Monti’s conditions to say yes to the government (and damage Italy for the second time)
Senator for life, Mario Monti, unveils the European Union's programs for our country and there is no good news. The comment by Giuseppe Liturri
When he speaks, the professor and senator for life Mario Monti does it not only for himself, but he is also a bearer of messages from those who, between Berlin, Frankfurt and Brussels, hold the ranks of the EU. And then it is worth commenting on the salient passages. The professor gives us a guided tour of the gallery of horrors we have traveled so far (especially under his guidance), with a broad view of the war path that awaits us.
The beginning is a whole program:
Italy is at war. He has a command and allies. A very difficult post-war period awaits her, no one knows when, since she had already entered the war in conditions of chronic weakness. In this theater, what is Italy doing? The government and the majority (the command) fall apart.
The logic underlying this unfortunate similarity is astonishing. Perhaps the senator misses the difference between a military hierarchy and a democracy. It seems that the basic axiom is that during a period of difficulty it is not possible to exercise democratic rights and that the scrutiny on the work of the government must be suspended precisely at the moment when there is most need to check its effectiveness and eventually replace those who are not capable. All served in livery and white gloves, as if nothing had happened.
The European Union and its member states had never (never in history, one could say going back over the centuries) allies of Italy with as much support and generosity as in this common war on the pandemic.
What aid is the Senator talking about? Are you talking about the billions of the ESM, available upon declaration of pre-bankruptcy status of the requesting country, with potential subjecting to a “Greek-style” macroeconomic adjustment program, in progress? Or he talks again about the billions of the Recovery Fund, for which the Regulation has not yet been approved and which perhaps we will see at the end of 2021, and whose potential for additional growth, once we have been forced to meet the public budget constraints dictated by the Stability Pact, will it be canceled, if not with a negative balance? Or does it talk about the billions of the Sure (for layoffs) of which essential aspects are kept secret in order to determine its convenience?
But for some days they have been wondering if Italy, for which they cried like us seeing those military trucks with the coffins in Bergamo, has not returned to being, despite the tragedy of this war, a semi-serious and not entirely reliable country.
Here, the ancient oratory expedient of the motion of the affections could spare us. As well as the, frankly unacceptable and threadbare, cliché, steeped in self-racism, of a "semi-serious and not entirely reliable" country. And what would the serious countries be? Germany? With Siemens , Wirecard and Deutsche Bank , involved in various ways in international scandals, of which there is almost never a trace in the Italian press and in comparison with which the Italians pass as chicken thieves? I would also say enough.
The doubt that arises in Europe is whether Italy is able to stay in the EU as a normal country. When the EU, as is right in normal times, asks each state to contain the public deficit and does not finance it by creating a European currency, many in Italy scream against "austerity". On the other hand, when the EU, in exceptional times of pandemic, gives enormous European resources to States, more than all to Italy, our country seems dazzled by sudden wealth, it lingers in political crises in which the country's interest is at its peak a fig leaf.
Here there is understanding for the professor. He must defend the work of his experience of government as "normal", as opposed to the exceptional nature of the present moment. No, these solutions are normal and it took the Covid emergency to bring down castles of lies built with impunity for years. In the past, asattested by the OECD and other leading economists , we have been unfairly harmed. Today there is no "sudden wealth". Only unsustainable dogmas have fallen.
If what happened now in Italy had happened a few years ago, before the ECB and other central banks introduced ultra-accommodative monetary policies that blur the perception of underlying imbalances by delaying their resolution, what would have happened? The spread would have shot up to levels that frighten public opinion and politicians, the crisis probably would not have opened or would have been resolved in a couple of days, with the recovery of the sense of reality and perhaps with a government of national unity to deal with. quickly the real problems of the country: in this phase, above all the lack of growth, while only two things are growing, serious inequalities and public debt.
Nostalgia, huh? Good times when the markets held us steady with the spread at 500 and in Parliament they passed in rapid succession, under his government: the regulations of the six pack, the balance of the budget in Article 81 of the Constitution, the Treaty on Fiscal Compact, the ESM founding Treaty, the two pack Regulations. Beautiful times of the "HAPPY" in large letters in the Sole 24 Ore!
Speaking of the latter, I expect the government to better explain to the Italians that today there are exceptional reasons for not caring too much about the increase in debt, but that probably before the end of this legislature – that is, before the government that ends. perhaps it will see the light in the next few days – some things will change in the EU: in some form, we hope more correct than the previous one from an economic point of view, a discipline of public deficits and debts will be reintroduced, and we more than others will arrive at that appointment later the surge in recent years; moreover, the "strategic review" of the ECB policy, which Christine Lagarde has initiated, will hardly allow for long reliance on the possibility of financing the Italian deficit at zero cost.
It is always good to hear the truth. It seems that we can ignore the increase in debt, albeit under the fig leaf of "exceptional reasons". Were not the reasons that advised not to condemn Italy to a second recession between the end of 2011 and the beginning of 2014 worthy of attention? It seems so much "Cicero pro domo sua". There is also the announcement of the return of the EU to the old path. This with all due respect to those in Italy who are under the illusion that a mythological next Conference for Europe will reform the Stability Pact. The reform is ready and will condemn us to a decade of primary government budget surpluses, otherwise we won't see a cent from the Recovery Fund. Monti also announces the return of the ECB to the ranks and this remains to be seen. Not even the Fed in the US was able to re-enter the government bond purchase program. At most, it will be possible to stop additional purchases, as already happened in 2019, but the renewal of the expiring securities could take a very long time.
It therefore becomes important to ask urgently the question of how much sense it makes to continue to "restore" with debt, that is at the expense of the Italians of tomorrow, the losses suffered due to the lockdown, when for many activities it would be better for the State to favor restructuring or closure, with the necessary social accompaniment, to allocate resources to activities that will develop, instead of those that unfortunately will not have a tomorrow.
Here we are at Zenit. Since debt is not good (but then only Recovery Fund loans are okay?), Then it is better to accompany a few thousand hotels, restaurants, cultural and recreational activities with all the related activities towards a sweet death, right senator? What is this economic Darwinism that we would not have imagined even in the worst of nightmares? What are the "activities that will develop"? Serfdom? Have you ever seen a doctor decide that the injured caused by the fall of an asteroid (because Covid is an exogenous event of a similar nature) should not deserve treatment, because we would be in debt?
(Conte) You explain that the search for electoral consensus at all costs was the main cause of Italy's decline, because this is what it is now about.
We had no doubts about the poor consideration given by the senator towards the electoral outcome, the natural premise of a democratic system. He prefers the government of the Optimates, it is known.
(Conte) Say that the government will start some public debates within a month, which the government itself will lead in an open and transparent way, with hearings of experts and interest representatives, and that it will conclude with decisions within six months, on the following issues:
– Tax reform, with adequate space for simplifications, a tax "friendly but not too much" towards taxpayers, the need to safeguard competitiveness; but also, without prejudice in any direction, to issues that only in Italy are considered taboo, issues that all parties, fearful, do not even dare to pronounce: ordinary tax on assets, inheritance tax, taxation on real estate and updating the cadastre, taxation at work, etc. We could use, as a starting point, the parliamentary hearings held recently, in particular the one – meticulously non-subversive, but which has no taboos – by Giacomo Ricotti of the Bank of Italy (11 January 2021 ).
Here is the warpath for the next few years. Exactly the one envisaged in the 2019 country recommendations of the EU Commission and well detailed in the aforementioned Bank of Italy study. Shifting of taxation from work to other sources of income, with the essential clarification of the Bank of Italy that " The need not to jeopardize the sustainability of public accounts requires that, if the recomposition of revenues resulting from the reform involves a loss of revenue, this will be compensated with appropriate measures to reduce costs ". The tax burden cannot change and, should it happen, spending cuts should be made. That is, to go back to cutting health care costs, preventing the modernization of the public administration, etc … All the good things that the EU is now asking us to do with the Recovery Fund loans. But does Monti know (rhetorical question) that the tax base sources he refers to often do not produce income? Do you know that those assets are only attackable to the detriment of those who have not carefully hidden those assets behind the screen of foreign corporate structures? Does it intend to withdraw sums from current accounts again or take another 20 billion by doubling the IMU revenue or increasing the stamp duty on financial assets? Do you know that such an operation will lead us back into recession, as well as putting a cross over what remains of the middle class in our country?
– How to increase competition and curb position rents. Thanks also to the European Commission and the activity of the Antitrust Authority over time, many nodes should be identified on which to intervene, to eliminate real "hidden taxes" that are not very competitive markets or public regulations to protect rentiers they place a burden on consumers and users of public services.
But does Monti really believe that increasing the number of notaries or pharmacies contributes to the growth of the country? But do you know that there is fierce competition, the result of an excess of supply, which has already sent us almost into deflation in recent months? What still remains to be liberalized?
To these exercises of civil awareness, which would not expropriate the government and Parliament at all of the power of decision, but would stimulate them and perhaps improve the quality of decisions, the government should also invite the opposition, to also engage in dialogue with them on the reality of things, instead of often empty disputes in which two different ways of not deciding are often opposed.
If Conte will be able to speak the language of truth and will clearly say where we all risk going if everyone aims only at protecting partisan interests even when they are legitimate, I think he will inspire greater trust in citizens. And maybe even in Parliament.
We thank Senator Mario Monti for the extreme accuracy with which he illustrated the forthcoming macroeconomic adjustment program reserved for us by the European Union.
Now it is up to the Italians and the political forces to do exactly the opposite. The path is traced. If in 1917, in the middle of the war and with the troops withdrawn on the Piave after the defeat of Caporetto, Armando Diaz had not replaced Luigi Cadorna, we would have become an Austro-Hungarian protectorate. The risk is the same, if not worse.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/le-condizioni-di-monti-per-dire-si-al-governo-e-danneggiare-per-la-seconda-volta-litalia/ on Sun, 17 Jan 2021 18:59:54 +0000.