Government, balanced budgets and liberalisations: correct principles but tardy effects

Better late than never. After stalling for too long, with the surprise press conference on Friday evening by Silvio Berlusconi and Giulio Tremonti with the markets closed, the Government has finally struck a blow in the face of the market emergency that has been heavily targeting Italy for days and days. All the reports indicate that it was the pressure from the international authorities (from the top management of the European Union and the ECB to the White House) and from the most authoritative Italian authorities (from the Quirinale to the Bank of Italy) that prompted the prime minister to leave his numbness. Whether he did it reluctantly or not, what counts are the facts. And the principles that inspire the novelty poker put in place by the Government to deal with financial speculation are undoubtedly good: the obligation of a balanced budget in the Constitution is positive, as is the advance of the maneuver to achieve a balanced budget at least in 2013 and the freedom of enterprise and the liberalizations resulting from the foreseen amendment of article 41 of the Constitution are positive, as well as the reform of the labor market and the advance of the tax and welfare delegation. The principles are right, but it is the timing of the effects that turn up their noses, because they are uncertain and certainly not immediate. As for the contents, we will have to see the lyrics, because the devil often hides in the details.
Why are times decisive? Because the markets, which – as Innocenzo Cipolletta recalls in the article that opens the Filo direct section of Firstonline – have a good part of our enormous public debt in their pockets and therefore count for a lot and circumscribe our own freedom of action, want immediate answers on the debt relief, financial stability and growth.
The obligation to break even in the Constitution is an additional barrier to cheerful finance, but it is not immediately effective and in any case it is a necessary but not sufficient condition for the recovery and reduction of the public debt. The same can be said of the anticipation of the maneuver: it is a step forward but, with equal protests from the social partners, it would have been much more effective to anticipate it to 2012 rather than 2013 on which the uncertainty of the end of the legislature and the postponement to later hangs the next elections.
Then there is the issue of liberalisations: here too, having to go through the complex procedure of amending the Constitution, times are uncertain and certainly long, and the effects are equally long. It would have been much more effective to resort to a flurry of decrees, justified by the financial emergency. On the reform of the labor market which, hopefully, will give more space to company bargaining, we will see from the contents. In short, as Ambassador Sergio Romano wrote in his editorial in the Corriere della Sera, what the Government did on Friday evening "is fine but not enough". And perhaps another authoritative columnist such as Mario Deaglio is not wrong when in La Stampa he claims that it takes "more courage to really change" and that the announcement
important and more concrete than Berlusconi does not concern so much the 4 measures envisaged, but the fact that a new G7 meeting will soon be held which could be the prelude to a new G8 which, beyond the waltz of acronyms, should finally adopt new and more incisive rules on the regulation of international markets.
One rather bitter consideration remains to be made: was it really necessary to pay the very high price that we are all paying and helplessly wait for the perfect storm of the markets to decide the bare minimum to deal with the financial emergency? Playing in advance would have been a sign of elementary wisdom but recriminations do not go far, even if the merciless judgment on the absence of leadership that affects almost all Western countries is the very reality of every day to ask us.