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Saturday 19 June 2021

Recommended Government crisis: "Whatever it takes"

Government crisis: "Whatever it takes"

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All of Europe has been affected by the pandemic, but not all of it in the same way.

The debt-to-GDP ratio has also worsened everywhere in Europe, but not everywhere to the same extent. Overall, it went from a ratio of 79,2% (third quarter 2019) to one of 89,9% (third quarter 2020) with an increase of 10,6%. In Italy, however, the initial situation was decidedly worse and evolved in a decidedly worse way; in fact, we went from a debt / GDP ratio of 136,8% to a ratio of 154,2% (+ 17,4%, only in Cyprus did it increase more). And this before the effects of the "second wave" in which we are still immersed unfold.

This dramatic worsening has not (yet) ignited the perverse spiral increase in debt - increase in interest rates - increase in debt because we are covered by the umbrella of the EU and the ECB which are deterrent to speculative temptations (the devastating impact of which we experienced in 2011).

But this protection is neither infinite nor unconditional. If Italy does not demonstrate that it is capable of restarting the dynamics of GDP growth and therefore of gradually reabsorbing the strong accentuation of the imbalance that has been created sooner or later, the "European umbrella" will no longer be available, or it will no longer be sufficient .

The Union has decided to allocate several substantial aid to Italy, including the Recovery Fund, so that our country has the necessary resources to sustain the impact in the most critical phase (resilience) and start investments for development (recovery) . Whatever fools may say, this choice is not a reward for our merits that we can use as we like, but an aid to remedy our mistakes that we must use according to certain rules.

The management by the President of the Council of the elaboration of the PNRR, that is the first and most important useful act to express our will and ability to resume, has been disastrous in terms of substance and method and is the main cause of the political crisis we are going through. and that certainly doesn't help. The assumption of the Plan by the Ministry of Economy and Finance prevented the situation from worsening but did not solve the problem, nor could it do so. The risk that in the coming months the financial crisis will hit a weakened socio-economic body with even more dramatic consequences is still present.

We need a government guide that has authority (internal and external), competence (effective and not boasted) and that does not have as its primary purpose the search for power and personal consent. Everyone knows that a figure that has these characteristics fortunately exists.

But it would take a truly "responsible" behavior of political forces, aimed at doing everything that is needed ("whatever it takes ")  to get Italy back and not to get a few votes back.

PS In 2012, in a flat financial crisis, the President of the ECB Mario Draghi uttered the sentence "Under its mandate, the ECB is ready to do all that is needed to preserve the euro. And believe me, it will be enough."  And in effect the financial stability of the most fragile European countries (including Italy) was safeguarded.

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