Part archaeologists and part architects, together. This is how economists and "policy makers" might feel. Aware of past stories, lessons to remember. Capable of building a future that is mindful, but not necessarily a replica.
In the long period of crisis that has troubled the Italian economy, the archaeologist's approach has prevailed over that of the architect. The archeology of crisis has served to measure the lost ground. The car market which for a long time returned to the registrations of the seventies. The purchasing power of Italians that still recedes today to the volumes of fifteen years ago. Productive investments dropped by almost a third. Permanent employment of young people up to 34 years of age reduced by over a third. There are many finds brought to light to decline the deep hiatus that has arisen between the difficulties and hopes of a community put to the test.
The depth and breadth of the crisis have also fueled some idealizations of the past which it is also up to the economist-archaeologist to try to correct. One example among many. How many remember that, on the eve of the decision to converge on the single currency, Italy was paying over 110 billion euros a year in interest on its public debt? The year was 1996. Today, even taking into account that in 1996 there was inflation of four percentage points, the burden of our public debt is much less burdensome. It does not go beyond seventy billion, as indicated by the projection contained in the "Winter forecasts" recently released by the experts of the European Commission.
Europe and the euro have served Italy just as Italy has given so much to Europe. Above all, to that Europe of stability which in recent years has somehow seemed to prevail over the Europe of growth. In the long years of the crisis, Italy is the country that more than any other has continued to put resources on the plate of public finance stability even at the expense of a more immediate revival of economic growth. This is indicated by a few simple numbers that the economist-archaeologist can offer to the attention of the policy maker-architect. It suffices to put on the same graph the averages realized between 2008 and 2014 of the primary balances of the public accounts - those net of interest - and the variations in volume of the gross domestic product.
Among the large countries of the Eurozone, Italy is the only one to be placed in the quadrant that associates a primary surplus of the public accounts – for us, on average higher than one point of GDP – with an economy on average in recession. The dial of that painful virtue in which other countries have not dwelt, strengthened by lower initial ratios between public debt and GDP. We are talking about Spain and France, which went through the crisis between 2008 and 2014, always maintaining a minus sign in front of the primary balance of the public accounts. The case of Germany is different, which like Italy has been able to maintain a fiscal surplus net of interest, but with an economy that has grown on average by more than half a point a year.
Italy has been able to tighten its belt more than others. He paid a very high economic and social price to follow the European route of containing overall public deficits through the systematic generation of primary surpluses. Looking ahead, the long season of low interest rates opened up by European QE could allow the virtue shown in containing debt flows to also translate into the start of a process of gradual containment of the ratio between public debt and GDP. This is the new challenge awaiting policy makers. A challenge, however, which in Italy and elsewhere cannot be overcome by excessively raising the size of primary leftovers. This is suggested by the excellent retrospective analyzes carried out by Barry Eichengreen and Ugo Panizza on a sample of 54 countries in the period between 1974 and 20132 . It's not just good archaeologists who recommend it. To consolidate an architecture between stability and growth, we don't need super-surpluses from the public accounts. It takes the practice of sanity and the completion of reforms, to build trust along with demand and to plant the seeds of a long-awaited recovery.
