The central bankers who met in Jackson Hole again this year are optimistic. They insist on “fostering a dynamic global economy”, hence the name of their meeting, taking a stance against the narrow-minded protectionism that the Trump administration has brought to light in the USA as well. They believe that today’s economic growth can improve despite geopolitical fragility and international tensions. Mario Draghi, BCE, reasserted the opinion that the recovery is being consolidated. Of course, the opinion of the bankers is based on facts and figures. The OCSE predicts that the major world economies will all close 2017 positively with a simultaneousness that has not been seen since 2007 when the Great Recession started. International Monetary Fund estimates a world growth of 3.5% this year destined to improve in 2018, against the 3.2% of 2016. The Wall Street Journal amplified the echo and devoted a lengthy article to the positive results of Mediterranean Europe, including Spain, Portugal, Italy and even Greece after years of struggle.
Does that mean that all is well? Caution is the word. A 1.5% growth of the gross domestic product of Italy is expected in 2017, which is better than the past years but still lagging behind the rest of the Europe Union (with an average of 2.2%).
It was Governor of the Bank of Italy Ignazio Visco’s turn to damp the enthusiasm of propaganda-prone politicians: “The recovery in Italy is conjunctural, not structural”, he warned at the Meeting of Comunione e Liberazione in Rimini last week. For the change to occur “it is necessary to proceed in the current direction”, that is with “reforms” and “innovation”, to “make companies grow more able to compete on international level”. There is another element of fragility which should not be underestimated: economic recovery is based on exports and on improving the domestic market but it does not generate employment. In other words, it is a “jobless recovery”. The younger generations suffer from this the most.
The political challenge is to consolidate productive and social dynamism evolving towards “Industry 4.0” and to make our companies digital (the tax relief actions implemented by the Gentiloni government to support companies investing in machinery, innovation, research, patents and high-tech move in this direction). It is an economic challenge for entrepreneurs: investing more, making their companies grown, winning space on the international market.
The industry is the engine of Italian recovery. In factories. And in manufacturing services. Innovation incentives are the impulse in this case. The automotive industry as a whole is doing well. Rumours about FCA (the interest of Chinese investors, the suggestions of an alliance with Volkswagen for commercial vehicles and other agreements for making next-generation cars) were heard in August and are indicative of an obvious drive on industrial level and of the attraction potential which offers the possibility of expressing even more value. Positive data concern premium industries as a whole: pharmaceuticals, chemicals, rubber and mechatronics, in addition to the traditional areas of excellence of Italian-made products (farming and food, furniture and fashion). This is confirmed also by Mediobanca in the report on the 2065 large and medium-large Italian companies: third year of growth for factories, with a 1.9% increase of revenue in 2016 (“Corriere della Sera”, 11 August). Investments are also on the rise, with an increase of 7.3% in 2016 in manufacturing, the highest since 2010, while regretfully public investments dropped by 26.9%.
It is precisely the issue of investments that brings the discussion back to the limits of Italian politics.
Companies are on the move. Confindustria, invited by Assolombarda, will be calling the regional association representatives to Milan for a meeting on October 2 to discuss the topics of European investments, investments in innovation and “Industry 4.0”, with the idea of seeking alliances with companies in Germany and France on these themes. With the due exceptions, the political world does not appear to be coping with the economic challenges in progress. The Gentiloni government is doing what it can, with intelligence and sense of responsibility. The debate between and within the political parties has other concerns: electoral law, alliances, roles and future of the leaders. In addition to arguing on how immigration is managed, privileging slogans (often racist) over political decisions. Economic is moving forward, in Europe too. Unfortunately, our politicians are personalistic and provincial.