Because Monti’s whispered advice to the government is not convincing
What is Mario Monti wrong about the reform of the Mes and the possible ratification of Parliament. Giuseppe Liturri's analysis
We always approach with the necessary respect the ritual articulate Senator Mario Monti on Corriere della Sera ( " Italy and the sirens of Ulysses " ). Unfortunately, with equal regularity, at the end of the reading we only collect material to describe to readers some factual inaccuracies, starting with the now old topic of the reform of the Mes and its possible ratification by our Parliament.
Before dwelling on this point, we would like to point out that Monti abuses the well-known rhetorical device of refuting a counterpart's thesis, by choosing, or rather inventing, the counterpart and also the thesis attributed to it. Too easy to win like this.
Monti highlights a phantom difference between a wing of the government, led by the President Giorgia Meloni, open to dialogue and careful to " fully use the opportunities offered by belonging to the EU ", and another of which an anecdotal caricatured representation is offered from the bar, like “ beating their fists on the table”, “they want to put us down, but we're not the Italians, and we'll show them! ”.
Now, we understand the Senator's not so hidden desire to see the new government present itself in Brussels as a Brancaleone army and be forced into a disastrous defeat, but if there is one aspect on which this majority was particularly united, it is precisely that of the defensive profile that has deliberately avoided suicidal muscular displays both on the political and financial front.
A tactical attitude that can certainly be criticized by those who would have liked a harsher confrontation with the European institutions, but which allowed Meloni – taking the Allied landing in Normandy in 1944 as an example – to conquer the first hundreds of meters of Omaha beach, without being driven back to sea. The political cost has certainly been high, but we dare to hope that Meloni wanted to consider it an investment that could produce its return over a longer period of time.
So we're sorry to disagree with Senator Monti but, unfortunately for him, we don't see a bunch of clueless eager to show up in Brussels, with slippers and bucket on their heads, banging their fists on empty.
We agree on the fact that the latest decisions both on monetary policy and on fiscal policy do not have a specifically punitive aim towards Italy. In fact, even in this case, the real criticisms, not those chosen pro domo sua by Monti, concern the lack of credibility and the verbal disorder recorded on the occasion of the ECB's latest outings. They are critical regardless of the effects on our country's economy and come from numerous commentators in the international press.
The ECB has not understood the nature of the inflation that was already growing in autumn 2021, with the war not yet started and – as Professor Giovanni Tria correctly pointed out in the Sole 24 Ore on Saturday – it is not understanding anything even today. In fact, it draws up inflation scenarios subject to high uncertainty and, on the basis of these, undertakes to further increase rates for an extended period, also accepting the risk of sending the Eurozone into a recession. But the outcome of these maneuvers on inflation appears at least doubtful and therefore the final outcome could be that of having a recession and inflation together. These are the serious criticisms of the European institutions, not those set up ad hoc by Monti, to have an easy game in dismantling them.
On the Mes the rhetorical device of attributing to one's interlocutor the theses that are most convenient, choosing flower from flower, is again applied to perfection.
Monti imagines the Meloni government as a new Ulysses who, in order not to run the risk of being captivated by the sirens (i.e. asking for a loan from the Mes) chains himself to the main mast of the ship (i.e. he does not ratify the reform of the Treaty) and, with itself, it also chains the other 18 countries of the eurozone. If the goal is not to take ESM loans, there are "less Homeric ways" to do it, Monti argues.
What these methods are is not known, because it is true that ratification of the Treaty does not mean the obligation to apply for loans. But not ratifying is the only way to prevent those loans from having certain dangerous characteristics. First of all, the argument that " the Mes is out of context " relates precisely to its ratification, not to its possible use. Monti cannot fail to know (in fact, he knows it but fails to say it) that that ratification intervenes – among many changes – precisely on the conditions of access to the precautionary credit line, the one with the least burdensome conditions. The parameters to be met to access that line make it effectively unusable, because Italy (but not only) would not be able to satisfy them. Furthermore, those parameters contain the reference to the structural budget deficit, a measure destined to disappear from the rules of economic governance of the Eurozone. Therefore, in the event of any use, the very changes contained in the reform to be ratified would force us to use only the credit line on enhanced conditions. The one that provides for the macroeconomic adjustment program that countries like Portugal and Greece know well. The Lusitanians were forced to sign 1993 commitments in areas ranging from taxes and fees to the structure of public administration, to the regulation of the financial sector, to labor and competition policies.
All meticulously regulated and controlled with periodic missions that still continue today.
Is this what we want for our country? Borrowing ourselves for a few tens of billions at a rate that is only nominally lower than that of a BTP of the same duration, but which, taking into account all the ancillary costs and conditions, could prove to be much higher? What is the cost of freedom from creditor impositions?
It is precisely to avoid those impositions that ratification and possible use are intimately connected, because ratifying would be equivalent to accepting the resolution of a loan whose possible subsequent disbursement will be subject to extremely penalizing rules contained precisely in the resolution. It is true that theoretically there would be no obligation to stipulate that loan but, if it happened, the rules would be those. Then we must oppose the ratification both for its intrinsic defects and for the harmful effects that the reformed text would produce in the "desperate situation" (Monti's words) in which Italy was forced to request a loan.
We are not hiding the difficulties of a negotiating position in which Italy appears isolated. At the same time, however, we must point out that it is one of the few times that we present ourselves in Europe having negotiating power precisely when important dossiers such as that of the reform of the Stability Pact are being discussed. That ratification could be the negotiating weapon, paid for dearly, to obtain decisive counterparts on the Stability Pact.
In conclusion, tying yourself to the ship's mast (not ratifying) doesn't appear to be an exaggerated move, because we know well that it serves to avoid a song that first captivates and then makes you shipwreck on the rocks. Because Monti forgets to add that whoever has listened to the sirens then finds himself reduced to “ a pile of putrid men's bones, with wrinkling skin ” (Homer, Odyssey, XII, 39-46).
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/monti-consigli-governo-meloni/ on Mon, 19 Dec 2022 06:30:08 +0000.