Economy / Opinion

Economic Data Show Italy Cannot Wait – Fabrizio Forquet

06_4_are_f1_86_a_resize_526_394The difference between the real and the legal country belongs to Italy’s DNA. The country’s unitary government was created late and had weak, nonmajority institutions that were disconnected from its citizens. But in a day like yesterday, that distance has widened and turned into an abyss—a black hole that could swallow up the future of the country.

In the Senate and the House, political dynamics went around in circles, after votes that could not possibly have a positive outcome and in particular as parties were divided by lack of communication and by an unprecedented ill feeling. Outside, in the country, 3,749 Ilva workers were temporarily out of work, and shop owners reported a 50 percent drop in the openings of new stores, while data showed that the GDP declined.

The perception of the possibility that the economy could experience an unprecedented fall was never as acute as it is today. That feeling is confirmed by industrial production data, which in February fell 25.1 percent compared with the prerecession period. Car registrations dropped to the levels of 1969; 70,000 manufacturing companies were eliminated between 2007 and 2012. More than 220,000 jobs disappeared in November, December and January alone. Youth unemployment was above 38 percent. Families saw their per capita income drop by 3,000 euros and their consumption fall by 3,800 euros since 1997. An additional drop in consumption is around the corner, while recent business orders were in negative territory and a third credit crunch is announced.

We cannot afford, in this situation, to remain without a full-fledged government. Nobody is expecting a miracle. But a government could, for example, unblock at least a portion of the 100 billion euros in credits that the government owes to companies. That would be a crucial breath of air for companies that are suffocating from lack of liquidity at all levels.

That’s why the real economy can’t wait for the legal country. Not because yesterday’s vote cost “420,000 euros,” as the Five Star Movement House Speaker noted (in fact, these resources would be put to good use if democracy worked) but because hundreds of thousands of companies are shutting down, leaving workers jobless as parties are busy with their skirmishes. And this time the Five Star Movement is working within the institutions, not outside them. They are inside, and perhaps the political force that is most actively—and cynically—creating the current deadlock, without showing any responsibility toward the needs of the real country they proudly claim to come from.

@FabrizioForquet

Original article at Il Sole 24 Ore

 

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