In the end Berlusconi made the right decision. Indicating Ignazio Visco as Governor of the Bank of Italy ensures the safeguarding of the institution's autonomy, even if the methods through which this indication was reached have opened a further wound in our institutional system, causing a loss of credibility and therefore trust on the part of many international circles in our political system. It is to be hoped now that this appointment will not lead to further strains at the top of the Bank and that the general manager Saccomanni, reluctantly placed in the political meat grinder, wants to ensure for a suitable period that continuity which would help consolidate the institution's image , especially with respect to all foreign interlocutors.
However, it is to be hoped that Berlusconi's choice is not only due to the need to overcome the tangle of crossed vetoes into which he had gotten himself due to his own uncertainties, but arises from a convinced adherence to the theses put forward by Ignazio Visco on the methods through which it is possible to pursue a lasting consolidation of the public budget together with a more sustained development of our economy. It would be nice if Berlusconi had convinced himself of the opportunity to have a man like Visco at the top of the Bank of Italy, reading the speech made by the latter on August 30 in front of the Budget and Finance commissions of the Chamber and the Senate. In fact, in that hearing, Visco lucidly described the maneuvers that should be implemented in a short time to make the goal of zeroing the deficit in 2013 credible. These are not easy measures to adopt, but neither are they things beyond our reach and, if well calibrated, can lead not only to higher growth but also to better social equity.
Firstly, even if he doesn't say it explicitly, Visco overcomes the sickly controversy of recent weeks on the so-called "zero cost" of the development decree. In fact, what many deputies of the majority are saying, namely that in order to achieve development it is necessary for the State to spend a little money and therefore Tremonti must widen the purse strings, is something that is not only impossible given the situation of our finances public, but even counterproductive. Growth can no longer be achieved through a further enlargement of the intermediation of resources by the political system which only produces inefficiencies and therefore waste, but passes through a reduction and rationalization of the institutional apparatuses and bureaucratic derivations. In fact, Visco recommends the abolition of the Provinces, the unification of entities that perform similar functions, the concentration of the bureaucratic presence in the area, the adoption of standard costs, etc., in short, a decisive policy of spending cuts to be made through the adoption of the spending review technique, i.e. going to see in all administrations what is useful to continue to do and what instead must be totally abolished.
In short, politicians must not ask Tremonti for more money to spend, perhaps in a discretionary manner, but must reduce their grip on resources, leaving more room for private initiative and the market, certainly strengthening, when necessary, the regulatory and check.
Then there are many other actions that Visco accurately lists to regain competitiveness. These range from the completion of the pension reform to the rationalization of health expenditure by dedicating part of the resources thus recovered to supporting female and youth work. As regards the creation of more favorable conditions for the growth of enterprises, in addition to the reduction of administrative burdens deriving from the reorganization of public apparatuses, Visco explicitly mentions the need to reduce the social burdens weighing on workers and companies, estimating that this maneuver would lead in the three-year period to an increase in GDP of 0,3-0,4 percentage points. It should be financed with the reduction of contributions to the single family allowance fund which shows assets of 7 billion euros and/or with a tightening of property taxes which in Italy are lower than in other countries. It is not a real property tax, but it is something similar to what was proposed by the representatives of the employers' associations, to which, however, the Government has not even deigned to respond.
Visco then recalls the measures aimed at increasing the investments of the concessionaires through the removal of the administrative obstacles, which hinder their operations, and the need to spend well the community funds which have currently only been used for 15% and which are still available for 23 billion euros. It also reconfirms the need to sell public assets, especially companies owned by local authorities, so as to include more market and more competition in these sectors as well, as well as raise cash or cut the resources that today go to cover deficits.
The one presented by Visco to the deputies and senators is a complete plan which, without prejudice to the consolidation of the public finances, can give that "boost" to the Italian system so often promised but never implemented. Today, the urgency of the recovery has meant that the weight of the maneuver hangs for more than 60% on the side of higher taxes. This situation needs to be rebalanced by pressing more on spending cuts. Many of the measures to boost development will have effects spread over time. But that's not a reason not to do them. Deciding to adopt these measures and relying on their implementation would improve trust in us and the expectations of financial operators, leading to a lowering of interest rates on our public debt and therefore on bank collection, making it easier and less expensive business credit.
The things to do are many and interconnected. But it is not a question of "tears and blood" maneuvers, at least no more than what the Government is doing now with the tax burden pushed beyond 45% of GDP, a peak never reached before. Let's just hope that Berlusconi, before proposing the appointment of Visco, has meditated on his recipes for getting out of the crisis and has convinced himself to get out of the paralysis and take the bull of the crisis in the right direction.
