It took thirty years for Parliament to finally arrive at amend Article 81 of the Constitution by introducing stricter budgetary rules, making the obligation to cover the expenses authorized by the new laws more stringent, placing constraints and limits on debt. The need to strengthen the constitutional rules on public finance had already been clearly indicated by the Bozzi Commission which had implemented the proposals in this sense advanced and vigorously supported by Senator Andreatta. And again, after that, the bicameral Jotti and D'Alema had re-proposed the same theme while our debt, year after year, continued to grow both in absolute terms and in relation to GDP.
The decision is now being adopted by Parliament because Europe requires it, because the global crisis is pressing us: but once again it is the external constraint that induces the Italian political system to mark a sharp and clear discontinuity in economic and budgetary policy. Yet it was this reluctance, this deaf and stubborn resistance to abandon policies based on the expansion of spending and instead to initiate pro-competitive structural reforms at the origin of the most serious political-institutional crises in republican history.
And indeed, the First Republic was overwhelmed in 92 by the financial crisis and by the corruption of which the expansion of public spending in the previous fifteen years had been both cause, effect and multiplier. And today, once again, the Second Republic is shipwrecked in the financial storm that hits Europe and affects Italy more than any other which, after the initial run-up to join the euro, has not been able to put its hand to the reforms essential to guaranteeing together compliance with budget constraints and competitiveness of the economy.
Social security, labor market, welfare, large infrastructures, public administration, liberalisations: these are the failed reforms . And now our debt and our low growth mercilessly reflect the political immobility, the lack of strategic vision and leadership that have characterized the past fifteen years.
It is no coincidence that it is up to the Monti Government, with the approval of the new article 81, to give the first strong sign of discontinuity, to affirm a different responsibility in the management of public finances, a new ethics in the relationship between generations.
The text approved yesterday in first reading by the Chamber contains a number of very significant innovations. In the first place constitutionalises the principle of a balanced budget adjusted for the effects of the economic cycle. However, the sterilization of the effects of the cycle will not be an automatic result but will have to be explicitly authorized by the Chambers with a qualified majority which will avoid deferring such an important decision to the government majority. In other words financial stability becomes a constitutional value whose temporary non-compliance must derive from a shared assessment of the exceptional nature of the economic situation or other extraordinary events.
The budget stabilizer is therefore not automatic but eventually authorized from time to time. The entire public system is associated with the responsibility for financial rigor, account stability and debt level sustainability. As a result, Title V was modified on the one hand to strengthen state competence in the matter of harmonizing budgets and on the other to extend the principle of equilibrium to all public administrations, ie including regions, provinces and municipalities. All required from now on to observe the draw rule. As a result, paragraph 6 of article 119 is therefore amended which, for sub-state levels, in 2001 introduced the so-called golden rule, i.e. the possibility of financing investments through debt: this faculty remains but any recourse to debt it must be accompanied by a clear amortization plan and must in any case be compensated at the level of each region to achieve a "regional" break-even. This is an important innovation because for the first time local finance is aggregated on a regional basis to optimize overall budget balances. There will certainly be protests from the municipalities, but it is a necessary rationalization which will eventually give some fresh air to local investments.
Finally, the novelty that has aroused great debate because it represents a profound change in the governance of public finance. By adhering to Europe's requests, an independent body (strongly linked to the Union institutions) will be set up to supervise public finance trends. The European Union does not trust and wants to see clearly in Italy's accounts. And he wants to do it with a body that answers more to the European authorities than to the national ones. A further and more incisive transfer of sovereignty because this time it does not only concern fiscal and budgetary constraints and policies but pertains to the institutional organisation. It's a an ineluctable and indeed desirable process for those who still hope we can arrive at a political Europe, the only one that can save the euro, Italy and the European dream.
It has been said that after the Europlus agreement it would not even have been necessary to make explicit the new budgetary rules in the national constitutions; on the contrary, beyond the strictly juridical profile, the parliamentary approval of the new article 81 of the Constitution has great value in terms of political culture because it marks a moment of break, of discontinuity with the past: growth is not achieved with spending and with the explosion of public debt. Growth is achieved with reforms that make our country more modern, more similar to other countries that, like us, use the euro and with which we have to compete every day on the European and global markets. This means the text approved yesterday.
If Monti will be able to get the ruling class and all Italians to accept this new reality, if he will be able to keep us in Europe having done all the tasks that Europe has asked of us, then nothing will be the same. The political class that has not been able to lead the country in this blizzard will in fact be shelved and the country will claim to be governed (and certainly not and not just for a few months!) by a serious, competent and courageous governing class.
