainly the structural reform of the tax wedge. We've been talking about it for a long time and something was moving. Federmeccanica supports it in every location: substantial interventions are needed to support the purchasing power of workers and to promote the competitiveness of companies. A downward reform that brings in 200-300 euros a year when fully operational would be little more than a bonus. The goal is to align ourselves with the European average and for this we need a much more substantial reform. The second point is just as vital for our economy."
What?
«The new government will not have to waste even a minute and continue with structural interventions to diversify the sources of energy supply, towards greater autonomy, investing in strategic infrastructures. Then there is a technological and ecological transition that we cannot afford to undergo, but which we must lead».
Are the risks of resorting to extreme measures such as lockdowns for the most energy-intensive companies averted?
«Europe has actually already proposed a series of measures to ration energy consumption. Draghi and Cingolani were carrying out an energy plan to make us autonomous in a reasonable time. The next government will have to pursue this kind of strategy. It will take political cohesion, skills and vision. There are big issues ahead of us that must be understood and managed with professionalism and decision».
In view of continued sanctions on Russia, where in our national energy policy can we absolutely not slow down, regardless of political issues?
“This terrible story from a humanitarian point of view has exposed some of the limitations of our past energy policies. We hope that the sanctions will produce the desired effect and that the war will end as soon as possible. However, it will be necessary to carry out large-scale actions to diversify supply sources, without excluding any type of energy, always bearing in mind the very important objectives of ecological transition".
In September, the ECB could decide on a further tightening of monetary policy. Is this a scenario already taken for granted by companies?
«Not everyone is yet aware of what this paradigm shift entails. We come from a period of grace, between low rates, in some cases close to zero, loans with public guarantees and extensions of deadlines. But be careful: Europe will have to be very clever in finding the right balance to curb inflation. The real risk, in trying to limit the increase in prices, is that of depressing growth too much. Also because European inflation, unlike American inflation, is driven by energy. For this reason it is essential to normalize the courses of energy costs».
How far from reality is a scenario of political instability in Italy such as to question the tranches of liquidity linked to the Pnrr?
«The Pnrr is a plan that serves to support structural reforms. Investments capable of giving an economic return to the country in the coming years must be financed. Reforms are necessary not only to obtain the resources of the Pnrr, but also to be a more competitive and modern country. Recourse to non-productive debt should be absolutely avoided in a context of rising interest rates, in a perspective in which the markets could put our public finances in their sights again».
Inflation could remain persistent for a long time. In addition to the debate on the tax wedge, how long will it be possible not to raise wages and salaries?
«In many contracts there are solid protection mechanisms. Ours contains a safeguard clause which provides for the final adjustment of the HICP each year net of imported energy. They are important guarantee instruments that take into account the contingent situation. However, the issue of wages is doubly linked to that of company profits. We have been saying for some time that the growth in size of companies must be supported, so that we can acquire greater independence in the value chains and not be, as often happens, contractors for large companies in other countries. This would also allow for greater margins which would bring more opportunities to grow wages».
Should imported inflation, caused by soaring energy costs, also be managed with measures that are not only of a monetary nature?
«To protect the weakest groups, rules must be established to counter speculation linked to the energy sector. It should also be noted that the cost of energy is significantly eroding business margins. In our recent survey, more than 60% of the metalworking companies we interviewed said they had suffered a reduction in profits due to the increase in energy costs. This is why we must continue without delay with the line of progressive separation from energy dependence on a single country".
