03 June 2021
In one year the world has changed, the way of life of each of us has changed, of looking at the present and the future. But it has not changed or has changed much less than Europe would have expected with its liturgies and its strict rules conceived in another era.
We understood this yesterday by reading the reports of the European Commission on the state of the economies of the old continent and listening to the words of the vice-president of the same commission, the Latvian Valdis Dombrovskis. Which announced the return from 1 January 2023, therefore almost tomorrow, of all the old moldy rules of continental public finance, of the GDP deficit under 3%, of the fiscal compact that will force us to bleed to reduce the public debt that exploded with the pandemic and the era of austerity that we thought archived forever. In essence, therefore, this year we will have a very small advance of the much declaimed Next generation Eu, next year a slightly more substantial installment and as soon as we have received what it takes to lift us from the abyss into which the pandemic has plunged us we should begin to repay and cut much more than what had started to invest. A prospect that is not so terrifying as it is stupid, because it would nullify the step taken with difficulty in the last twelve months with that common program for the next generations that seemed to have made us understand the need to turn the page forever from those old rules, making permanent the new ones built with so much effort.
If this one heard yesterday is instead the perspective, then we really need to keep Mario Draghi in place today to give him as a real mission (more suited to him than the vaccination plan), that of negotiating in the meantime a suspension of the European stability pact well beyond the date that the commission imagines today, at least until the exhaustion of the Next Generation Eu. Without this decision, governing Italy would become impossible and in any case useless, because no real choice would be possible and we would be preparing for years even more complicated than those we have put behind us. Then, for charity, Ursula von der Leyen’s advice and observations on the choices made in an emergency by the Italian government can be useful and welcome, especially when they are rational. And there are some in the report on Italy released yesterday by the Commission. There is one of particular relevance, which criticizes the choice adopted on the blocking of layoffs. Which is defined as a political choice that “tends to influence the composition, but not the extent of the adjustment of the labor market.”
It is recalled – contrary to what Giuseppe Conte and then the Democratic Party argued first – that “Italy is the only Member State that has introduced a universal ban on layoffs at the beginning of the Covid 19 crisis”. And that «in practice, this measure mostly benefits the” insiders “, that is workers with permanent contracts, to the detriment of temporary workers and seasonal workers. Furthermore, a comparison with the evolution of the labor market in other Member States which have not introduced such a measure suggests that the prohibition on dismissal has not been particularly effective and has proved superfluous in view of the extensive use of job retention systems. of work”. Countries like Germany and France “have managed to contain the impact on the labor market without resorting to restrictive measures such as the absolute ban on dismissals. The prohibition on dismissal could even prove counterproductive, the longer it is in force, as it hinders the necessary adaptation of the workforce at company level ”.
According to the EU, the August Decree of last year with its decontribution on private work is also wrong: “The measure adopted by the government is not limited to particular segments of the labor market (eg young people, long-term unemployed), and applies and to the new existing employment relationships, which implies a loss of efficiency with respect to potentially more targeted measures ». The situation of Italian banks is also worrying and the scarce reduction in the belly of non-performing loans which are indeed destined to increase with a differential already worrying today compared to the EU average (it is exactly double the others), and many unknowns feed on the announced reform tax, also because the Italian government has not provided any details at the moment. The invitation has an ancient refrain but its effectiveness: to shift the tax burden from work and people to things, giving up too many reduced VAT rates. The community opinion may not be wrong that with more income in the pockets of the middle classes, an intelligently thought-out increase in VAT would not reduce Italian consumption.
Good advice, then. Provided that we can make choices, because if in the current public finance conditions Italy will only have the horizon between now and the end of 2022 and then the oxygen will suddenly be removed, no choice will be possible …