Maneuver, the failure of a ruling class

The Italian economy has not grown since the beginning of the third millennium. Ten years of stagnation are the constant on which the effects of the first global financial crisis are inserted: a recession, in real terms, but also the imbalance in the public finance structures.
An imbalance that has three characteristics: since the 2012s we have inherited an excessive size of debt compared to GDP; the average residual duration of the securities that represent it is around seven years, the debt is too "short"; the looming deadlines predict that between now and the end of 380 it will be necessary to refinance almost XNUMX billion euros: a figure, to be found on the financial markets, which accumulates with the deficit between income and expenditure that the maneuver seeks to bring back into balance. While interest on debt neutralizes efforts to create a primary surplus that could reduce the debt stock.
Without growth, in GDP, and without asset disposals, there is no possibility of reducing the ratio between public debt and GDP.
The ten years of stagnant profile are also the ten years in which Italy's participation in the experiment of the single currency in Europe is launched and consolidated. Those who were pessimistic about the outcome of the experiment, also due to the ways in which it was carried out, put forward three types of difficulty: real economies that are too different from each other, in terms of technology, labor productivity, capital of knowledge to support growth, quality and efficiency of institutional structures; fragmentation of the languages ​​and legal systems that regulate the European economy as a whole; heterogeneous quality of the political system, of the ways in which the political system governs the administrative systems it uses, on the scale of the national government and local governments, themselves more or less fragmented, according to the various national legal systems.
The first decade of the euro also had to face three clamorous and dangerous unforeseen events: September Eleven and its consequences; the implosion of the Soviet Union and the migration of the nations it controls to the European Union, accompanied by the strengthening of Russia as a nation; the first global financial crisis. It should come as no surprise that the euro is now considered a fragile currency by a significant proportion of international financial operators. It should come as no surprise that Italy, which from the outset belonged to the core group that launched the euro and which represents the third largest real economy in the Union, also represents an interesting target for international speculation. Italy is too big a prey to be saved only by France and Germany, but it is also one of the countries which, at the time, presented all the contradictions which would have discouraged its participation in the euro and which, in the last decade of the second millennium as in the first decade of the third century, it demonstrated a growing incapacity of its own political class and its ruling class, to find a reasonable balance of government and to impress a profound transformation, healing its own contradictions, in the real economy, in social behavior and in the mode of administration of public affairs.
In short, the second republic ended up in failure. As a result, Italy has become the main target of those interested in demonstrating the failure of the euro. This is the danger hanging over our country. This danger is the consequence of the failure of the second republic but also of our inconsistent ability to use participation in the European Union to improve and redevelop the economic morphology and organization of public administration in our country. Participating was necessary but our participation was of little use to us, due to our ruling class. It is evident that the balance and stability of growth, after the serious financial crisis, depend on the intelligent combination of efforts by central banks and governments which must guide the economies entrusted to them towards growth. But this harmony between the political class and the monetary authorities is stronger in the United States than in the European Union. Too weak in Italy. The Monetary Fund repeats continuously, from Strauss khan to Lagarde, that the problem is to grow in financial stability and not to depress growth in pursuit of public budget austerity that turns into recession. It is a difficult equation to solve but the Italian Government's response to this question has been, up to now, and unfortunately will now be judged in the future as well, as it has been perceived, absolutely pathetic.
The most fragile and least able to grow country should have done three things: not aim only at an increase in the primary surplus in the public accounts; sell assets, real estate and movable property to reduce the stock of public debt; better organize the production of public goods, make the public sector work harder and more efficiently instead of depressing people's psychology. Breaking encrustations of power and category, hitting corporations of swindlers inserted in the folds of the system. Treasury, budget and finances were combined by Ciampi into a single ministry. But Tremonti, like the ministers of the center-left coalitions, have used only one of the three tools: taxation, taxes to be increased and spending cuts. The centrality of budget account balances is meaningless in real economic terms: a budget, with which spending is requalified and the administrative machinery is reorganized, could guide growth even if it closed with a large surplus. A balanced budget, where the productivity of the human resources of the public machine remains low and pensions, wages and investment expenses are cut while income taxes are increased, ends up being more deflationary than the surplus budget which has transformed work processes and expenses.
Targeting tax evasion, targeting crime and scams is obviously a good thing but those funds should be re-used to fuel growth, otherwise it's just a new tax burden and guaranteed deflation. Raising indirect taxes and reducing the tax wedge between the wages received by workers and the wages paid by firms increases productivity and reduces some tax evasion. The egalitarian myth of progressive direct taxes in post-modern society does not hold up: it is better to tax expenses than income. The economic result counts and not the arithmetic of tax accounting. What remains of this whirlwind of options and counter-options that the government and parliament dribble between themselves? Only the discrediting of the ability to govern, by the majority, and the birth of a myriad of corporations that aggregate for reasons of fiscal opportunism and indirect pressure on Parliament, disrupting any hypothesis of social cohesion, of which the country, if it wanted to have a shot of the kidneys for a change, would really need. Cohesion, which would be the cement of the choices for change, is lacking, and the inadequacy of who should govern those choices comes to the fore.
A nice confirmation that attacking Italy to weaken the European experiment is indeed a viable result. Someone could practice it, consequently and successfully, in the coming months. And, overwhelmed by an autumn financial storm, we will be forced, at an even higher price, to sell public assets, make honest taxpayers shed tears and blood, suffer an increase in interest rates on debt which will reduce the margins for reorganization of public budgets. We could use these instruments – the transfer of assets; international cooperation, to lengthen and dilute public debt burdens over time; the reorganization of the public administration – to close the gaps between the two Italys in the twenty years we have behind us. We will, sadly, do it too late and too badly anyway. This default will not only be the failure of the majority in government today but also the failure of the political system of the last twenty years: the second republic. The useless and inconclusive bipolarism that has transformed the parliament into the club of employees at the service of the "lords" of politics. A "miserable feudalism" for a country in which, despite everything, the Italians, at least a large part of the Italian population, are still, and fortunately, certainly better than the state that governs it.