Over 150 economists have written an open letter to the Prime Minister Giuseppe Conte, the Economy Minister Roberto Gualtieri and the EU Commissioner for the Economy Paolo Gentiloni in which they express all their concern for the fate of Italy and the European Union, grappling with a very serious crisishealth crisis linked to the coronavirus emergency which is already leading to very heavy economic repercussions globally.
Important economists and professors from the main Italian universities signed the document, including former minister Rainer Masera of the Marconi University, Giovanni Dosi of the Sant'Anna School of Advanced Studies in Pisa, Maria Cristina Marcuzzo of the Accademia dei Lincei and of the La Sapienza of Rome, Massimo Egidi of the Luiss of Rome, Gianfranco Viesti of the University of Bari, Pietro Alessandrini of the Polytechnic University of the Marches, Nicola Acocella of the La Sapienza University of Rome, Andrea Boitani of the Catholic University of Milan, Annalisa Rosselli of the Tor Vergata University of Rome, Francesco Silva of the Milan Bicocca University.
The letter opens with a request that leaves no room for doubt. The European Union must intervene. Indeed, the "global" characteristics of the emergency require "timely economic interventions by international bodies".
It is urgent that the European Union adopts a package of economic policy measures capable of dealing with the serious health and economic crisisdue to the spread of the coronavirus. The problem is global and requires prompt cyclical interventions by international bodies.
It is now clear that the recession that lies ahead is not only determined by the drop in supply, as was erroneously diagnosed by some days ago, but is also linked to the sharp reduction in demand.
On the supply side, the slowdown in global economic activity leads to abrupt interruptions in the supply chains of international production chains (global value chain). The reduction in production levels reduces revenues and unsustainably increases the weight of fixed costs of companies.
On the demand side, the consumption of goods and services is undergoing a sharp contraction in many sectors and the domino effect is amplifying its effects, throwing the entire economy into crisis.
The recession awaiting Italy, determined according to the 150 economists by the parallel reduction in supply and demand, risks setting the country back 12 years, nullifying the efforts made since 2008 to get out of the great financial crisis caused by the bankruptcy of Lehman Brothers. According to Moody's, Italian GDP could contract by 0,5% in the event of a baseline scenario, while in the presence of an "extensive and significant slowdown" the figure could settle at -0,7%. On FIRSTonline, economists Luca Paolazzi and Fabrizio Galimberti talk about “tsunami risk for the world economy". What to do then?
Such a serious emergency, not properly managed, could lead to the end of the single currency and ultimately to the final disintegration of the European Union. What are the reasons for staying together if the European Union is not even able to intervene effectively in the face of a crisis that is affecting all European countries?
Right now urgent funding is needed to support the healthcare system, families and businesses in all European countries, but we do not believe that it is only a question of guaranteeing greater flexibility to national public budgets, because the allocations of individual states would not be sufficient and in any case would lead to increases in the public deficit and in the spread of interest on public debt which would nullify the policies for rebalancing public accounts .
We agree with whoever claims that the European Union must place substantial resources at the disposal of the member countries to deal quickly and adequately with the health, economic and social emergency. We believe that this moment of crisis must be transformed into a concrete opportunity to enhance the specificity of Europe compared to other health and social protection systems, and to show European citizens the profound meaning of our union.
Therefore i is not enough 25 billion promised by the Italian government to deal with the economic consequences of the coronavirus emergency, nor the flexibility that the European Union has already said it is willing to grant to our country. More is needed: a strong and diligent intervention by the European Union. Otherwise, the risk is that the recession caused by the coronavirus emergency will turn into the end of the euro and the EU. to avoid it, economists presented eight different proposals ranging from measures in favor of workers, families and businesses, to a major investment plan that can revive the economy of the Member States.
The proposal
Urgent measures to deal with the health and economic crisis should concern:
1) The immediate financing of European Union health systems for the increase in healthcare personnel and hospital beds, for the expenses relating to clinical trials and for equipment for the protection of healthcare personnel.
2) A temporary unemployment benefit for all workers on permanent or fixed-term contracts who will be out of work in the next few months due to the downturn in production activity.
3) A financial compensation for families placed in home quarantine.
4) Subsidies and opening of credit lines to businesses who have to suspend their activity temporarily due to the quarantine of staff or the fall in demand from consumers.
5) Assistance to minors in case of hospitalization of both parents and to the elderly not self-sufficient in the case of hospitalization of the people who assist them. Aid to families during periods when schools are closed as a precaution.
6) A fextraordinary funding of the school system for the purchase of equipment that allows distance learning.
7) A funding for third sector organizations who operate in support of emergency situations created by the spread of the coronavirus.
8) Finally, you need to realize a large investment plan, relating to infrastructure and the environment, which will relaunch the European economy already heavily affected by the financial crisis and now brought to its knees by the health crisis.
Where to find the money? The 150 economists who signed the letter propose to set up a "tool of purpose", financed through common guarantees and, above all, characterized by low interest rates.
Financing the necessary resources
These measures require the implementation of a rapid plan of current expenditure and public investment. To finance these expenses, an appropriate instrument will have to be created, supported by common guarantees, free of risk, and therefore characterized by low interest rates (safe assets).
It is foreseeable that this new instrument will be well accepted by the mass of currently idle savings. The funding for these expenditures could be distributed to individual countries in proportion to the population
10 March 2020
Francesco Abbate, University of Turin
Nicola Acocella, University of Rome "La Sapienza"
Tindara Addabbo, University of Modena and Reggio
Carmen Aina, University of Eastern Piedmont
Pietro Alessandrini, Polytechnic University of the Marches
Alessia Amighini, University of Eastern Piedmont
Davide Antonioli, University of Ferrara
Alessandro Arrighetti, University of Parma
Guido Ascari, University of Oxford and University of Pavia
Francesco Asso, University of Palermo
Alessandro Balestrino, University of Pisa
Leonardo Bargigli, University of Florence
Adriana Barone, University of Salerno
Roberto Basile, University of L'Aquila
Marco Bellandi, University of Florence
Enrico Bellino, Catholic University of Milan
Simona Beretta, Catholic University of Milan
Carluccio Bianchi, University of Pavia
Mario Biggeri, University of Florence
Andrea Boitani, Catholic University of Milan
Leonardo Boncinelli, University of Florence
Carlo Borzaga, University of Trento
Luigi Brighi, University of Modena and Reggio Emilia
Sheila Anne Chapman, LUMSA, Rome
Alessandro Caiani, IUSS Pavia
Rosaria Rita Canale, University of Naples "Parthenope"
Chiara Candelise, Bocconi University
Salvatore Capasso, University of Naples "Parthenope"
Riccardo Cappellin, University of Rome Tor Vergata
Floro Ernesto Caroleo, University of Naples "Parthenope"
Laura Castellucci, University of Rome "Tor Vergata"
Stefano Castriota, University of Pisa
Alberto Cavaliere, University of Pavia
Enrica Chiappero-Martinetti, University of Pavia
Guglielmo Chiodi, Sapienza University of Rome
Maurizio Ciaschini, University of Macerata
Fabio Clementi, University of Macerata
Caterina Colombo, University of Ferrara
Gianluigi Coppola, University of Salerno
Lorenzo Corsini, University of Pisa
Lilia Costabile, University of Naples Federico II and Clare Hall, Cambridge
Valeria Costantini, University of Rome "Tor Vergata"
Elisabetta Croci Angelini, University of Macerata
Marco Cucculelli, Polytechnic University of the Marches
Eleonora Cutrini, University of Macerata
Simone D'Alessandro, University of Pisa
Bruno Dallago, University of Trento
Domenico Delli Gatti, Catholic University
Mirella Damiani, University of Perugia
Marco Dardi, University of Florence
Luca De Benedictis, University of Macerata
Pasquale De Muro, University of Rome "Tor Vergata"
Pompeo Della Posta, University of Pisa
Sergio Destefanis, University of Salerno
Cinzia Di Novi, University of Pavia
Giovanni Dosi, Sant'Anna High School, Pisa
Massimo Egidi, LUISS Guido Carli
Alessandra Faggian, Gran Sasso Science Institute
Francesco Farina, Luiss, Rome
Stefano Fasani, Queen Mary University of London
Davide Fiaschi, University of Pisa
Michele Filippo Fontefrancesco, University of Pollenzo
Damiano Fiorillo, University of Naples "Parthenope"
Chiara Franco, University of Pisa
Gianfranco Franz, University of Ferrara
Maurizio Franzini, University of Rome "La Sapienza"
Ugo Fratesi, Milan Polytechnic
Andrea Fumagalli, University of Pavia
Mauro Gallegati, Polytechnic University of the Marches
Giuseppe Garofalo, University of Tuscia
Gioacchino Garofoli, University of Insubria
Luisa Giallonardo, University of L'Aquila
Luca Gori, University of Pisa
Stefano Gorini, University of Rome "Tor Vergata"
Gianluigi Gorla, University of Valle d'Aosta
Tullio Gregori, University of Trieste
Michele Grillo, Catholic University of Milan
Davide Infante, University of Calabria
Stefano Lucarelli, University of Bergamo
Elena Maggi, University of Insubria
Antonio Majocchi, University of Pavia
Susanna Mancinelli, University of Ferrara
Andrea Mangani, University of Pisa
Maria Cristina Marcuzzo, Sapienza University of Rome, National Academy of Lincei
Enrico Piero Marelli, University of Brescia
Luigi Marengo, LUISS Guido Carli
Simone Marsiglio, University of Pisa
Alberto Marzucchi, University of Sussex
Rainer Masera, Marconi University
Carla Massidda, University of Cagliari
Massimiliano Mazzanti, University of Ferrara
Nicola Meccheri, University of Pisa
Marco Missaglia, University of Pavia
Maurizio Mistri, University of Padua
Sandro Montresor, Gran Sasso Science Institute
Mario Morroni, University of Pisa and Clare Hall, Cambridge
Marcella Mulino, University of L'Aquila
Chiara Mussida, Catholic University of Milan
Augusto Ninni, University of Parma
Ferdinando Ofria, University of Messina
Guido Ortona, University of Eastern Piedmont
Stefania Ottone, University of Milan Bicocca
Paolo Paesani, University of Rome Tor Vergata)
Antonella Palumbo, University of Rome "Tor Vergata"
Carlo Panico, University of Naples
Maria Laura Parisi, University of Brescia
Valentino Parisi, University of Cassino
Francesco Pastore, University of Campania
Gabriele Pastrello, University of Trieste
Pasquale Pazienza, University of Foggia
Anna Pellanda, University of Padua
Lorenzo Pellegrini, Erasmus University Rotterdam
Anna Pettini, University of Florence
Paolo Piacentini, University of Rome "La Sapienza"
Ferruccio Ponzano, University of Eastern Piedmont
Giuseppe Porro, University of Insubria
Rosita Pretaroli, University of Macerata
Maurizio Pugno, University of Cassino
Paolo Ramazzotti, University of Macerata
Giovanni Ramello, University of Eastern Piedmont
Giorgio Rampa, University of Pavia
Gian Cesare Romagnoli, Roma Tre University
Donato Romano, University of Florence
Annalisa Rosselli, University of Rome "Tor Vergata"
Lorenza Rossi, University of Pavia
Donatella Saccone, University of Pollenzo
Andrea Salanti, University of Bergamo
Enrico Saltari, University of Rome "La Sapienza"
Lino Sau, University of Turin
Antonio Savoia, The University of Manchester
Maria Luigia Segnana, University of Trento
Susan Mary Senior, former University of Siena
Marcello Signorelli, University of Perugia
Francesco Silva, University of Milan Bicocca
Annamaria Simonazzi, University of Rome "La Sapienza"
Claudio Socci, University of Macerata
Anna Soci, University of Bologna and Clare Hall, Cambridge
Riccardo Soliani, University of Genoa
Bruno Soro, University of Genoa
Stefano Spalletti, University of Macerata
Antonella Stirati, University of Roma Tre
Lucia Tajoli, Milan Polytechnic
Renata Targetti Lenti, University of Pavia
Mario Tiberi, former University of Rome "La Sapienza"
Patrizio Tirelli, University of Pavia
Melissa E. Tornari, Coventry University and Carlo Alberto College
Leonello Tronti, University of Roma Tre
Milica Uvalic, University of Perugia
Giovanni Vaggi, University of Pavia
Marco Valente, University of L'Aquila
Enzo Valentini, University of Macerata
Vittorio Valli, University of Turin
Elena Vallino, University of Turin
Massimiliano Vatiero, University of Trento and University of Italian Switzerland
Andrea Ventura, University of Florence
Alessandra Venturini, University of Turin
Alessandro Vercelli, University of Siena
Sergio Vergalli, University of Brescia
Cecilia Vergari, University of Pisa
Gianfranco Viesti, University of Bari
Gennaro Zezza, University of Cassino
