Link between economic and political union. The current state of Economic and Monetary Union (EMU) is far from encouraging and we can understand Jacques Delors' disappointment. He had been the prophet behind this project as well as its initiator. If, however, current developments are compared to the previous long-term blockage in the economic field, we can see that progress has been considerable. How many times have Germany and France being criticised in the past for not respecting EMU rules on the budget deficit? These two countries are now demanding that respect for these rules become a permanent institutional obligation for all member states. This orientation is moving in the direction of European economic governance, even though the institutional aspects surrounding the question remain uncertain.
Lorenzo Bini Smaghi, an Italian member of the European Central Bank (ECB) Executive Committee, did not wait for the most recent developments before asserting that “monetary union implies a degree of political union that is much higher than of what the majority of political players, commentators, academics and citizens are aware… The institutional model should be adopted because monetary union is already in itself a form of political union… The political sovereignty of states exists insofar as they feel responsible for a public good that covers the entire eurozone and provide it with the instruments, decision-making methods and resources to operate.” Mr Bini Smaghi anticipated the shift towards strengthening European economic governance, which has ultimately been accepted and which will help to provide an on-the-ground check of what countries and what people are effectively prepared to fully participate in the eurozone by respecting its rules, and what kind of political forces they want in this respect. The Franco-German initiative, aiming to clarify and strengthen the way in which this burgeoning governance operates, goes in the same direction. It has, however, sometimes been badly understood and sometimes subject to criticism, without the institutional procedure in which it is located being taken into account. This column will be returning to this neglected or forgotten ongoing development.
Positive spin-off of exposing public spending abuses in Italy. One of the aspects of the events involving Italy (ECB letter to the government in Rome; development by the latter of a return to budget balance in two years) has often been neglected. I am referring to the immeasurable advantage that Italy enjoys from the fact itself of being involved in this difficult balancing exercise (it has still not been completed because the parliamentary debates are still continuing). The country as a whole is therefore engaged in an exercise to identify waste and expose anomalies in public spending. The scale of abuse observed is astonishing and poor management of national resources, at all levels, including regional and local levels, has gone beyond all expectations.
Let's not be naïve: we are not witnessing the sudden and unexpected birth of a sense of national civic awareness that has been hidden or ignored until yesterday. What in fact is happening is that each category is aiming to shed light on the misappropriations committed by their respective counterparts and subsequently avoid being subject to any cuts themselves, which from their own point of view, would be unfair. Several exposures and journalistic investigations have confirmed the number and extent of unjustified expenditure, tax evasion and other abuses. Spending cuts would therefore be both justified and possible.
Abuses committed by the political class and others. A broad segment of public opinion considers that the first round of spending to reduce would be that of the political class itself, whose costs are absolutely shocking. The Italian parliament is the most expensive of all national parliaments in the EU. Confronted by the highlighting of these abuses, its parliament has made a commitment to getting rid of some of the areas where this abusive use of spending is taking place. A more radical cure, however, could be envisaged - reducing the number of parliamentarians by half. This idea is seriously being considered by the different political forces. To begin with, a huge cut in funding and other subsidies to the political parties and their press organs is being planned.
The second area of scandal denounced involves certain pension questions - women retiring at 30 years old, half a million pensioners who received a pension at 50. In certain regions, persons with disabilities (but who are not really disabled) as well as those categorised as blind but who are, nonetheless, able to drive, are countless. Another aspect directly involves the EU - the inability of several regions to appropriately use Community funding and the absence of appropriate projects or the inability to carry them out.
I have mentioned a few of the most spectacular and striking examples but the analysis has in fact been both broad-based and deep (for some aspects it is also controversial). As a result of this analysis, “European economic governance” can help to improve and modernise the way things are managed in Italy by helping it to get rid of these abuses and put an end to the wastage committed. If it does not have the political will to do this, its participation in the euro will be in danger. (F.R./transl.fl)