Adriano Giannola, Riccardo Padovani and Luca Bianchi presented some advances on the Svimez 2011 Report, published by il Mulino, which will be proposed for public discussion in the second half of September. The North and the South, say the three managers of Svimez, are linked to a common destiny, depressive, in the three-year cycle of the crisis (2007/2010), but they diverge at the end of the recession, when, albeit timidly, the first signs are seen of recovery.
Here lies the heart of the reasoning. But the analyzes offered by Svimez also offer singular clues of a process that will need to be better deciphered, when we will be in the presence of a larger and more articulated mass of data relating to 2010 and the advances relating to the first half of 2011.
The Italian dualism, which we all know well, must no longer be read between North and South, vertically with respect to the length of the peninsula but must be looked at diagonally: with a prosthesis that starts from the North East and stretches out towards Rome, cutting through the center of the peninsula and a sort of western comma, which sees the complementary part of the Italian economic geography (Piedmont, Liguria, part of Lombardy, Tuscany and the continental Mezzogiorno) as the whole that suffers hard blows from the recession and which is unable to restart at a adequate pace.
Of course, Piedmont, Liguria and Lombardy remain rich regions: in 2010, at the end of the recession, the per capita income of Piedmont exceeded 27 euros and that of Lombardy exceeded 32. Campania and Puglia, the last in the ranking, stop just above 16 thousand euros. But the size of per capita wealth is one thing while the ability to create wealth is quite another. In 2010 Campania, Puglia, Basilicata and Calabria show negative growth rates below zero. Liguria stops at 0; Piedmont grows slightly 1,3% but the average of the last ten years, for Piedmont is negative (-0,2%) like the four southern regions just indicated, with Basilicata showing the worst annual average performance (-0,7. XNUMX%).
An Italy divided diagonally, we said. But not only this character emerges. It emerges through three very useful indicators, an Italy that produces less and less and suffers blows both in terms of income per inhabitant, demand, and in terms of production per employee: productivity which should support supply and support the ability to compete in the rest of the world.
Svimez analysts have calculated, setting the average of the central north equal to 100, three indicators for the South in the ten years from 2000 to 2010: the product per inhabitant, the product per work unit and the work units per inhabitant . Certainly we read data cut vertically, along the traditional interpretation between North and South. We hope to soon be able to read the same interpretation in the diagonal edition, Veneto which extends towards Lazio and a comma to the west, which is slowing down in growth and struggling to resume road of development.
In 2000, the south has a product per inhabitant, the income that can be spent, equal to 56% of that of the centre-north, half. It has a product per unit of work, the value of services or goods produced by a worker, equal to 82% of that of the centre-north. It has a number of work units per inhabitant, equal to 68% of the centre-north: this means that every time just over three people work in the centre-north, only two work in the south. If you multiply the value of labor units divided by the population by the output per unit of labor, you get the output per capita. In short, the per capita product of the South is lower than that of the North because too small a part of the resident population works in the South. And each of those who work produces less than those who work in the central north.
But – while the work units compared to the population in the south, from 2000 to 2010, fluctuated between 68% and 67%, compared to the center and north – the low productivity of the south, compared to the center and north, went from 82% to 85% in 2010 compared to 2000. In short, too small a part of the population works in the South, but those who work have increased their personal productivity. You will wonder why. Because the bulk of the unemployed produced by the crisis is concentrated in the South. 60% of the jobs lost in the crisis are concentrated in the south, 281 out of over XNUMX. Because in the South companies are few and small. So under the blows of the crisis they close or lay off their employees.
In the central north there are layoff mechanisms that compensate for the effect of a deadweight loss of jobs. The South produces more because it has suffered a blow in the number of employed people. And it has also taken a hit in the lack of investment growth. In short, Italian companies improve their productivity because they reduce invested capital and human capital, the second in the south even more. In short, this increase in productivity is an effect of the progressive desertification of the business system. Italy will be, if this trend continues, an economy with a smaller economic system. And instead of counting the number of unemployed, which is compatible if not lower than European standards, we should count the number of employed people, which is becoming ever smaller compared to the standards of other European countries and advanced economies.
It will be said that however, in the south as in Italy, there is a lot of underground economy. But this is a further pathology which is coupled with too low productivity and increases the difficulty of competing. Since explicit companies, with low productivity, cannot stay on the international market and underground ones erode the margins of competition on the internal market in an unfair manner.
What does Italy represent today? An extraordinary metaphor of what Europe could become if it doesn't escape this spiral of pathological excess of public debt, to finance a welfare state that doesn't work, and if it doesn't reduce the too many differences that exist within it. But above all, Italy shows us how the policy of rigorism in public finance, widespread in Europe, further deflates the system: it is necessary but we only need it to float, to stay alive. Staying alive with rigor, however, said Adriano Giannola, we end up returning the budget surpluses to the owners of public debt securities, which are obtained by reducing social spending and investments in infrastructure.
Since the holders of those securities are foreign investors and, presumably, high-income people, who live in the North more than in the South, this strictly fiscal policy would see the South penalized, with even fewer services, and the North and foreign investors rewarded . Perhaps we should also think about an exchange rate policy and give ourselves an explanation on two points: why is the euro the only strong currency compared to the dollar while Europe is not a net exporting country? Why does Germany, which is a net exporter, use the advantage of hard currency while the Lazio-Veneto prosthesis represents an appendix of the German economy in Italy? Why doesn't China want its currency to appreciate as it should, given the Chinese economy's trade balance surpluses? How come a country incapable of competing due to its low productivity, such as Italy, but also a large part of Europe, must also bear the costs of a strong currency, which further jeopardize its ability to enter foreign markets while the rigor weaken the tone of domestic demand?
We are not saying that we should leave the euro: be very clear. But that we must implement a monetary policy in Europe and not leave the exchange rate in the hands of a central bank, which fears inflation while Europe does not emerge from the recession. We need a State which conducts budgetary and monetary policy together but which also opens its action to the coordination of exchange rates, and of trade and investment exchanges, with other nations on the international market. We need a government. And also in this case, the South, Italy and Europe are on the same ground: we need a state and we need a government. Things that are not there both in Italy and in Europe. While in the South there are regions in trouble and a federalism that it is not clear how, and if, it can compensate for all the imbalances we have just mentioned.
