Monday

10th Aug 2020

Opinion

Italy has a responsibility, too

  • For young Italians, it's almost impossible to start a career as a lawyer, notary, pharmacist or even a taxi driver unless they inherit a license from their parents or can buy one from a family friend (Photo: drpavloff)

No country in the EU has suffered more from the coronavirus than Italy.

Although Spain has surpassed it in total number of cases, Italy has had the highest death toll. Its economy is projected to shrink 11 percent this year compared to 8.3 percent for the EU as a whole.

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  • Italian PM Guiseppe Conte argues conditions would "stigmatise" recipients and warns that, if Italy doesn't get what it wants, it would "destroy the common market" - but his government can't even say what it would spend the money on (Photo: © European Union 2019 - Source : EP)

The EU needs to help. And it has.

Italy has been the largest recipient of disinfectants, masks, medical gowns and ventilators donated by EU member states.

Germany, Poland and Slovenia have sent doctors. Austria and Germany took in coronavirus patients when Italian hospitals were overwhelmed.

Dutch researchers processed lung echos to quickly diagnose patients. The European Commission has suspended rules on state aid to allow the Italian government to underwrite up to €200bn in business loans.

The European Central Bank is pumping more than €1 trillion into the European economy in order to lower borrowing costs for businesses and governments.

This has provided immediate relief to Italy's banks, which are saddled with excessive levels of non-performing loans and government debt.

But when it comes to Italy's longer-term recovery, it's not unreasonable to ask it to make some changes to qualify for aid from a proposed €750bn EU fund.

Economic problems

Italy's economic problems didn't start with COVID-19.

The European Commission has advised it for years to invest more in education, improve the efficiency of its judicial system and simplify the tax code.

Year-after-year, Italy rejected that advice. It spends less on tertiary education than its neighbours. Only 27 percent of Italians in their thirties have a higher degree, the second-lowest rate in the eurozone, where the average is 40 percent. Tax evasion is between two and three times higher in Italy than in France, Germany and Spain.

Italy is one of the worst rich-countries to start and run a business in, and the time and effort it takes to enforce contracts and resolve bankruptcies in Italy's slow courts, where cases can drag on for years, is a major reason.

Poor availability of credit and excessive licensing requirements are two more.

For young Italians, it's almost impossible to start a career as a lawyer, notary, pharmacist or even a taxi driver unless they inherit a license from their parents or can buy one from a family friend.

These factors conspire to drive a lot of economic activity into the informal sector and deny young Italians job security. Just 45 percent of Italians under the age of 30 had a job before the pandemic, compared to a eurozone average of 63 percent. Nearly eight-out-of-ten of those could only find part-time work.

The current government, led by Giuseppe Conte, hasn't helped by passing a €20bn tax-evasion amnesty and overturning the labour reforms of the last centre-left government, which introduced a new type of permanent contract to close the gap between insecure part-time work without social benefits and impossible-to-break full-time contracts with generous benefits.

Even those reforms did not apply to anyone in work. At the insistence of the trade unions, they only applied to new contracts. Hence their short-term effect was limited, which Conte's government used as an excuse to cancel them.

Blame Europe?

Rather than tackle these problems, which would mean taking away some of the security and wealth of incumbents and the well-connected to give younger and entrepreneurial Italians a chance, Italy's politicians blame outsiders.

They accuse Europe of "abandoning" Italy in its hour of need and call on the EU to "take responsibility".

They said the same thing during the migrant crisis. And during the euro crisis. Italy is always the victim. Northern Europe, which would rather Italy took some responsibility for its problems before asking for help, is always at fault.

Conte insists he will not accept a "weak compromise" on the recovery fund. He argues conditions would "stigmatise" recipients and warns that, if Italy doesn't get what it wants, it would "destroy the common market."

But his government can't even tell what it would spend the money on.

One of the two ruling parties, the Democrats, wants to invest in infrastructure. The other, the Five Star Movement, argues for tax cuts.

Little wonder the leaders of Austria, Denmark, the Netherlands and Sweden are unwilling to sign off: they're not going to give money so the Italians can fund a tax cut in the middle of an economic crisis.

Yet it's them Italians blame, not their own leaders.

Years of blaming Brussels have turned Italians into one of the most Eurosceptic people in Europe. Just 38 percent told Eurobarometer last year they had faith in the EU.

Only the British, French and Greeks trusted the EU less. Italians were more likely than most to cite unemployment as the reason, even though that is still largely the preserve of national governments. 28-percent supported leaving the euro, the highest rate among eurozone nations. Italy is the only country in the EU where the young are more Eurosceptic than the old.

Italy's politicians are failing the next generation of Italians. They need to stop demonising the only countries that can - and will - help Italy and resist the temptation to enact more stop-gap measures that only perpetuate the inequalities and inefficiencies that hold the country back.

Author bio

Nick Ottens is the founder of Atlantic Sentinel, a transatlantic opinion website, and has written for the NRC newspaper in the Netherlands, the Atlantic Council's blog, World Politics Review, and various other publications.

Disclaimer

The views expressed in this opinion piece are the author's, not those of EUobserver.

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