Then, with the outset of the financial crisis, a new great phase of integration has started with the establishment of the European Semesters, a new decision process involving both European and National institutions so that today policies are made jointly by Bruxelles and the national capitals.
This should help national governments in making more effective economic policies to improve their debt sustainability (represented by the debt – GDP ratio), stabilize financial markets and contribute to a progressive convergence of public finance and competitiveness. The goal should be achieved by both keeping public deficit under control and boosting the economic growth.
However, the current governance of the European Union, which is strongly under the power of national leaders in the European Council, imposed austerity measures in order to reduce deficit without thrusting productive investments in order to encourage growth. Then, several national economies fell into recession. Instead of being the solution the policy strategy adopted till today by the EU seemed to be another problematic aspect for several States, including Italy.
Now the financial crisis is partially over and for this reason, according to Mr Pesole, Italy and Europe need to substitute austerity with a common policy for growth to contain the real economic crisis. On the one hand, Italy needs structural measures to improve Italian economic conditions and to attract private investments. Entrepreneurs are claiming less bureaucracy, less taxes and more competitiveness for their enterprises. On the other hand, public investments must help the process and compensate the lack of private investments discouraged by the adverse conditions. Thus, the role of EU is crucial: it must understand the changed situation and modify the rules according to it. Maastricht parameters must be adjusted excluding productive investments from the calculation of governments deficits. This is the only way to optimize the trade-off between austerity and growth.
But, how is it possible to evaluate the productivity of an investment?
Looking at the past, Mr. Tremonti and Mr. Monti tried to make a spending review. The aim was to cut unproductive investments, but they ended up just cutting general cost elements without a proper distinction between good and bad expenditures. Can we conclude that Italy will be able to distinguish productive investments from unproductive ones?
I wish we can, but I believe that today the Italian public administration cannot. The public administration is blocked because of the absence of a real turnover of the ruling class with the same ideas and politicians of many years ago. Nowadays Italy is not able neither to correct the mistakes it did nor to act better. But something is changing. Following the outlines given by the EU, the Italian Inter-ministerial Committee for Economic Planning is adopting measures with the aim of helping politicians in the decision process by the introduction of important instruments as the cost-benefit analysis, which considers the financial, economic, social, political and fiscal implications of an expense. This kind of measures allows Italy to improve the productivity of its investment and shows it the way to grow. But this is not enough.
A new European agency should be created in order to manage European public funds and invest them if a member state doesn't use them as Italy has done for many years.
This could guarantee a correct distribution of productive investments in each State and facilitate the convergence of economies. Moreover, if austerity has been imposed to member States, why cannot we do the same for reforms? More power at the European level is needed to implement growth-oriented measures, but the health of the euro zone and the political and economic development depend also on national policy makings.
EU is Italy's chance. Italy should concentrate all the efforts on the economic and cultural growth. Within the EU's perspective, we can innovate our obsolete politics and policies and become a point of strength of EU.
Giovanni Sparagna(Aises Young)