The state of relations between our country and the European Union is bad, and even more worrying is the incomprehension of both sides' reasons that is deepening between national elites and in public opinion. And yet, there have been positive economic policy decisions at every level which have contributed to the cohesion of the system.
In Italy, Europe appears as the surly controller of the budget that prevents the economy from being revived, the unjust flogger of the banks, the miserly dispenser of the aid necessary to manage unstoppable migratory flows - a problem that now concerns almost exclusively the 'Italy, the only European country in which migrants can enter, but from which they can no longer leave. Substantial layers of industrial and financial management show distrust in our ability to stay in the euro; some even hope for our exit from the common currency, I fear without carefully evaluating the consequences (on the subject, I suggest consulting the Greek premier Tsipras, who changed course when the end of the ECB's liquidity support forced the banks to close). He certainly did not help the public rhetoric of the outgoing government which was excessively and unnecessarily aggressive towards Europe, in the vain hope of taking away ground from the populists of Grillo and Salvini. It didn't work to collect votes, but it fueled public opinion's hostility towards Europe.
In reality, Community Europe has responded to our requests for budgetary flexibility, with the Juncker Plan, now increased again (of which Italy is proving to be an excellent user), the communication from the Commission at the beginning of 2015, and the courageous request for an aggregate expansionary maneuver equal to 0,5% of European GDP; while the ECB has launched since the beginning of last year an aggressive policy of monetary expansion which has favored us with the drop in long-term interest and the depreciation of the euro, heading towards parity with the dollar.
In the case of MPS, the Frankfurt supervision has tightened the capital requirements (perhaps it could have communicated the decision a little better) for losses, but has opened up significant margins of flexibility for us with the precautionary recapitalization regime, allowing us to avoid full enforcement of the bail in and to compensate retail savers for losses on junior bonds. Nor have our requests for greater burden-sharing for reception and management of migratory flows remained unanswered - even if the courageous decision on reception quotas promoted by the Commission, and initially accepted by the Council, then collapsed in the face of insurmountable resistance of the member countries. Among the documents attached to the conclusions of the last European Council, there is one that documents the sharp decline in trans-Saharan migratory flows towards the Libyan coasts, thanks also to the efforts of the European Union towards the countries of origin.
Meanwhile, in Berlin and in the other European capitals the image of Italy as a country refractory to budgetary discipline and compliance with the European rules on state aid is once again being consolidated. In reality, Italy has performed a half-miracle, bringing and keeping the public deficit below 3% of GDP since 2010, despite a fall of more than 10 percentage points in GDP per capita (and 25% in industrial production ). Meanwhile initiating fundamental reforms in the pension system, the labor market and the banking system.
The slowness in tackling the most acute areas of suffering in the banks, due in no small part to the general paralysis of the decisions imposed by Renzi in view of the referendum, weighed heavily on the negative image that nonetheless remains stuck to us; just as some forcing of budgetary policies weighed, more than in the decimals of encroachment, in the bad quality of certain distributions of money that were supposed to bring consensus - the two bonuses of 500 euros to young people who voted for the first time, costing over half a billion euros!
Furthermore, the Eurogroup, and later also the European Council, have not forgiven us for blocking the discussion on the reduction of banking risks, which also resulted in the chain blocking of any discussion on risk sharing in the banking union. Counterproductive also seems to me the virulent attack carried out by many Italian subjects on the bail-in mechanism, which in other countries worked without excessive trauma (with the partial exception of Cyprus and Portugal) and which was adopted in 2013 with our consent ( without, however, adequately informing savers of the change in risks).
In 2017 Italy will have to face difficult passages in Europe, both in terms of budgetary policies, where some knots will inevitably come home to roost, and in terms of banking, where the hesitations of the recent past will have to give way to radical decisions, but the goal of a stronger and more stable system is at hand. As for the migratory wave, I fear there are no alternatives to a hardening of our reception policies - involving Europe as far as possible, but also acting decisively on our own.
I would suggest to President Gentiloni – who will certainly find full support in this from Minister Padoan – to devote every effort to healing the wounds and rediscovering a constructive dialogue with the European institutions and partner countries, above all Germany. If one tones down and explains better, Italy's reasons are easily defensible – above all if it is possible to resume the path of the reforms that the unfortunate pre-referendum phase had blocked.
