While Italian politics is all withdrawn into itself in the usual, cloying and hypocritical debate on things to do, which, however, in reality nobody really wants, to put this country back on a track of normality, some truly decisive matches are taking place in Europe for our future: the one on the unification of banking supervision and the one on the contractual arrangement. The latter could be the real novelty of the next EU Council in mid-December, and consists in the possibility of stipulating an agreement between individual States and the EU Commission which specifies the itinerary of the reforms to increase the productivity of the economies, in exchange for a financial support from Brussels to meet the initial costs of the reforms. In theory, this is a further mechanism to make it a little easier for individual governments to launch reforms, while at the same time giving a more concrete content to community solidarity.
Until now, Italy had expressed many perplexities about this new creature, but now it seems that Letta and Moavero are more open to its approval, even if they do not comment on Italy's intention to stipulate such a contract. Already concerns are being raised by the diverse world of Europe's opponents about the risk of a further loss of sovereignty by Italy, without actually getting anything in return. A sovereignty that up to now we have used very badly. And yet it is right to understand a little more deeply what we are talking about and therefore what could be a correct attitude on the part of our country with a view to advancing the construction of a united Europe without falling into the opposite extremisms of those who consider excellent everything that is being done in Brussels or of those who instead want to leave the Euro and abandon the excesses of rigorism of the peoples of the North.
We asked Stefano Micossi, general manager of Assonime and expert in the secrets of complicated community architecture, what exactly it is about and what could be the most convenient thing for Italy to do.
MICOSSI – “From an institutional point of view – says Micossi – it could be an interesting innovation, because it would make a policy of reforms that many countries are implementing or should implement shared in Europe. In fact, these agreements should be discussed and approved by both national and Brussels parliaments, with the effect of making economic policy choices more participatory and more democratic. This in theory. In practice, however, it seems strange that we are discussing a new instrument to advance the implementation by individual states of economic policy guidelines, when in recent years we have created a long series of instruments, from the six pact to the fiscal compact, which they provide for binding and stringent procedures to impose on everyone the respect of the commitments undertaken in the councils of heads of state. But these instruments are not activated or it is not possible to implement them politically”.
And this happened because it was more or less convenient for everyone, and in particular for France and Germany. To the first due to the inability to carry out the reforms that would be necessary to improve competitiveness, to the second because absorbed in the long electoral phase which will lead to a new grand coalition government in just a few weeks.
MICOSSI – “I think this phase of appeasement has mostly benefited France, which faces major obstacles in modernizing its system. If we then look at the situation of the various European countries, we see that Portugal, Ireland, Spain and Greece, which are under the European bailout programme, have done what the troika has prescribed them and are now already emerging from the most acute phase of the crisis . So it would be an agreement designed essentially for France and Italy. And would it be credible for the markets and for public opinion?”.
So an idea born to strengthen European cohesion would actually risk being perceived as a new imposition by the stronger countries, offering only the classic dish of lentils in exchange.
MICOSSI – "To create a real new cohesion instrument for Europe, then Germany should also sign a similar pact, undertaking to carry out those liberalizations of its services and energy market that could bring great benefits to other countries in the sectors ( such as Italy in energy) which have excess production capacity. Even the Germans, then, should agree to start the new rules on unified European supervision as soon as possible without defending their politicized regional banks to the bitter end. Furthermore, truly effective economic policy lines would be needed with the aim of reabsorbing the enormous German trade surplus which certainly exports deflation to other areas of Europe”.
In other words, adjustment obligations cannot continue to be asymmetrical. It's time to call on the Germans to do their part. Not in the sense of continuing to help the spendthrift countries of the Mediterranean, but by expanding their domestic demand and liberalizing their markets in order to help other countries' exports. However, they still have to make many reforms to be efficient and know how to export.
MICOSSI – “Of course, in Italy the time to make serious and incisive reforms can no longer be postponed, which however must have real and substantial financial resources as a counterpart from Europe which allow us, for example, to start the reform of the labor market and that is the replacement of the redundancy fund by way of derogation from ASPI which would make it possible to manage job mobility more effectively by giving a decent unemployment benefit to those who are temporarily unemployed. The launch of this reform requires a lot of funds, for example they could come from the EU allowing us to demobilize the structural funds that we are unable to spend or that we spend without any result on competitiveness”.
But wouldn't a less rigorous financial policy even towards countries like Italy that have a high public debt be penalized by the financial markets that continue to express doubts about our ability to meet our commitments?
MICOSSI – “If Europe were capable of expressing real political cohesion and it were possible to proceed all together on the path of reforms involving both the countries with a lack of competitiveness and the so-called virtuous ones (which then have so many flaws to eliminate) then the markets they would not lose confidence even in the face of temporary debt increases. Interest rates would remain low in relation to the positive expectations that real reforms could arouse”.
