Europe, public debt and implementation of the PNRR, the Italian recovery and resilience plan
Corporate promise: we are Europe. Our currency and target market are European. Our institutional rules and political decisions, required for investment and growth, are European. Our values (liberal democracy, environmental and social sustainability, the search for a competitiveness coupled with solidarity, care for the people, commitment to scientific research and quality) that inspire our obligations as social actors building wealth and creating employment opportunities, are European.
Over two difficult years, Italian enterprises have faced the COVID-19 pandemic and an intense economic slowdown, the war in Ukraine and the energy crisis, bottlenecks in a globalisation that needs to be reimagined, inflation and, now, a risk of recession. They’ve had concerns about the foolish crisis affecting the Draghi government, brought on by short-sighted and irresponsible political forces, fearing the consequences of a recession that’s coming to several parts of the world. Therefore, they have drafted, in a document recently approved by the General Council of territorial entrepreneurial institution Confindustria, 18 points constituting a strategy for resistance and recovery that takes into consideration Italy’s overall interests and insists on interventions that are crucial to guarantee development, income and employment. A true “priority schedule” aimed at the government that will be formed after the next political elections and that “represents an action strategy for the next parliamentary term.”
Indeed, its starts with a very political preamble, framed by the values and interests of the EU, disputed by populist and sovereignist shadows looming on current Italian politics. “Confindustria’s vision remains firmly tied to European decisions, just as the Western vision is to NATO. We believe, now more than ever, that Italy needs public financing that won’t be jeopardised again, and a quick implementation of the PNRR accompanied by new, sharp reforms, in order to meet the growth of poverty and social hardship.”
Industry, in fact, should be considered “a national security strategic asset”: without industry there’s neither development nor social cohesion. It’s a belief also substantiated by these past years’ figures and successes (as by ISTAT data on acquired GDP growth that reached 3.4% in 2022, one of the best in Europe). It’s a premise to more advanced proposals: “Without reformist action, the productivity and quality of public spending won’t improve, capital won’t be attracted, there won’t be any support for 10 million Italian people on the brink of poverty, there won’t be a reversal of the demographic curve, the growth of Italian industry in global value chains won’t be safeguarded.”
The first of these 18 points, then, insists on the “firm commitment to European principles and values”, as the pandemic and the war have corroborated the notion that solutions to the great global challenges of our times are found at a European, not national, level. Europe and the domestic market, whose proper and consistent functioning must be preserved, are key to the future of producers and provide a perspective through which the restoration of strategic supply chains – including national ones – can be strengthened and promoted, within the context of the twin transition, too. Steps forward towards a common European debt aimed at solidarity and a common energy policy, ECB’s recent adoption of the TPI (Transmission Protection Instrument), sharing the sanctions adopted against Russia after its invasion of Ukraine, are all key developments along a path leading to a much needed strengthening of European institutions and Italy must consider itself as irreversibly committed to this, without any concession to sovereignism.”
The second points reiterates the decision made by enterprises with regard to “Atlantic values”, with explicit reference to NATO and the West, binding democratic freedom with market freedom, a culture of rights and duties with the best corporate culture which, indeed, makes our manufacturing and service industries excellent worldwide (sustainability it’s the best representative example of this).
“The irresponsible political crisis that has ended a government based on national solidarity, led by President Draghi, has caused a crack in Western solidarity, already challenged by the Russian invasion of Ukraine”, reads the document. Thus, “the government that will arise after the elections must ward off any misunderstanding about this and reiterate its uncompromising stance in sharing the political, military and economic steps jointly taken by NATO and the US.”
The future sees commitment at an international level, in order to “avoid returning to a world divided into two blocks, which doesn’t correspond to the interests of a transformative and exporting country like Italy.” In fact, “full freedom in accessing energy, commodities and technologies must be the goal of all democratic countries’ shared effort, in the interest of the world, for a globalisation that will benefit everyone. In this context, Italy must enhance its central position in the Mediterranean area, as well as its active role in the dialogue involving all international actors.”
In an electoral campaign that already seems rife with costly and unrealistic promises (pensions, contributions, benefits for this or that category) and that threatens to implicate some kind of cross party determined to exacerbate national debt, Confindustria reminds us that “over the past ten years, governments of varying political persuasion increased the Italian public debt from 120% to 150% of the GDP – much higher than in other EU countries, considering that the pandemic didn’t just affect Italy. Italy’s public spending has been greater than the Eurozone average in each of the ten years taken into consideration and the country’s deficit has also risen, despite a higher-than-average fiscal strain. The fact that, with a maturity date of two years, Italy today has to repay a debt that’s 25% higher than that of Greece must make us stop and think.”
Hence, the new government “must consider itself obliged to pursue a structured balance in terms of public finances.”
Budget policies that don’t respect constraints “are thwarted by the tensions experienced by government bonds on the market” (market trends are shifting to show higher reliability in Greek government bonds). All political forces, then, “must be well aware that the possible activation of the anti-spread shield, recently introduced by the ECB, is conditional to meeting the commitments undertaken with the EU in terms of calibration of public budgets and implementation of reforms, including those laid down in the PNRR, as well as of the restoration of structural macroeconomic unbalances.”
Still within an EU context, “this asset should commit the future government to a necessary revision of the rules of the Stability and Growth Path, where more stringent constraints on national public finances should be balanced by adequate fiscal capacity at a European level, to be employed to mitigate the impact of potential crisis and increase public investments.”
Confindustria’s enterprises operate within what Giovanni Orsina terms “the precincts of earnestness” (La Stampa, 25 July): Atlantic loyalty, the will to constructively participate in EU life, a determination to not destabilise the Euro – that is, implementing the PNRR as an indispensable tool allowing Italy not to waste an extraordinary chance to reform and modernise European Italy and to finally untangle issues of low structural grown swamped by poor productivity.
With regards to the PNRR, in fact, we must insist on a key point: an effective monitoring system to verify the Plan’s implementation status, looking at legislative provisions, implementation policies, calls for tender, fund expenditure, all at both a central and at a regional and municipal level – the kind of monitoring that Confindustria wants, as a tool for clarity and the restoration of efficiency and confidence.
Other priorities concern “fair and sustainable” welfare, schools and universities, active employment policies to support the transition towards the digital economy and environmental values, salaries to be increased through collective bargaining tools and, as such, to be tied in with production growth, taxes, enterprise capitalisation, scientific research and technological shifts, an efficient and effective healthcare system, energy and the environment, infrastructures, transports and the logistics for “sustainable mobility”, funding development, economic and social political decisions for a “reversal of the demographic curve.”
Europe as the future, then. Good governance as a tool, going beyond the clamour of an election campaign driven by populism and setting sustainable development as a goal, taking especially into consideration the future generations. To enterprises, being leaders in an open and well-regulated market, within a “Reinventing globalisation” trend (to quote the headline of the mid-June issue of The Economist) means assuming a great, overall sense of responsibility and demanding, legitimately so, the same commitment from Italy’s future government.
Europe, public debt and implementation of the PNRR, the Italian recovery and resilience plan
Corporate promise: we are Europe. Our currency and target market are European. Our institutional rules and political decisions, required for investment and growth, are European. Our values (liberal democracy, environmental and social sustainability, the search for a competitiveness coupled with solidarity, care for the people, commitment to scientific research and quality) that inspire our obligations as social actors building wealth and creating employment opportunities, are European.
Over two difficult years, Italian enterprises have faced the COVID-19 pandemic and an intense economic slowdown, the war in Ukraine and the energy crisis, bottlenecks in a globalisation that needs to be reimagined, inflation and, now, a risk of recession. They’ve had concerns about the foolish crisis affecting the Draghi government, brought on by short-sighted and irresponsible political forces, fearing the consequences of a recession that’s coming to several parts of the world. Therefore, they have drafted, in a document recently approved by the General Council of territorial entrepreneurial institution Confindustria, 18 points constituting a strategy for resistance and recovery that takes into consideration Italy’s overall interests and insists on interventions that are crucial to guarantee development, income and employment. A true “priority schedule” aimed at the government that will be formed after the next political elections and that “represents an action strategy for the next parliamentary term.”
Indeed, its starts with a very political preamble, framed by the values and interests of the EU, disputed by populist and sovereignist shadows looming on current Italian politics. “Confindustria’s vision remains firmly tied to European decisions, just as the Western vision is to NATO. We believe, now more than ever, that Italy needs public financing that won’t be jeopardised again, and a quick implementation of the PNRR accompanied by new, sharp reforms, in order to meet the growth of poverty and social hardship.”
Industry, in fact, should be considered “a national security strategic asset”: without industry there’s neither development nor social cohesion. It’s a belief also substantiated by these past years’ figures and successes (as by ISTAT data on acquired GDP growth that reached 3.4% in 2022, one of the best in Europe). It’s a premise to more advanced proposals: “Without reformist action, the productivity and quality of public spending won’t improve, capital won’t be attracted, there won’t be any support for 10 million Italian people on the brink of poverty, there won’t be a reversal of the demographic curve, the growth of Italian industry in global value chains won’t be safeguarded.”
The first of these 18 points, then, insists on the “firm commitment to European principles and values”, as the pandemic and the war have corroborated the notion that solutions to the great global challenges of our times are found at a European, not national, level. Europe and the domestic market, whose proper and consistent functioning must be preserved, are key to the future of producers and provide a perspective through which the restoration of strategic supply chains – including national ones – can be strengthened and promoted, within the context of the twin transition, too. Steps forward towards a common European debt aimed at solidarity and a common energy policy, ECB’s recent adoption of the TPI (Transmission Protection Instrument), sharing the sanctions adopted against Russia after its invasion of Ukraine, are all key developments along a path leading to a much needed strengthening of European institutions and Italy must consider itself as irreversibly committed to this, without any concession to sovereignism.”
The second points reiterates the decision made by enterprises with regard to “Atlantic values”, with explicit reference to NATO and the West, binding democratic freedom with market freedom, a culture of rights and duties with the best corporate culture which, indeed, makes our manufacturing and service industries excellent worldwide (sustainability it’s the best representative example of this).
“The irresponsible political crisis that has ended a government based on national solidarity, led by President Draghi, has caused a crack in Western solidarity, already challenged by the Russian invasion of Ukraine”, reads the document. Thus, “the government that will arise after the elections must ward off any misunderstanding about this and reiterate its uncompromising stance in sharing the political, military and economic steps jointly taken by NATO and the US.”
The future sees commitment at an international level, in order to “avoid returning to a world divided into two blocks, which doesn’t correspond to the interests of a transformative and exporting country like Italy.” In fact, “full freedom in accessing energy, commodities and technologies must be the goal of all democratic countries’ shared effort, in the interest of the world, for a globalisation that will benefit everyone. In this context, Italy must enhance its central position in the Mediterranean area, as well as its active role in the dialogue involving all international actors.”
In an electoral campaign that already seems rife with costly and unrealistic promises (pensions, contributions, benefits for this or that category) and that threatens to implicate some kind of cross party determined to exacerbate national debt, Confindustria reminds us that “over the past ten years, governments of varying political persuasion increased the Italian public debt from 120% to 150% of the GDP – much higher than in other EU countries, considering that the pandemic didn’t just affect Italy. Italy’s public spending has been greater than the Eurozone average in each of the ten years taken into consideration and the country’s deficit has also risen, despite a higher-than-average fiscal strain. The fact that, with a maturity date of two years, Italy today has to repay a debt that’s 25% higher than that of Greece must make us stop and think.”
Hence, the new government “must consider itself obliged to pursue a structured balance in terms of public finances.”
Budget policies that don’t respect constraints “are thwarted by the tensions experienced by government bonds on the market” (market trends are shifting to show higher reliability in Greek government bonds). All political forces, then, “must be well aware that the possible activation of the anti-spread shield, recently introduced by the ECB, is conditional to meeting the commitments undertaken with the EU in terms of calibration of public budgets and implementation of reforms, including those laid down in the PNRR, as well as of the restoration of structural macroeconomic unbalances.”
Still within an EU context, “this asset should commit the future government to a necessary revision of the rules of the Stability and Growth Path, where more stringent constraints on national public finances should be balanced by adequate fiscal capacity at a European level, to be employed to mitigate the impact of potential crisis and increase public investments.”
Confindustria’s enterprises operate within what Giovanni Orsina terms “the precincts of earnestness” (La Stampa, 25 July): Atlantic loyalty, the will to constructively participate in EU life, a determination to not destabilise the Euro – that is, implementing the PNRR as an indispensable tool allowing Italy not to waste an extraordinary chance to reform and modernise European Italy and to finally untangle issues of low structural grown swamped by poor productivity.
With regards to the PNRR, in fact, we must insist on a key point: an effective monitoring system to verify the Plan’s implementation status, looking at legislative provisions, implementation policies, calls for tender, fund expenditure, all at both a central and at a regional and municipal level – the kind of monitoring that Confindustria wants, as a tool for clarity and the restoration of efficiency and confidence.
Other priorities concern “fair and sustainable” welfare, schools and universities, active employment policies to support the transition towards the digital economy and environmental values, salaries to be increased through collective bargaining tools and, as such, to be tied in with production growth, taxes, enterprise capitalisation, scientific research and technological shifts, an efficient and effective healthcare system, energy and the environment, infrastructures, transports and the logistics for “sustainable mobility”, funding development, economic and social political decisions for a “reversal of the demographic curve.”
Europe as the future, then. Good governance as a tool, going beyond the clamour of an election campaign driven by populism and setting sustainable development as a goal, taking especially into consideration the future generations. To enterprises, being leaders in an open and well-regulated market, within a “Reinventing globalisation” trend (to quote the headline of the mid-June issue of The Economist) means assuming a great, overall sense of responsibility and demanding, legitimately so, the same commitment from Italy’s future government.
