Il testo integrale della mia lettera al Financial Times pubblicato oggi in forma ridotta.
The full text of todays’ letter to the Financial Times, reduced for space reasons.
http://on.ft.com/1ohJuEl (for subscribers only, solo per abbonati)
Sir, Europe has managed to avoid a disastrous break-up of the euro. By doing so it has been able to remain a critical player in today’s global geopolitics, where size matters if you want to sit at the decision-makers’ table, rather than being on the menu.
“Whatever it takes” has been the key symbolic statement that German and other political authorities allowed Mr Draghi to make in order to save Greece, and in the process abate market fears, sovereign borrowers’ cost of funding and pressure on taxpayers’ money.
However daring, Europe’s actions have not represented so far a sufficient condition for a recovery, which would have also helped in stabilizing the expectations for a solid world economic growth. Indeed, Europe is now facing the risk of a “Japanese” syndrome of prolonged stagnation and deflation. Markets condemn such situation by pricing government bonds in the euro area at highly different real spreads, even if nominal ones remain stable, a symptom of the resilient fear that sovereign borrowers will not fulfill their repayment obligations with their scarcer and scarcer resources.
Positive expectations are lacking across Europe, leaving private internal demand timid or regressing. The European Central Bank’s and European Commission’s support for ailing economies on the condition of further fiscal consolidation and long-term reforms explains why neither unconventional monetary policy announcements nor the declaration of pan-European investment programs really weaken the grip of pessimism on expectations.
It is therefore time for a new symbolic political announcement, one that will indicate a major shift in European economic policy: we suggest “wherever it aches”. Wherever, that is, a country of the euro-area is in pain as it faces harsh conditions for its employment and business conditions, European policy-makers will intervene. Their actions will consist of creating the conditions to allow the ECB to achieve its two per cent inflation mandate, and allowing for a decision to relent with the pressure of the Fiscal Compact through a moratorium on fiscal retrenchment so as to give oxygen instead of morphine to a patient still on the operating table. It is indeed hard to justify today, based on plain and simple economic theories, why Italy, in what is likely to become its record third consecutive year of a recession, should raise its primary surplus in 2015 and 2016 by a staggering 1.6% of GDP.
But more must be done while waiting for our European leaders to show some sense of direction and daring. A full debate on what is Europe and what is its purpose for the next generations needs to surround our daily lives. Too great a portion of the current European architecture has been accepted so far without the full involvement of citizens, in what has been aptly called, many years ago, “le débat interdit”: the term is unfortunately still informative today of the democratic gap within the continent.
The United Kingdom has shown the way by indicating the relevance of popular consultations on such critical matters. A month ago, a Committee of Italian lawyers and economists, which I chair, deposited four queries at the Italian Cassation Court, to be voted on in a national referendum, that would amend the Italian Law that transposes the “fiscal compact” into national legislation. To proceed with a vote in the spring of 2015, 500,000 signatures are needed by the end of September, together with the subsequent consent of the Italian Supreme Court. We hope our initiative will allow a greater halo of democracy to shine over a construction whose long-term sustainability we wish to strengthen.
The Fiscal Compact is an automatic pilot that during a storm needs to be de-blocked to avoid a crash against the mountain. This does not mean we do not recognize the need of the Italian economy to be reformed: an able pilot is needed to lead the plane to a safe landing and repair the plane from its structural defects and the damages from the storm. That skillfulness in removing the several illnesses that condemn Italy to a future of despair is what we need, starting with a spending review “British-style” that can generate the resources to fund a very much needed plan of pro-growth public investments without additional debt.
University of Rome Tor Vergata, Italy
The writer is chairman of the Referendum Committee against the law that transposes the fiscal compact into Italian legislation