TRENTO. “We need a responsible state in the post-pandemic recovery phase.” The governor of the Bank of Italy, Ignazio Visco, speaks of responsibility, pragmatism and farsightedness in his speech at the Trento Festival of Economics, which is coming to an end today. But not only. According to Visco, a profound and necessary restructuring of the Italian economic system must be expected, which must be accompanied by all the social partners. At the same time, budgetary rules at EU level need to be rethought, taking into account that flexibility will be a priority.
The need is to avoid the mistakes of the past. Not only from an economic point of view, but also from a social point of view. And in such a scenario, also and above all on the part of the state, greater responsibility is needed. Arrived in the Trentino capital in the morning, and defying an impending storm that involved the Adige valley, Visco tried to look to the future of Italy, which through the National Recovery and Resilience Plan (Pnrr) has the opportunity to exploit approximately 250 billion euros of investments between now and 2026. “The period we are experiencing undoubtedly requires an answer to the question of what the role of the state must be in the economy. We have had a large increase in debt, but it is certain that this role will be different after the pandemic. Before Covid there was a minimal, essential state, also because there were sectors where private initiative could not intervene », Visco began. Now, on the other hand, “we have understood that, for example, we need preparation for new social cushioning tools, such as the Sure at European level”. And it is precisely the social safety net, if made more unambiguous and less fragmented, will be crucial to face the transitions underway in the Italian connective tissue, from digitization to convergence towards environmental sustainability. Also because, said the governor, companies will be called to respond to central banks also in this respect, as also suggested by the governor of the Bundesbank, Jens Weidmann, a few days ago.
To move towards the new normal, Visco added, it will also require more flexibility than in the recent past. “The European Stability and Growth Pact has been suspended to go beyond the rules to deal with the emergency, and in the revision we must ensure that we arrive before the suspension itself”. Furthermore, he explained, “it is clear that in the verification process it will be necessary to understand which macroeconomic imbalances to consider, and it is obvious that there will have to be some flexibility, especially looking at the long term”. The dialogue between the euro area partners will be important once the vaccination campaigns against the Sars-Cov-2 coronavirus are completed.
Not to be underestimated will be the fiscal consolidation plans to reduce the budget shocks observed in the pandemic 2020, which have brought the debt / GDP ratio close to 160 percent. A theme that will become central, at European level, starting from 2022. “In recent decades, we have not had a debt problem, but a growth problem”, remarked Visco. Reversing the route, including through the PNRR, will have to be essential. In other words, the same basic concept used by the Prime Minister Mario Draghi, who several times in recent months has talked about the difference between good debt, i.e. aimed at structural investments, and bad debt, aimed at subsidies. Breaking the vicious circle between loans to companies that have no objective capacity to be on the market, therefore, can be one of the keys to having a more virtuous and sustainable economy in the long term.
Regarding one of the other hot topics for the country, namely the blocking of layoffs, Visco used a pragmatic attitude. “There will be a broad restructuring of the Italian economy, and if this is entrusted only to market forces there could be many risks. It will therefore have to be guided, including by the state. The problem is to ensure that change occurs with a dialogue between business and the world of work, through training and management of the transition. The former must understand that we are in a new world, the latter must understand how to get to this new normality ”, underlined Visco. This is because the skills needed today are very different from those of 30 years ago, and the pandemic has highlighted this as never since the Second World War until today. An opportunity that, according to the tenant of Palazzo Koch, cannot be wasted.