July 2020. In The Red.

JULY 2020. In The Red


Sitting on the side lines of a nation that is not yours by birth but only by preference, you might be excused for not having ‘attitudes’: that is opinions on the way of things that might be considered controversial. Of course, when you have been a resident for a great number of years you cannot avoid making comparative statements, on the strength of which, natives will often pester you for a comparison generally relating to health care, education, and more recently, the economy, which is all very fanciful in the extreme. You cannot, in fact, escape from what has been a descending line of poverty by way of the country’s ineptitude in doing its sums! Just now, here in Italy, both aspects of this conundrum seem to be in a very poor shape, a condition that has been exasperated by the latter’s inability to support the former. While nearly all nations have been racking up debt in an effort to combat the COVID 19 virus the majority of those not in the E.U. have financial margins or monetary mechanisms to help counter its effects. Italy has few that are not overloaded already. Like France, Italy has chronic unemployment, a legacy that it has found difficult to shake off, but more crippling is its failure to bring its debt under control which stood at 134.8% of GDP in 2019 and will touch nearly 160% in 2020. This is a contraction in one year of 15% in GDP, a situation not seen in Italy since 1946. Meanwhile, the public debt is more than 2.4 trillion Euros placing it among the top five indebted nations on earth. This in a nation that has an intelligent work force and the potential to restore its once healthy industrial growth – a positive position that existed only three decades ago, yet is now almost silently sliding off the map.

Why has this come about? Where does a nation go when faced with such a burden as this? Not as easily as Mr Conte believes by going cap in hand to the European Union. Something has, of course, been done, but almost certainly at the expense of the ‘frugal four’ – Holland, Austria, Denmark and Sweden, as well as solvent and not so solvent members of the EU. Italy will get 87 billion from the Recovery Fund but as they’re a net contributor to the EU Budget the real value, according to a Telegraph report, is just 37 billion. The running battle has also left the ‘profligate four’ – Italy, Spain, Greece and France with some funds to squander, but there is no real victory anywhere and some very disgruntled losers. The acrimony will surely resurface before the ink is dry on their signatures. Already there is a feeling Italy has used the excuse of the COVID 19 crisis to inflate political spending and demanding free money to offset it. I cannot believe the moral Italian citizen will not feel more than a twinge of shame at another tranche of debt to pile on to the rest. But perhaps I’m wrong. With adequate pensions and a penchant for tax evasion running at one hundred billion euros a year, what’s the problem? No one expects them to be clairvoyants, but black clouds surely suggest the possibility of rain, even to the optimistic. From any perspective, at the moment, apparently not.

Thus, from my specific point of view it seems the Italians in Tuscany don’t seem to be aware of the financial dilemma they’re in, and the probability is not many other regions do either. Poverty can be remembered by the septuagenarian’s brought up in the tail end of the fifties, but otherwise their children have known little hardship like those in the south. One of the reasons for this is that at the beginning of this new millennium a roofless broken-down old farmhouse might set you back two hundred thousand euros, and the same again just to get it standing up. Most of these were no longer parts of large estates, but appendages to small farms inherited under the 1950’s agricultural reforms when 800,000 hectares (2,000,000 acres) were redistributed among tenant farmers for almost nothing. Something of a little gold mine to a great number of Tuscans. Within twenty years it witnessed the arrival of the ex-pat revolution who gobbled up the ruins and turned them into bijou homes along with some of the locals who, taking advantage of a derelict two acres of property, turned the same into agriturismi apartments in old barns and unwanted farm buildings with the help of EU subsidies. You can imagine the ‘gravy train’ builders, electricians, carpenters and plumbers were on. Attracted by the enormous cultural wealth of the area, foreigners have also scattered their largesse into every corner of the region through conventional tourism. One hundred million tourists represent a lot of money splashing about in restaurants and bars. Without a doubt tourism will take a hit, given the pandemic, but the psychology of ‘everything’s alright today’ is likely going to hang on until the last cent is gone. At this point, with the reality of empty pockets, the revelation of the root and cause of their problem should be apparent. Why is it then that I still get the feeling that they’ll still be looking for someone to come and bail out the boat? Perhaps the EU could raid the requested 2.5 billion Cultural Fund its EU Department is asking for. Will that really all be necessary with the continent in and out of lock downs and social distancing?

As I’ve mentioned before, the Euro is a lead weight round their neck, not because they’re too weak a nation to slip the noose and throw it out, but because their governments are too weak to tell them to. It means stalling pensions and increased taxation on all fronts, but one can see the people won’t understand the need if the fat cats can still run for cover in off shore havens and shell companies. It has to be: one in, all in. Italexit may not be a bad thing after all.

If that was not enough, the nation is almost totally unaware that they are not living in a Democracy at all. They might think they are, but they are not. Without any doubt, like the rest of the EU nations, they participate in a type of government called a Bureaucracy. Not many Italians will have heard of Max Weber, the Prussian sociologist and political economist who died in 1920, one of the most important theorists in the development of modern western society. It is worth repeating one aspect that he pointed out: a strong federal government cannot be established until it alone, and not the individual states who comprise it, has in its hands all major administrative functions and the sole power to wage war. When an individual state in a federation no longer can raise enough revenue to maintain its own armies or has to depend on the federal government for money, then the state has lost in actuality the sovereignty it may still maintain as a fiction. As Italy, by this analogy, is now really no more than a region and not a true state, such a plan seems like a good direction for the EU to continue pursuing. It should be obvious to anyone that the Recovery Fund emphasises the parlous state of affairs all the nations in the EU have arrived at, and Italy in particular. They have emphasised their servitude by signing up to an enforcement mechanism to make sure they’re not too independent in its allocation. Meanwhile Italy is piling up debt and the handout from the EU will end up adding to the agony. This hopping on a gravy train is an Italian trait. Who remembers that financial wizard Draghi’s Quantitative Easing Programme that has left Italy’s Central Bank still holding on to 400 billion of debt? You haven’t? Never mind, you’ll be hard pushed to find a Tuscan who does. It’s as though these are phantom figures lying idle in a mythical place which will never come home to roost - just like the Recovery Fund!

But all is not yet completely lost if Italy could only gain a government that doesn’t love playing to the crowds like Mussolini used to. But then, one supposes it’s in their blood. What the country actually needs is a massive overhaul of the political system that materialized after the war. It could be done by the simple idea of allowing ‘Democracy’ to be established – that is to form a government in which the sovereign power resides in the people as a whole, exercised directly by them or, because this totally impractical ideal is impossible in a modern society, by their elected representatives. There is no need to eliminate the present political parties, only change the law to make the party candidates stand for election in fixed constituency’s so that the majority will of the people has real meaning capable of being pursued by their own parliamentary member, and not by leaving it in the hands of some sycophantic place man. In the UK the member of parliament is there to fight your corner no matter which party you voted for. It's an idea Italy could well introduce to their benefit. At least the people would then have a better idea of where the money’s going having a personal politico to answer such questions, and even to raise them in the Chamber of Deputies. In direct comparison to that bumbling, exorbitant House of Lords in the UK, the Italian Senate shouldn’t be filled with political time servers at enormous cost, but experienced professional people from all walks of life, elected by parliament, who can add reasoned arguments to political affairs. Naturally, this has little chance of clearing the political hurdles – not while Italian MP’s enjoy the highest salary in the EU of 167,000 euro’s a year – before expenses! Don’t rock the boat.

Of course, they’ll tell you, all this will cost a lot of money, and for that it’s no good going to the EU cap in hand. Italy is trapped like the serfs of old with not a real bean to their name:

“No!” Monte dei Paschi said,

“You’re in the red.

Try Deutsche Bank instead!”


(“In the Red” is a brilliant Black Comedy made for the BBC in1998, starring Alun Armstrong, Richard Griffiths, Stephen Fry.

If you’ve got it in for bank managers, this is for you!)