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Wed, 11 Dec 2019 13:41 GMT

In Italy, Financial Policy Favours Few and Neglects Development


Roberto Tumbarello

Wed, 03 Oct 2018 14:31 GMT

President Mattarella continues to call on the Italian government to keep the public finances strong and in order, as an indispensable condition for social security. "Think of the young people", says the Head of State, "who will have to pay the debts we accumulate". But the government just keeps on with its policies without listening to him, in order to satisfy an electorate still waiting on promises made during the election campaign.

Which is why, to deliver a promised monthly benefit of 780 euros a month to five million poor people, and to allow Italians to retire at 62, the Budget is expected to increase national debt by 2.4%. Neglecting investment, the fight against corruption, tax evasion and the mafias, all of which suck hundreds of billions out of the nation’s coffers. The increase in debt serves only as a vast charity, without incentives for growth or investment.

Europe has also called for compliance with Community agreements. "I don’t care about the EU", is Interior Minister Matteo Salvini's politically not very correct - and dangerous - response. In fact he ignores agreements, arguing that Italy is a sovereign country free to decide its own economic policy. But Italian national debt is very high at more than two thousand billion Euros, and affects the economy of other countries. The spread has risen to 300; we are not therefore free to act as we please.

Salvini chooses to forget that Italy is part of a community – the EU – made up of 28 countries, 19 of which share the same currency and therefore the same interests. If every country chose not to respect agreements, society would suffer - which seems to be precisely the intention of the Northern League leader with his clear ambition to leave the single currency and return to the lira.

People applaud because they do not realize the misfortune that would befall Italy in the event of exit from Europe and the providential currency of the euro. Returning to the lira would mean a swirling increase in inflation, burdened as we are by hundreds of billions from widespread corruption, tax evasion and crime. Fortunately, the euro has allowed us to share the burden with 18 other countries.

"This is the first budget law that, instead of giving money to banks, gives to those who need it", says the leader of the Five Star Movement (M5S) Luigi Di Maio. But the government’s Minister of Economy talked of a debt increase limited to 1.6% before he was overruled by the two party leaders and forced to increase the debt. He remains in his post because Mattarella and the President of the European Bank Mario Draghi are both desperate to avoid him being replaced by a Eurosceptic minister.

The League and M5S say theirs is a government of the people. But Ferruccio de Bortoli, former director of Corriere della Sera and Sole24Ore comments that it will be the people who will pay for the consequences of the budget. In fact, with the increase in debt, which will probably exceed the 2.4% announced, borrowing costs for families and companies will rise while employment and the value of Italian savings will decrease.

They call themselves the government of change. But everybody expected to see a drastic cut in waste and a more severe fight against tax evasion, which stands at around 130 billion a year - while taxpayers in Sweden pay € 4 billion more than they should. Instead, we continue with amnesties - renamed "fiscal peace" - which reward those who do not pay taxes because they know that sooner or later they will get away with a minimal contribution.

There is no reference in the proposed financial law to investment projects or even initiatives that encourage foreign investment, which has fallen by 55 billion in recent months. There are no plans for the reconstruction and safety of schools, 30% of which are dilapidated, or for addressing the hydrogeological problems of Italy, which at the first sign of serious rainfall can lead to landslides, damage and even loss of life. The disaster of the motorway bridge at Genoa provides a suitable image for a country that is falling apart.

This government believes that the markets are enemies of Italy because they are in the hands of those who do not agree with the policies of Salvini and Di Maio. In reality, they are groups of savers who invest in safe countries and look for advantageous situations. Europe is not a monster opposed to Italy, even if it certainly needs reform of its old structures and rules of governance - but not efforts to break it.

The European Union has guaranteed us peace for 73 years and if only for this achievement it must be respected. Neither those of the League nor the M5S have the vaguest idea of ​​the devastation and grief that collapse of the EU could bring. War stories, essays and films can give only a pale idea of ​​what Europe experienced before it was united. Every twenty years there was war, whose prelude was arrogance and presumption. Just like today. 

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