by Rossano Salini* |
Like an unexpected and deflagrating storm, the tremendous worldwide wave of the Coronavirus has hit our country with such firepower that it has changed our daily lives and severely affected our economic fabric.
Italian businesses are therefore facing a serious crisis, especially a financial one, which takes them back to the black period of 2008, if not worse. In a situation in which citizens and businesses are overwhelmed by such a sudden and disruptive event, it is absolutely essential that all the tools needed to make the effects of the crisis less devastating are put in place and implemented intelligently, promptly and courageously. Instruments that, for obvious reasons, are in the hands of States and supranational bodies. The presence of a strong, secure leader capable of making the right decisions is more necessary than ever at such a dramatic juncture.
Who pays for it?
It is therefore regrettable that no trace of such a guide has been seen in the weeks of turmoil surrounding the spread of the Coronavirus.
Neither in Italy nor in Europe. The actors who should have intervened to provide security and support proved to be not up to the situation, and not capable of immediately implementing the necessary actions, in particular to support the economic and entrepreneurial fabric.
None of the three indispensable virtues mentioned above were seen: intelligence, speed and courage. In fact, the seriousness of the situation was not understood from the outset; action was slow, being preceded by events rather than anticipating them, despite the fact that there was the possibility of building on what had already happened in China; finally, there was no courage to take decisions that were as tough as they were necessary, for fear of not being understood. They preferred to let the situation worsen, so that no one could question the appropriateness of their decisions.
These are all mistakes that are made when one has the problem of not eroding consensus, instead of doing what is in the supreme interest of the citizens. And mistakes, it must be added, that have been made by all the political leaders of the European states, without exception, and not excluding above all the European institutional bodies, in particular the Commission and the European Central Bank.
After hospitals and the entire health sector, which has been put under immense strain during this period, it is mainly businesses, starting with small and very small enterprises, that are paying the price for this situation of uncertainty. In other words, those economic players who have no cover behind them, who find themselves struggling every day to make ends meet, with mortgages, current expenses and taxes to pay, and who in a situation of almost total blockage of economic and working life risk reaching a financial deadlock in a matter of weeks.
The absence of liquidity
Beyond the culpability for allowing the virus to spread like wildfire, the first decisions taken by the Italian government to support the country's economic fabric went in part in the right direction, especially from the fiscal point of view.
However, there is one important piece missing, which the Italian government should address, in agreement with the European institutions of course, and that is the problem of liquidity. The element from which businesses, especially small ones, suffer most at a time of labour stagnation is the lack of liquidity and the impossibility of obtaining it through credit institutions, given the restrictions imposed by the Basel agreements. Intervention would be needed more than ever to temporarily waive these constraints, so that businesses could not only postpone payments and tax deadlines, but also have access to money on favourable terms, as a lifeline to get through this delicate phase.
The European attitude
In agreement with the European institutions, it has been said. And here a few words should certainly be spent, to stigmatise a European attitude that has really left much to be desired in recent weeks. Just when it was needed, and when Europe should have clearly shown its importance in terms of solidarity between States.
The Commission, on the other hand, remained silent for weeks on end, only making its own weak voice heard, mostly in terms of communication, when the Italian situation became dramatic and unsustainable. It is not enough to simply allow the Stability Pact to be widened. The point is that the Commission should have made its support heard loud and clear from the outset, with concrete and timely action.
Not to mention the European Central Bank, with the well-known imprudence of its president Christine Lagarde, who, with a single untimely statement, caused the international stock markets, and the Italian one in particular, to experience a day of pure terror. An episode that should make us reflect on the role of the ECB.
There are those who in the past have objected to President Mario Draghi's attitude, claiming that with Quantitative Easing he had forced the role of the body he presided over; but what is certain is that he achieved the unequivocal objective of giving the economy a breather.
And it can also be said that Lagarde has basically done nothing more than remind us that the ECB's role is not to reduce the spread, even if it is wrong in terms of timing and methods. But if forcing a body (Draghi) allows it to do some good, and if making it function merely for its own purposes (Lagarde) creates a disaster, it means that the role of this body needs to be questioned and some serious changes made. But the real problem is that it is necessary to have people at the helm who are not attached to formalities, but to the final outcome of the actions implemented.
A leadership crisis
This brings us back to the starting point: the need for solid guidance. Everything else depends on it. And the essential characteristic of leadership, whether at the head of a political body or an economic institution, is the ability to take decisions. And also to imagine innovative and risky ones where necessary.
Shy and talkative governments, or rigid bureaucrats who think only in terms of procedures and regulations, are the real obstacle to allowing our enterprises to breathe in such a complicated phase as the present one. Economic problems and leadership problems thus intersect within a single general crisis that grips our continent.
While we wait for increasingly incisive action to be taken in the immediate future to support our productive fabric, let us not forget that the central problem of adequate training and selection of the ruling class (which is an educational and cultural problem) remains the foundation on which everything is based. Otherwise, in the next crisis, be it financial, health, geopolitical or migratory, we will find ourselves back where we started. That is, deprived and weak.
* Rossano Salini, graduated with honours in Classical Literature, PhD in Italian Studies, is a professional journalist. He has published articles and interviews in several national newspapers.
