In the debate opened by FIRSTonline on article 18 we receive and gladly publish a letter from the economist Giorgio La Malfa in response to the last speech by Ernesto Auci:
“Dear Auci,
I would like to make some comments on your article, which I found very interesting.
The first is that we are finally beginning to understand, albeit with great delay, that in order to tackle the serious depression crisis affecting the countries of the euro area and Italy in particular, we need to operate on the side of aggregate demand. When this is the problem, the so-called reforms that people talk about and you yourself talk about are generally useful: the reform of justice, that of public administration, that of schools and so on. But they are not decisive, also because they take time to be effective, while we need a strong and immediate stimulus.
There are other reforms, however, which may be important, but which at the moment risk being counterproductive. Among these is the reform of the labor market. The urgency of labor market reforms stems from the diagnosis that it is the rigidities of the labor supply that cause unemployment. But Draghi himself effectively argued that today the problem is demand, not supply. So it's wrong, at least right now, to push the accelerator in this direction.
I perfectly understand the all-political reasons that push the prime minister, Matteo Renzi, to propose the subject of article 18: he wants to complete the transformation of the soul of his party. But, in fact, these are political reasons that have to do with the renewal of his party, not with the economic problems of Italy today. If implemented now, they are bound to aggravate the country's already difficult economic conditions.
I heard the Minister of Labor say that we have to do like in England, where people are made free on Fridays and have another job the following Monday. But Italy does not have full employment, it has structural unemployment at least in the South of 20%. What does it mean to leave companies free to fire? Can the State guarantee an income to the unemployed? Obviously not. So, if we continue down this path, we are aggravating all our problems, including those of public finances.
I understand that having suffered reckless pressure from Europe, Germany and even the ECB for so many years, it is very difficult to answer that they were pushing us in the wrong direction and that the path to follow is another. And I also understand that, having started the battle within his party, Renzi doesn't know how to change his approach.
The consequence is that while we should open a polemical discourse towards Germany, as everyone understands by now, we leave them the opportunity to answer that it is we who admit the priority of labor market reforms. And therefore, if Renzi dared to open up the subject of German politics, he would and will be told that he himself made a different diagnosis of the Italian problem and that therefore, before giving lessons to others, he would do what he declared to be necessary for the Italy. We're not there at all."
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