Words. They are “stones”, heavy, capable of striking and of doing damage. They express feelings and “let you live” when they are relevant, sincere (this is what Paul Eluard, one of the greatest 20th Century poets, taught us). They recount the world and help determine its history. They should be uttered with respect and a sense of responsibility. Mario Draghi is a person backed by solid studies and good reading (he was among the chosen pupils of Federico Caffè, an economist of extraordinary competence and high moral standing, at the University of Rome) and boasts a rare experience as a man of the main international economic institutions. Over the years, he has never spoken out of turn, out of demagoguery or pride. And so the words he spoke last Friday in Frankfurt, during a meeting of the ECB, of which he is the authoritative and esteemed president, should be heeded and taken very seriously.
Speaking about the Italian Government and the declarations of its leading exponents, Draghi said: “In recent months the words have changed multiple times and what we are now expecting are facts, mainly the budget law and parliamentary debate”. He then adds: “Unfortunately, we have seen that words have done some damage, interest rates have risen, for families and companies”. Similar admonition comes from Mario Centeno, Minister of Finance in Lisbon (a European country which was once struggling, anything but a follower of the orthodoxy of austerity, so dear to the Germans) and President of the Eurogroup since 2017: “Too much uncertainty is detrimental, EU rules must be respected” (“Corriere della Sera”, 14 September).
That’s the point. So much talk by exponents of the government about flat tax (with two or three levels, therefore far from “flat”), pensions and citizenship income, tax amnesty (even if it is called “tax peace”, the substance doesn’t change: a “one-off” which does not structurally affect budgetary balances, aside from any other consideration on its fairness, against those who have always paid their taxes), exceeding the 3% limit and other commitments in accordance with the Maastricht parameters, a lot of controversy against the EU and the Euro (right up to threatening not to pay Italian contributions to the European Union budget), lots of declarations on proposed nationalisations, cancellation of concessions, penalties for international investors, criticism against independent Authorities, threats against freedom of information (which is an essential tool for markets) have Italy far from credible. “The great bluff a propaganda tactic”, were the controversial words of “Il Foglio”.
Those who have invested in Italy, buying public debt securities or planning entrepreneurial activities, instead need a solid and stable reference framework. Otherwise, this Country will be put to one side: at the end of June, the portfolios of international investors contained 58 billion fewer Italian public securities than two months earlier. “Escape from BTP long-term treasury bonds, declining demand from abroad”, were the precise headlines in last weekend’s newspapers.
The result of so much talk without a sense of responsibility was serious: rise in spread, public debt securities looked upon with concern and set aside in investment choices, rise in rates to try to compensate for the increase in the “Italy risk” (one point more on decennial rates, from May to today). And the Borsa stock exchange falling. For families, mortgages are more expensive, while for businesses, borrowing costs are on the rise. For public funds (therefore, for all our pockets), this means higher cost of debt, less money for reforms and better services. In short, you have to pay for everything, and not in words.
It’s easy, again with words, to criticise “Mr Spread”, as if the spread were an evil villain of “bad finance” and not a simple thermometer of the credibility of Italy. It’s easy to be controversial about “the plots of the markets”. The reality is that, as bluntly stated by Draghi: if those who govern an fragile Italy laden with public debt, in an economy closely linked to international relations, they will not gain much trust, and the entire country suffers. And those international links – it must be added – are an essential component of our wealth and our prosperity, given the strength of our companies’ exports. They should be explored, not marred by nationalism which is only good for rough propaganda.
In a Europe that, beyond its establishment myths, needs to reflect deeply on its crisis and on the functioning of rules and institutions that sees increasing criticism in large sectors of public opinion, the responsibility of those who sits at the summit of governments and institutions must be that of knowing how to build a serious public debate, one that is competent, backed by a credible reform project and not fuelled by demagoguery and controversial animosity. Europe needs criticism and reforms, not just people who criticise, for the good of a “common house” that has guaranteed seventy years of peace, freedom, and fuelled prosperity. Italy was one of the founders of this Europe, and over time became one of its leading partners. This is a role that must be reconfirmed and defended, precisely at a time when Europe and integration need to make important steps towards change and improvement, building “an image of an Archipelago: a space composed of quite distinct realities, of separate times and yet all navigating towards one another, without any hegemonic or harmonising vain desires. Realities capable of distinguishing different areas of responsibility and competence, i.e. of sovereignty, to say it with the effective words of Massimo Cacciari (L’Espresso, 16 September) .
Not just talk and controversy, therefore. But acts of good governance, starting precisely with the budget law. Facts and choices that make us appreciate anyone who invests in us. Knowing that we really need those international investments, to do business, create jobs, improve the quality of the infrastructure and everyone’s lives.