Economy Minister Giovanni Tria certainly has nerves of steel. He doesn't get upset in the face of the direct or indirect attacks that come to him every day from the two dioscuri of the majority or from their parliamentary bagmen. He remains convinced that in the end he will be able to contain the deficit within acceptable limits and in any case such as to give a clear signal to the markets on the continuation of the downward trajectory of the debt.
As always, when the budget law has to be passed, the political controversy becomes heated. But this year we reach paroxysmal tones and above all the discussions on hot topics (pensions, income support for the poorest, tax cuts) are engulfed with unrealistic and profoundly contradictory proposals. Eventually the uncertainty mounts and, despite Tria's Olympian tranquility, both financial and industrial investors remain cautious. Interest rate spreads seem to stabilize around 230-240 basis points compared to Germany, but do not seem to tend to recover the levels prior to the birth of this government, when they were around 120 points.
To find the key to all this confused chatter (which, as Mario Draghi said, costs Italian citizens) we need to put a firm point starting from which to develop all the reasoning on the various measures: that is, we need to start from growth and what can be done to speed it up. In a stagnant economy there is no work, poverty is destined to increase (and there is no subsidy that will suffice), young people who do nothing, do not study and do not work who are already almost 40% in many regions of the South, are destined to increase also in other regions.
Minister Tria is well aware that we are starting from a very dangerous economic slowdown, so much so that our growth this year it could be close to 1% versus 1,5% previously estimated. Industrial production is declining and orders from abroad are also decreasing. Private investment has stopped because entrepreneurs do not understand in which direction this government intends to move.
What are the appropriate measures to restart growth? According to Tria it is public investment. And on this, everyone is in agreement. But then Di Maio insists on having the citizen's income and pension, while Salvini insists on effectively restoring the infamous retirement pensions that have brought our pension system to the brink of collapse in the past. And what's more, these interventions are expected to be made in deficit, ie by increasing our public debt, with the idea of a proficient Keynesian that within two or three years the greatest development could repay the debt. This has never happened in the past. And for that matter with the debt we have accumulated we should have grown at a dizzying pace, while we have been almost at a standstill for over twenty years!!
In an interview of 7 July with the economist Giampaolo Galli, published by this newspaper, it was argued that the most revolutionary thing that this government could do was to bring the spread to the levels of Spain, i.e. below 100 points or even aim for 40 points of France which is certainly not much better than us from the point of view of economic fundamentals (apart from the debt). Perhaps not many readers have considered that two points less spread (that is, at the levels of France) would mean savings for our state budget of no less than 8 billion in the first year, which would double in the second and triple the third. And then we would have the resources to manage unemployment and to encourage investment! And this without considering the benefit of the reduction in interest rates that would be transferred to the production system and consumer credit.
But the demagoguery rages. On pensions, on the one hand it is proposed to penalize the so-called “golden pensions” , those above 4.550 euros, based on the time of retirement compared to normal old age which, beyond other absurdities, would especially penalize retirees from the North who have often been pushed by companies to retire early for reasons of restructuring. And this while Salvini himself proposes a quota of 100 with an age limit of 62 years. Old retirees would be penalized if they retired before the age of 65 or 66, while new ones could retire at 62. What logic is this?
Di Maio, not to be outdone in terms of contradictions, on the one hand proposes the citizen's income conceived as an introduction to work, while on the other he restores the extraordinary redundancy fund for bankrupt companies by blowing up the concept of mobility that already exists and that the basic income would like to make universal.
Then there are many other declarations which, if translated into measures, would not be a stimulus but a brake on growth. Distrust of the market and private individuals (considered corrupt or corrupting), the desire to nationalize Autostrade, Alitalia, etc. and to restore stricter public control also over the companies that have gone on the market in recent years and have attracted thousands of Italian and foreign investors.
Finally, public investment. Minister Tria discovered that there is a fund already financed for at least 15 billion a year which could be spent immediately. If this does not happen, it is the fault of procurement legislation and bureaucratic obstacles in general. But also because of political obstacles given that, for example, on many major works it is precisely the 5 Stars who oppose it for the most varied reasons. As happened for the Rome Olympics and now for Turin which will no longer be part of the trident with Milan and Cortina. Is Minister Toninelli aware of this?
What the governing parties call "reforms" are nothing more than increases in current spending on pensions or benefits and, at best, tax cuts. The term reforms is therefore abused because it is a question of continuing on the usual path of raining gifts, indeed, at least in intentions, increasing its intensity. But this type of expenditure, as we have seen in the past, does not make development. If our competitiveness does not grow, people will be able to easily buy foreign products, perhaps Chinese.
What is being asked of Tria is an enormous effort. It's not just a matter of resisting pressure, but also of doing an educational job to explain that the priority must be growth. That in order to obtain it, it is necessary to concentrate resources on investments and make truly incisive reforms to improve the efficiency of the markets and of the public sector, starting with Justice. But this is not talked about. Preliminary is to lower spreads and interest rates. Tria said it, but maybe it needs to be shouted louder.
