It is reasonable to assume that during the term of the European Parliament which will open at the end of May the Chinese currency (yuan or renminbi), against the development of international trade of the Asian giant, it will become convertible into other currencies, including the dollar and the euro. It may be that the incessant process of financial innovation means that the yuan is traded first on an unofficial gel market such as OTC or shadow banking, then by force of circumstances and underlying interests, like any currency that has become strong, assumes the rank of reserve currency of central banks on a par with the dollar and the euro. It should therefore not be surprising if the Chinese central bank will proceed to invest in public bonds issued by European sovereign states, including Italy.
THE DIFFICULT FUTURE OF THE EURO
In this context, the arbitrage that today takes place mainly between only two strong currencies (dollar and euro) will concern three currencies tomorrow, in all probability to the detriment of the currency which will present itself with the weaker underlying economy. Maybe the EU? This is just one example of the problems that the EU will have to face during the next legislature, for whose action in Italy reforms as deep as never specified are called for. It follows that the debate that is developing seems light years away from the proclaimed importance of the forthcoming European elections. Objectives are indicated, often appreciated by the voters, but silence is kept on the means to achieve them, as well as on the reforms consistent with them, but perhaps unwelcome in the polls of immediate consensus.
THE EXAMPLE OF ROOSEVELT'S USA
History documents that some governance best practices may still be valid. If today some aspire to emulate both The Donald in Italian sauce (Italy first) and his former adviser Steve Bannon (self-declared admirer of Julius Evola, a well-known philosopher in his time as a pro-Nazi), it would be more appropriate for others to aspire to emulate and take the inspired by the behavior of the democratic president of the USA FD Roosevelt. These, as we read in good books, to counter the economic crisis of the thirties of the other century and to start the second "new deal", without touching the powers of the Fed (established in 1913) regarding monetary policy and the strength of the dollar, before reformed financial markets by separating commercial banks from investment banks (Banking Act of 1932 and Glass Steagall Act of 1933); Then reformed the securities market (Securities Act of 1933); Then established the SEC-Securities and Exchange Commission (1934), finally, to offer protection from future risks to workers, the elderly and children, issued in 1935 the Social Security Act. Also the reform of the EU it should involve a before and an after with the relative priorities and correlations between them.
THE PROBLEMS OF THE EU
Italian politics, which at the time promoted and participated in the first new deal in Europe which started with the signing of the Treaty of Rome, today is astonishing that in the electoral campaign that has begun it limits itself to proposing, looking backwards, trivial measures such as excluding investments from the calculation of the primary public deficit or revise the coefficients for calculating potential income. Thus the great problems that lie ahead and underlie the current crystallization of the action of the European Union, which it instead aspires to re-found, are silent. It is silent on need for a fiscal policy of European standing; on a can European welfare like the Social Security Act; on the financial markets which will be exposed to the effects of international arbitrage between the strongest currencies; on the EU government and about the new and necessary powers to meet the growing strength of other economies. These are all intertwined issues, the solution of which will condition the economic development of the entire Union at the end of the past "golden decades" and near the start of a probable long-term stagnation.
EU REFORM: HERE'S WHAT SHOULD BE DONE
Here are just a few who are currently absent from the electoral campaign for next May's elections: the lack of a European Treasury Minister which, alongside the ECB, guides the budgetary policy of the Union; negligible tax revenue which feeds the EU budget and prevents any redistributive and anti-cyclical policy; contrasting the development of tax havens and tax competition within the EU (Cyprus, Malta, Holland and Luxembourg) capillarily managed with powerful information technologies to escape income taxation; there failure to implement the banking union and that of the venture capital market; the absence of an independent authority to control the stock and bond market risk capital which supports and partly replaces the national authorities (Consob in the case of Italy); the sharing and mutualisation of national public debt risks which, rather than for their size, are frightening for the repeated lack of confidence in the markets induced by the underlying government activity. Finally, if article 50 of the Treaty of Lisbon can be invoked to leave the EU or to re-enter it as the case is showing Brexit, without invoking the two-speed EU, the most riotous sovereign states, in compliance with the common rules, they should be placed in quarantine, for example in the case of the violation of the most elementary civil rights.
If the Treaty of Rome, with the relative loss of sovereignty of the adhering states, triggered the first new deal of the European Community, the relaunch of the EU in the international context cannot disregard the consideration that the best sovereignty practices of Europe do not allow the affirmation of the worst practices of national sovereignties.
