Are we at the Chicken Game between European nations? If Barbara Spinelli asks, evoking the mythical challenge between the two cars, which race against each other, in Gioventù Bruciata, a film on the bullying excesses of small-town America. Who will be the chicken that withdraws from the competition out of fear, implicitly accepting its defeat: Monti or Merkel? We prefer it Alesina's more calm response: “These days Europe is in danger of losing something far more important than the single currency: economic cooperation, if not even peaceful political cooperation. The anti-German rancor that reigns in Southern Europe and in France is very dangerous, cloying and largely unfounded”.
But Alesina's five subsequent considerations, although necessary, are not yet sufficient to outline a reliable result of the European summit. A result that must offer a reasonable basis for supporting the exit of the European economy from its crisis and the new political convergence that can govern the ways and times of that exit. The Germans, says Alesina, are accused of five faults that they do not have: have not been more generous with Greece and other countries in difficulty; they got rich with exports to Mediterranean countries; they took advantage of a "low" euro compared to the level of a hypothetical mark; they should consume more, another chimera; finally, the German banks are seriously to blame, those that have thrown themselves into the chaos of the American subprime. But many mistakes have also been made by Spanish, Greek, Irish and French banks.
Alesina is right in his defense of the Germans, because he believes that they really used the euro as a shield: a defense, protected by which, they undertook to reorganize the productivity regime of their real economy with vigorous reforms, capable of reordering work processes and system productivity of their country. Many countries of Latin Europe, which today are in difficulty with their public finances, have given up on any attempt to reorganize their real economy and increase the productivity of the system, reorganizing the public administration and the infrastructure system. The single currency, the euro, was a useful shield for them too, because it lowered the level of interest rates and made it possible to progressively increase the level of public debt with growing deficits. If these deficits, however, had generated investments - to rationalize the public administration, increase the research capacity of schools and universities, improve health care and the judiciary, expand the broadband network and more - then even the "bad" countries Latinos would have achieved the results of exports and growth that Germany has achieved.
Therefore the problem is not the deficit, which becomes public debt and remains tax deferred over time, but it is the inability to invest and manage growth, increasing the average productivity of the system. The problem is real and debt is needed to finance growth, when it is evidently capable of managing it. If you reject debt as such, you also lose the opportunity for growth. Because it is precisely the debt leverage that fuels the acceleration of growth: because debt, if well spent, is the entrance ticket to a better future.
Mario Monti partially recognized this as a positive fact, reminding the Chamber of Deputies that "productive public investments are an ancient theoretical conviction of mine". Antonella Rampino sends him back to Keynes, a liberal who was not a liberal, but in Monti's accent we hear the echo of Adamo Smith who wrote, precisely, in the pages of The Wealth of Nations, how public works were system infrastructures: in short, he looked at them from the supply side and not the effective demand side. Indeed, Monti also reminded Parliament of his letter to the Commission and the Council of Europe signed by Cameron and many other heads of state and government. Probably the most significant gesture, symbolic but also of content, that he has made in the direction and support of growth. But a gesture that remains in the perspective of an opening to the opportunities of globalization, which creates new markets and new technological solutions and which, by increasing competition, compresses the inflation spring in this way. But not yet that of growth.
Now we are the day after the meeting of the quadrilateral: Germany and France on one side, Italy and Spain on the other. The axis, which has governed Europe, is the first of the two pairs but Italy is certainly the first among the Latin countries while Spain remains second. Therefore, without prejudice to Alesina's criterion, The Germans are not bad but a large part of the other European peoples are clumsy. But we must also understand what went wrong in the ambitious and fragile construction of Europe and its single currency: orphan of a real central bank. Because, if that construction had been really reliable, then we wouldn't be reduced as we are, despite the American crisis. And what didn't work is just having overlooked Keynes' lesson: the perception of money as a social relationship and not as an intrinsic value, the belief that the basis of growth is not savings that become investments but an expense, intelligent, which expands the dimension of income and creates new resources, which can cover the debt that spending has made possible. By expanding the money supply available in times of recession, even if liquidity remains stagnant, which is only the other side of unemployment.
What should they say, and then realize, the political groups that lead Europe, then, in the summit that begins today? Don't peck at each other like Renzo's chickens; do not catch each other between Europeans and Americans, in the hope of always finding the blame for the crisis in other people's homes. Today the United States and Europe must stand united, at the center of the center of the world, and not oppose each other to accuse each other of the faults of others. But it would be interesting that the spirit of growth and magic, which transforms debt into investments capable of repaying it, a Keynesian breeze and not just a liberal one, can help the reconstruction of a Europe capable of leading banks and public finances towards a solution other than divorce between state power and the government of the money supply. Una banking supervision deferred to the ECB, like when Einaudi brought to the Bank of Italy the inspectorate and supervision of Italian banks, and a Salva Stati Stati (Save States Fund) which could subscribe, in issue, quotas of new sovereign debt by the States, and a sale of real assets, that reduces the stock of public debts without increasing the tax burden to generate primary surpluses, would all be good news and clear signs of this Keynesian zephyr. In short, it is necessary that the things that will be announced are clearly perceivable as a different and other path compared to the one that gave rise to the euro in the twelve years behind us. If the markets perceive this diversity, they will come to terms with it and leave governments free to work for change.
