Italy is on the brink of the abyss. The worst thing for our government would be to overcome inaction with a new series of smoky and not very credible measures. In short, after the two summer decrees that have not convinced anyone, a third flop would be detrimental to the fate of the country.
“From what they say – says prof. Nicola Rossi, elected in the Democratic Party, now passed to the mixed group and exponent of the Italia Futura movement of Luca Cordero di Montezemolo - the Government would simply like to anticipate the fiscal and welfare delegation maneuver, without realizing that those measures are already incorporated in the August maneuver and the 20 billion it should yield have already been counted. It would therefore not be new for the markets. We must realize that in recent days the Government has been disheartened by the country, not only by Italian and foreign savers, who have sold Italian debt securities with both hands, but also by business associations who confirmed again yesterday that a real change is needed in political action or, failing that, it is time for the Government to leave the field to those who can make a real change of pace”.
There is talk of many measures, of reforms necessary to change the face of the Italian economy and to regain the confidence of the markets. Where would you start from?
“The real priority is that – replies Rossi – of reducing the need to resort to the market for the issue of public bonds. Next year, between renewals of maturing securities and new issues, we will need around 400 billion euros. To avoid resorting to the market, the only system is to launch a major plan for the disposal of public assets of both the state and local authorities, both real estate and securities. It is necessary to put on the market, with appropriate technical solutions, the Post Office, some Rai networks, the Milan-Genoa motorway and so on. A couple of hundreds of billions must be made immediately which, together with other drastic savings from current expenses, could be sufficient to eliminate for a while the need for the Treasury to resort to the market to place public debt securities”.
But there are other measures to be taken in order to try to relaunch development a bit, without which the markets will not be convinced of Italy's ability to repay its debt.
“Yes, and these are things that have already been known and discussed for years. For pensions, it is necessary to eliminate seniority, lengthen the retirement age and accelerate the transition to contributory for all. These are things that were already known 15 years ago. The only difference is that Cofferati was against it then and Bossi is against it today. Then we need to remove public contributions to companies which have so much proven that they do not encourage investment at all. This is at least 5 billion which, however, should not be placed in the cauldron of public expenditure, but should be used, for example, to reduce IRAP by removing the cost of labor from calculating the tax base. The simplifications are correct but then, once decided, it is necessary to verify that they are truly applied and that the new rules are not simply thwarted by the old habits of the bureaucracy".
But perhaps a capital or forced loan could be useful to definitively reduce the public debt and thus give a boost to the markets which at that point would rush to buy the Italian securities that have become scarce.
“On assets, we need to understand each other. The extraordinary one, of a few hundred billion, I consider impossible and economically wrong. In any case, I think it's really unfair to still ask citizens for something, if they don't first demonstrate that they have truly sold public goods and reduced state spending. The compulsory loan can be studied, but in any case it is a measure that comes after those that concern the public sector. If instead we speak of ordinary assets, then we are faced with a change in the method of tax collection, i.e. a shift in the tax burden from income to assets, which certainly makes sense but which therefore must compensate for the tax burden that it weighs too much on the workers and certainly not to further fuel public spending".
We are in an emergency, but there is the possibility of avoiding worse troubles even if the government's inaction and mistakes in recent months have in fact aggravated the crisis and made the way out more expensive.
“Of course, there is now a very evident lack of credibility of this Government which no longer has the trust of either the European Chancelleries or the markets. There is now a potentially large majority in Parliament to form an emergency government that can shelter Italy from the storm that is sweeping Europe due to the Greek choice to hold a referendum on the bailout plan developed at the week's summit last. Above all, we need a government that can give guarantees in terms of fairness in the distribution of sacrifices. Something must be asked of everyone, based on their ability to contribute to the general recovery”.
Lastly, there is the mystery of Economy Minister Tremonti, who does not seem to share the policy of the government to which he belongs, without however proposing a different path.
"From what I can understand - concludes Nicola Rossi - Tremonti, who in recent months has lost a lot of enamel and who in the midst of this crisis, instead of staying in the ministry to study the problems, goes to the Pumpkin Festival, insists that Berlusconi decide to leave the scene. In short, he wants to leave, not alone, but with the whole government ”.
