Election Day plus Twelve

Il Corriere della Sera, historically one of the Italy’s most authoritative newspapers, prints a weekly report on the economy appropriately entitled, “L’Economia”. The report usually hits the newsstands on Monday. In the March 12th issue, there was an interesting article by Enrico Marro on the expectations of the country’s industrialists and businessmen after the big electoral bang of the 4th made mince-meat of the Partito Democratico. 

High up on the list are, you guessed it: tax cuts, followed by simplification of the Italian bureaucracy or PA (public administration). Luigi Di Maio promises to, “…. quickly, repeal 400 useless laws … ” and generally do away with Italy’s jungle of laws, reduce bureaucracy for businesses and individuals, streamline and digitalize the public administration. Di Maio’s remarks have drawn the attention and approval of Italian businessmen encouraged by Luigi’s plans to turn Italy into a “smart nation”, meaning a digitalized land united by optic fibers and a nation-wide grid of high-speed, broad-band WiFi connections.

The above program would seem to integrate well with the League’s program to obligate the PA to respond to transactions initiated by businesses and individuals within a maximum term of sixty days, subject to an automatic consent clause in the event of the PA’s failure to respond. The League also has as foremost in its political program for Italy, the reduction, rationalization and simplification of the bureaucracy by whatever means possible, including digitalization. For Matteo Salvini of the League, the country’s laws should be few, simple and easy to understand.

Italy’s Confindustria or Union of Industrialists has recently gone on the record in favor of a simple and more efficient Italy. Considering that the Italian “government” or stato as the Italians prefer to call it, is the country’s number one employer, directly or indirectly accounting for anywhere from 50% to 70% of the country’s GNP, modernizing the government bureaucracy is paramount to a successful overhaul of the entire system.

The above cover but a few commonly shared but important aspects of the political platforms of the two major winners of the recent elections, namely the “M5S” and “The League”. Considering that Italian bureaucracy along with a judicial system beset by inefficiency and delays are often seen as major obstacles to in-bound foreign investments and Italian businesses, a separate issue altogether is the sorry state of Italian infrastructure. The accusations here are that no major infrastructure has been carried out in Italy over the last forty years primarily because of the jungle of laws and countervailing authorities involved in the licensing process.

Each of the two substantial winners in Italy’s recent general elections, naturally have more  points in their respective platforms: the M5S ran away with the popular in the south and the islands, some say, because of the appeal of a proposal to grant all citizens a guaranteed minimum income. The exact details of such a plan are unclear.

Likewise, The League proposes a flat tax for corporations and individuals alike. The result was The League made big strides among the voters of the northern regions where private enterprise and the self-employed account for most of the GDP.

Most Italian reformers appear less interested in doing away with the red tape than they are in reducing and/or digitalizing it. Don’t do away with it just speed it up. Their problem is what to do with the civil servants that become redundant as a result thereof. In Italy civil servants are sacred cows that cannot be fired. Teaching “old dogs” in the government bureaucracy “new tricks” is a reformer’s nightmare. During the next four years, however, some half a million “old timers” are expected to retire and bingo! They will be replaced with kids just out of college who are computer savvy and digitalized. Wow, you just can’t wait right? Don’t get your hopes up too high. Even now much can be done online … except pay the government required stamp duty …. and this in a country that is thinking of doing away with paper money as a means of payment.

Italy still lags behind most other EU Member States in the use of credit cards, ATM cards and other forms of electronic payment devices. Italians prefer cash. Why? Because it is more difficult to trace and lends itself to satisfying the wise-guy mentality of the furbi. OK so what is the solution? Well, if PayPal were an Italian corporation the natural solution would be a form of nationalization. Of course PayPal is not Italian but it does operate in Italy and conceivably could be licensed by the Italian government to collect and fork over to the stato the taxes required in connection with public services subject to stamp tax duty. There are of course other international online payment services but none that I know of that are Italian or localized in Italian.

Notwithstanding it all, The League and M5S are talking and despite the differences there are significant points of contact between the two maverick “new” parties. The League because of its pro-business and free-enterprise bias does not see eye-to-eye with the new non-ideological left that is M5S. Whereas Di Maio and his people are for big government, centralization and even more welfare, Salvini and The League favor decentralization, a less invasive and smaller government and more private enterprise. Both agree that Italy needs to regulate immigration and cannot accommodate an unlimited number of migrants. There seems to be agreement on the principle that each should have the Presidency of one of the two Houses of Parliament. Both parties share similar if not identical views on simplification of the bureaucracy and the need to cut red tape and make Italy an attractive place in which to do business. They both recognize the need to reduce taxes and the national debt to some extent at least. Not bad in less than a fortnight’s work. Still there is much that needs to be done before anyone sees any daylight at the end of the long, dark tunnel ahead.

Yesterday, Angela Merkel and Emmanuel Macron held a joint press conference in which they expressed their concern for the victory of Italian “populists” in the recent elections and their regrets for not having done more to help the Italians through difficult times. And while Italian political leaders conspicuously avoided any comments, Italy’s mainstream press all but ignored the joint communiques of Merkel and Macron but not Steve Bannon’s recent visit to Italy before during and after the recent elections nor his comments in favor of the “populists” and their anti-EU rhetoric.

Done in Chiavari (GE) on March 17, 2018 by


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