Macarrónica Economy: the problems that Italy brings to Europe

Italy looks more and more like Jep Gambardella, the exquisite character played by Toni Servillo in La Grande Bellezza by Paolo Sorrentino. The film, which somehow updates the argument of La Dolce Vita by Federico Fellini and brings it back to the time of Silvio Berlusconi, shows the routine, lonely and unsatisfied life of a writer of 65 years old, famous for his youth novel and since. He could not write anything interesting. A bona fide journalist, he devotes himself to a comfortable life and celebrates the decadent society of Roman society. He lives old glories, without contributing to the present, waiting for the miracle that covers the desire to live. Gambaredella is the personification of Italy -And all Europe- worn, haggard, elegantly dressed with an old and doubtful taste. His life is reduced to drinking, dancing, misplacing, wasting energy in bbad discussions with friends as finished as he is.

The Italian economy has entered this week officially in recession for the third time since the start of the 2011 crisis. According to the National Institute of Statistics (Istat), activity has contracted by 0.2% of GDP in the last three months of last year. This is the second consecutive quarter of falls. In the euro area as a whole, things were not going much better. There was barely 0.2% growth, the same rate as the previous quarter. The 19 countries that share the European currency ended the year 2018 with an advance of 1.8%, five tenths less than in 2017.

The the fear in all the capitals of the union is that Italy ends up being an unstable anchor flowing the boat. Germany, the main economic engine of the continent, recalculated last Wednesday its growth forecast for 2019 from 1.8 to 1%, the Brexit is still in its labyrinth and increases the prospects of exit without negotiation, social tensions in France for Yellow vests affect consumption and, although the trade war between the United States and China has resulted in a truce, the uncertainty is great. In this context of turmoil, Italy, Europe's third-largest economy, is becoming "the worst of all", even over Greece.

Not surprisingly, Prime Minister Giuseppe Conte used the clbadic formula: "the fault lies with previous governments and the complex world situation". He hid behind the fact that the budget presented by the anti-system coalition, formed by the Five Star Movement and the far-right La Liga, had been approved just a month ago. Independent economists believe that it is relatively overly costly accounts of public spending, the almost permanent struggle with Brussels' central European government and lack of investor confidence. Beyond the inheritances received (it must be admitted that the reserves were decimated), Italy stagnated for decades. Something that has accumulated a huge debt of 132% of GDP. And the prospects are not optimistic. The government had forecast a growth of at least 1% in 2019, but the Bank of Italy and the IMF have brought this advance down to 0.6%.

The eurozone is about to celebrate its twentieth anniversary, during which it can present as a victory its more than five years of uninterrupted growth, its 23 quarters of expansion and its unemployment rate below 8% for the first time for a decade. But the president of the European Central Bank, Mario Draghi, put things in perspective: at that time, the European economy had barely exceeded 10%, much less than the United States and China, its global competitors. Germany, which marks the economic step of the continent, remains highly dependent on exports, the car industry is paralyzed and the Rhine, the river where most of the goods transported to its main markets this winter does not have enough pulling of water for its future. huge freight barges.

The star economist, Paul Krugman, he said in an badysis of the next crisis in the global economy: "For years, the underlying economic weakness of Europe, due to the aging of its population and to the ## 147 ## Germany's obsession with budget surpluses was masked by the recovery of the euro crisis. the good race seems to end, with the uncertainty surrounding Brexit and the slow-motion crisis in Italy that undermine confidence. As in the case of China, recent data is bleak. And like China, Europe is a major player in the global economy, so its pitfalls will be splashing everyone, including the United States.

The Coalition to Italian power, right-wing populist, formed by the movement Cinque Stelle (M5S), the creation of humorist Beppe Grillo and anti-immigrant Europophobes of the former Northern League, every time he seems more buried in his own mud. It is the 66th formation that has governed since the Second World War and took 88 days of negotiation to make it possible. Last May, Law Professor Giuseppe Conte was appointed Prime Minister. Although it is only the face of the government. Power is in the hands of his deputy prime ministers, the brave Matteo Salvini of the League and Luigi Di Maio, the very young leader of the "grillinos".

Since then, they devoted themselves to breaking all the rules of the European community in order to fulfill in a certain way their multiple campaign promises. They had badured that they would create a citizen income, a universal base salary of 780 euros, but they did not find their place in the budget. The Minister of Economy, Giovanni Tria, has clearly indicated a deficit limit that has prevented it. This is a moderate who wants to comply with EU standards. Prime Minister Rocco Casalino, a former Big Brother spokesman, told a Corriere reporter, "We do not care what Tria thinks, if we are to sacrifice it, we will. is that in the department, a number of people have been protecting the mechanism for years, in the whole system, it is not acceptable that the 10,000 million shits are not found. is not the case, we will dedicate all the objectives of 2019 ".

And it was so. Tria could not stay in a deficit of 1.6% of GDP. The Council of Ministers insisted so that it reaches the dangerous 2.4%. According to the chronicles of that day, Minister Tria sought the help of the President of the Republic, Sergio Mattarella, who was attending a concert of Ennio Morricone in the Santa Cecilia Roman Auditorium and n & # 39; He could not answer. So he was alone, swallowed up and agreed to defend a project he did not believe in. The 10,000 million appeared and the deficit exploded. From Brussels came criticism. But Salvini responded well to the Italian: "I do not frego". And he tried to drunk the president of the European Commission, Jean-Claude Juncker: "I speak only with people sober".

The public debt expert, Carlo Cottarelli, explained the situation at that time to the newspaper El País de Madrid: "European rules have been violated, this is the first time they are not disguised. the less they are honest and they clearly say that this law increases especially the risks, with a high deficit and a debt that falls too slowly, we are exposed to risks that plunge Italy into a recession, caused by a debt very high public, our competitiveness is not what it should be. "The prediction was accomplished. Lucrezia Reichlin, a professor at London Business School, believes that the root of all ills goes back to the nineties. "The first problem is growth, which is at the end of the European average since before entry into the euro, and this is due to demographics, but also to productivity." The second is that behind this figure large heterogeneity of entire parts of the productive system, concentrated in the southern regions. The key to a convincing economic policy should be to tackle growth, but also to these small business problems"he explains.

Two months later, the tragedy of the collapse of the Morandi Bridge in Genoa revealed a tragedy that revealed the long impbade without investment in public infrastructure. And the general decline also appears very clearly in hard numbers. Italy's GDP per capita in 1998 was almost 20,000 euros; very close to the German with 24 600 euros and above the average of the euro zone which was 17 700 euros. Nearly two decades later, in 2017, this same indicator was 28,500 euros, against 30,000 euros in the euro zone and 39,600 in Germany. The cumulative growth of real Italian output per capita over these two decades was 1.15%, compared with 26% in Germany.

Giorno tristissimo, Italian newspapers said the entry into recession this week. And alliances of the European far right that see what is happening in Rome a "political laboratory" to match their ambitions have begun to recalculate their economic speech. From Viktor Orbán in Hungary to the German Alternative für Deutschland and Marine Le Pen in France – all dressed in Steve Bannon's verba, former strategic advisor to Donald Trump, who now works for everyone – but they retain their Eurosceptic stance but are starting to put it a tighter eye on the numbers that promise their growing electorate.

At the same time, Europe's eternal values ​​of "freedom, equality and fraternity" imposed by the French Revolution of 1789, is waiting for a miracle like the one that gave Jep to Oxygen Gambardella, the character of La Grande Belleza. In the film, he cuts through the antique perfume of Fanny Ardant. He sees a giraffe among the Roman ruins and the sea on the ceiling of his room. Resume forces, renew; Perhaps, write a new novel. But like Italy, First, you have to shake the ashes to try to take off again.