Stefano Micossi leaves the management of Assonime after 23 years. His speech, given at the Luiss conference in his honor, clearly highlights the unresolved issues that are blocking the growth of the Italian economy and that political forces should decide to confront.
Stefano Micossi will leave the general management of Assonime at the end of the year after 23 years of service. President Patrizia Grieco and the whole association wished to greet Micossi by organizing yesterday at the Luiss in Rome a conference in which, alongside the illustration of the great progress of the Association of Joint Stock Companies in the last two decades, they have been re-proposed – on the basis of a multi-part essay edited by Luca Paolazzi and unsurprisingly titled “Italy and the thread of growth” – the fundamental themes that Italian society has not yet achieved to address and which are at the origin of the important stagnation of our economy and its growing distance from countries in the rest of Europe. It’s about understanding howpick up the thread of growth“Given that without growth it is very difficult to meet the expectations of individuals and of society as a whole, and in particular to know how best to use the energies of the many young people who do not study or work in Italy today. today. The conference in which the Governor of the Bank of Italy, Ignazio Visco, the President of the Constitutional Court Giuliano Amato, the President of the LUISS Business School, Luigi Abete, took part in some recipes that would allow us to get out of the impasse current. Among these are full membership in Europe, without which we have no chance of growth, and training at all levels to improve the possibility of responding to labor demand and supply. stand out.
In his concluding speech (which we publish in extenso below) Stefano Micossi, after the customary acknowledgments, summarizes the recipe to be implemented for Get out of the crisis. This is a particularly timely reflection when we are in progress election campaign where the parties accumulate the heaviest proposals without ever giving them an organic structure such that it makes them plausible to get us back on the path to growth. Indeed, almost no one cites growth as the first objective to pursue, without which everything else is written in the sand.
The integral intervention of Stefano Micossi: the problems that continue to be postponed
the european program Next Generation UE placed our historical delays at the center of our economic policy, removing the factors that negatively affect growth and productivity: excess bureaucracy, legal uncertainty, the timing of justice, the lack of tangible and intangible infrastructure. We also cannot underestimate the need to develop a plan to contain our public debt, which makes us particularly supervised in the eyes of European institutions and investors. The Draghi government has given tremendous impetus to the spending and reform processes. Significant simplifications of decision-making processes and administrative expenditure procedures have been initiated. Significant reform of corporate crisis procedures has been achieved, albeit after a long and somewhat tortuous process. The important contributions of many illustrious friends for the volume published by Luca Paolazzi – to whom my special thanks go for the initiative – specify the reform interventions that are still desirable in the various areas of the economy and institutions.
Postponed issues: labor and business negotiation
However, some issues are still far from resolved. First, the dysfunction of the labor market continues to weigh on the development of the Italian economy. The Renzi government had tried to tackle the problem with the employment law, but had been unable to fully implement the part relating to mobility to new jobs. Labor productivity continues to stagnate.
Figure 1 shows that wages have often grown faster than productivity over the past (almost) three decades; Figure 2 shows that the problem is more severe in the South, where in fact private investment languishes, while capital and labor tend to migrate elsewhere. Recent studies show, however, that the distribution of wages and productivity presents systematic differences across the territory, discouraging employment and investment. The main cause seems to lie in a dysfunctional wage bargaining system still centered on national sectoral contracts, which do not make it possible to align wages with productivity. The solution can only lie in decentralization of bargaining at company level – an objective shared by Confindustria – but the small average size of companies hinders this transition, because the small entrepreneur fears direct confrontation with the trade union at company level. There are no simple recipes to overcome this problem, but the objective of decentralization must be pursued by opening up more space for wage differentiation. In this respect, it should be remembered that a reform of this type paved the way, in the mid-1990s, for a very strong recovery of the German economy, which at the time appeared to be the major patient of the Europe. Incentives can contribute to this, rather than hiring under unchanged conditions, leading to corporate reorganizations and investments in technologies that improve job performance.
Problems that are postponed: competition in services
A second issue to which attention should be drawn relates to the state of competition. In recent decades, as in other countries, the share of services in the economy has increased, but this has been accompanied by a deterioration in productivity and wages – which are much worse in services than in the manufacturing industry. Poor services together generate poor workers and inefficient rental positions. It is a question of competition. Italy does not apply the Services Directive and the results are visible. The problem is not taxi drivers, of course, but distribution, professional and financial services – where, in fact, the strongest actors, when needed, come from outside. The problem has a political dimension that is not easy to address, because increased competition in services affects people more directly – and a weak political system is unlikely to increase competitive pressures on people. It remains that it is a central point for shifting growth and productivity.
Reported problems: the management capacity of the public administration
Third, the public administration continues to lack management capacity, while the attempt to focus on service to the user has repeatedly failed. The proliferation of cases of Corruption has tightened the management rules and the control system, making decisions difficult, without solving the main problem – which stems from poor political interference in spending decisions and management choices. The multiple attempts to dismantle the system of municipal subsidiaries, by applying European principles on the boundaries between public and private, have essentially failed. This government tried to take the bull by the horns, and all the credit goes to Minister Brunetta, which has launched courageous initiatives to improve skills and make public administrations more efficient. It remains to be seen whether the new government that emerges from the elections will want to continue down this path – again, tackling the necessary unpopularity.
Taxation: complex and distorting
A problem within the problem, in improving public administration, concerns our tax system, which is extremely complex and distorting. Each year, the budget law aggravates it in the frantic search for new revenue and, at the same time, in the disorderly granting of tax reliefs and concessions to satisfy various electoral and constituency needs.
The uncertainty of tax relations and the deterioration of relations between taxpayers and the financial administration are linked in particular to certain institutes: the so-called abuse of rights, which the frantic search for income has transformed into a tool of contestation systematic transactions; the existence of a dual “path” for business income which leads to divergent civil and fiscal income; the system of sanctions, infested with excessively punitive rules of a penal nature. The fight against excessive tax evasion continues intermittently, given its “mass” character and therefore the possible strong repercussions of political unpopularity.
The announcement of ambitious tax reform targets resulted in lower personal income tax for the most affected income brackets (between 28,000 and 55,000 euros per year), while d Other interventions are deferred to the implementation of a rather generic tax delegation, in which the objectives of decongesting the constituencies of the parties coexist badly with more systematic objectives of reorganizing the system.
Problems that are postponed: school and research
Finally, the school and research system remains in great pain due to a lack of resources and strong cultural and union resistance to the renewal of programs and competitive management of university and research funds. The school continues to suffer from weak recruitment channels, insufficient training and a lack of careers for teachers to reward their efforts and also develop skilled leadership. The university continues to suffer lack of autonomy individual offices and a consensus system for the distribution of research funds that does not promote the quality of projects. It is unclear to what extent government reform interventions PNRRwhich also have considerable resources (about 20 billion) will contribute to solving these endemic weaknesses.
To foster growth, modernize laws and institutions
Over the past twenty years, the institutions that preside over the functioning of the economy have undergone profound changes. Positive results now include the modernization of the corporate and capital market lawas well as a strong approach to the discipline of competition and economic regulation of network services, with the supervision of independent authorities – mainly on the basis of European law, potentially guaranteeing the autonomy of national decisions from the cycle Politics.
However, as I have already noted, full integration of the service sector he was born in capital market This does not happen; the bodies that were to guide its implementation remained incomplete, starting with ESMA. In the direct investment sector, the problem of national bias vis-à-vis foreign acquisitions remains strong, while the reference regulatory framework, particularly in terms of business mobility, does not yet appear adequate, maintaining ineffective segmentation of the capital market.
Overall, the Italian economy retains great strength, but the institutional framework for business activity is slowly improving and sometimes suffers significant setbacks. It is therefore necessary, looking to the future, to maintain the route of the modernization of the legal and institutional framework for business activity, a primary condition for giving Italy a prospect of sustained growth.