Thanks to my friend Mathew Rose, uno strano americano a Berlino.
Interview with Sergio Cesaratto: Draghi and the Italian Melodrama
Brave New Europe, February 7, 2021
Cesaratto is Professor of Growth and Development Economics and of
Monetary and Fiscal Policies in the European Monetary Union, University
of Siena. Many of the topics of this conversation are developed in his
latest book: Sergio Cesaratto, Heterodox Challenges in Economics – Theoretical Issues and the Crisis of the Eurozone, Springer, 2020, http://www.springer.com/9783030544478 that will be reviewed on BRAVE NEW EUROPE in the near future.
Can we say that the “Vincolo
Esterno”, the neo-liberal EU straitjacket Italy’s oligarchy and
technocrats imposed on their nation, has failed or has it achieved the
success they sought – or has it done both?
Both. It succeeded in the sense that
an icy discipline descended on the working classes, trade unions and
fiscal policy. It failed in the sense that discipline brought with it
the stalling of growth, later aggravated by the 2008 crisis and the
pandemic. Many foreign readers do not know that Italy has a record of
discipline in public accounts, measured by budget surpluses net of
interest expenditure, unbroken from 1991 until the pandemic. This,
together with the loss of a competitive exchange rate, has led to
stagnating productivity and growth in Italy since 1995. Public debt was
reduced from 120 to 100 % of GDP before the 2008 crisis. But at a very
high price (cuts make growth less and nullify the budgetary effects of
cuts in a Sisyphean effort). No country in Europe has been as frugal as
Italy (read https://www.ineteconomics.org/research/research-papers/lost-in-deflation). Moreover, private debt is very low in Italy, Italian households are also frugal, contrary to what is portrayed in Northern European media.