“To the Parliament of the Republic, to the Political Parties”
We submit to your kind attention a petition [at the bottom of this post] addressed to the Italian Parliament and to the political parties with some proposals concerning the current economic policy situation. We are asking for signatures from both our Italian and foreign colleagues and we shall publicise the petition both on the Italian and foreign mass media after a significant number of signatures is collected. Past experience suggests that these documents can become a reference point, even over the long period, for that part of public opinion that is sceptical of the dominant point of view. All signatures, including ours, will be put in strict alphabetic order. We kindly ask you to send your approval to Cesaratto@unisi.it, or Ciccone@uniroma3.it, or firstname.lastname@example.org . We apologies if you receive more than one request (we do not have any secretarial support).
The petition and the signatures (regularly updated) will be posted in http://documentoeconomisti.blogspot.com/)
Thanks for your cooperation.
Nicola Acocella (La Sapienza Rome)
Roberto Artoni (Bocconi, Milan)
Paolo Bosi (Università di Modena e Reggio Emilia)
Sergio Cesaratto ((Università di Siena) Cesaratto@unisi.it
Roberto Ciccone (Università di Roma3) Ciccone@uniroma3.it
Marcello De Cecco (Scuola Normale Superiore di Pisa)
Domenico Mario Nuti (La Sapienza Rome)
Riccardo Realfonzo (Università del Sannio)
Antonella Stirati (Università di Roma3) email@example.com
To the Parliament of the Republic, to the Political Parties
In this difficult period Italy needs an authoritative government which is able to act with determination in both the European and global context. Although we do not neglect the recent serious responsibilities of the Italian ruling class which has been unable to bring about a process of modernisation of the country necessary to put it back on a growth path, the Italian economic stagnation in the last decade has its main cause in the European macroeconomic context, and particularly in the absence in the Eurozone of fiscal and monetary policies aimed at sustaining economic growth, full employment, trade balances between the Monetary Union members, and with which to provide a greater distribution equity within and among countries.
The European crisis, worsening particularly after the financial market attack on Italian sovereign debt, finds its origin in the lack of this pro-growth context, and can only partially be explained by the progressive collapse of credibility of the former government. The absence of the traditional role of lender of last resort within the mission of the European Central Bank (ECB) is an additional explanation of the dramatic assault on Italian and other Eurozone sovereign debt. The financial measures adopted by the Eurozone governments to sustain the sovereign debts of the European periphery, like the EFSF, have been revealed to be largely inefficient at solving the financial crisis of the small peripheral countries, let alone to face that of the larger peripheral economies. The contractionary fiscal measures that have accompanied the European financial support provided have worsened the recession and the financial crisis of those countries. At the moment the Eurozone is without a compass. Because of the opposition of the stronger European countries, it has even rejected the proposal advanced at the recent G-20 summit of a special emission of Special Drawing Rights by the IMF in order to support the sovereign debts under attack. The survival of the Monetary Union and even of the Single Market are at stake.
We believe that the current situation and the solution to its short and long period causes can only be met within the context of a progressive change of all European policies; in this framework Italy must also endeavour to make necessary reforms. We stand for a stronger coordination of the European fiscal, monetary and wage governance subject to a complete commitment to full employment. For this reason we oppose a balanced public budget clause in the national Constitutions.
In these circumstances we maintain that the new Italian government should rapidly act through the appropriate European institution, with the required determination and political alliances, to obtain a firm and unlimited guarantee by the ECB on the European sovereign debts with the aim of lowering the interest rates to a pre-crisis level. This intervention has been supported by the American Administration and by many international economists of different theoretical persuasions. Also relying on this authoritative support, we believe that policies of fiscal contraction are counterproductive. The request of the ECB pro-active role should therefore be accompanied by a commitment not to reduce the ratio of national public debts on GDP, but rather to stabilize this ratio at the current levels. Financial markets would understand this commitment and appreciate it. A new Italian government, either composed by “technocrats” or by politicians, that limited its duty as a mere executor of the European requests, as expressed in the last weeks, would cause a worsening of the financial crisis, at the Italian, European and world level, with devastating social consequences, and the unsustainability of the present European monetary and trade institutions. Firm in denouncing such perils, Italy should be an inflexible promoter at the European and G-20 levels of prompt fiscal and monetary policies to sustain aggregate demand, particularly in the trade surplus national economies.
The reduction of the interest rates in association with the commitment to the stabilisation of the sovereign debt/GDP ratio, in the context of international expansionary policies, would inItaly (and elsewhere) free the necessary resources to sustain growth on the aggregate demand side and support competitiveness. More specifically, we believe that these resources – with those forthcoming from a serious attempt to reduce tax evasion and from an ordinary (not una tantum) wealth tax – should be used in the first place to reduce the tax burden on wages, increasing net wages; to support education, R&D and culture; to sustain public investment to promote public direct involvement in production; to Mezzogiorno and the environment, and to sustain legality. Around these objectives an authoritative new Italian government should commit itself inEurope to asking and returning dedication and trust to the Italian people.