Sunday, 27 June 2010

The Sorrows of Young Businessmen



[Edoardo Montenegro, Turin] - Ordinary laws are needed to improve the ease of doing business in Italy.

According to the World Bank, Italy ranks 78th within the OECD for the ease of doing business (1). If you want to start a business in the food industry, you apparently have to deal with 20 different offices to comply with a stunning 71 procedures (2).

To tackle the problem, the Italian Government aims to reform Article 41 of the Constitution (3): "You are not supposed to untie the Gordian Knot, but to cut it with a sword" explained Giulio Tremonti, the Italian Minister of Finance (4). Renato Brunetta, Minister of Public Administration, was more explicit: "Why should we keep on defending an old fetish?" (5). Referring to "common good", "planning" and "controls", Article 41 would be a 'soviet' inheritance (6).

Yet the first paragraph of Article 41 seems unequivocal: "Private economic enterprise is free". Does it sound communist?

To begin with, between 1948 to 1969 Article 41 did not prevent Italian businesses from growing steadily in a context of low wages and self-financing. As explained by Fabrizio Barca, an oppressive regulation developed owing to the lack of specific market reforms (7), rather than to constitutional limits.

Secondly, the worst scores highlighted for Italy by the World Bank refer to "paying taxes" and "enforcing contracts" (8). Reflecting over the same results, Mario Draghi recently outlined four priorities: reducing the time of justice, cutting the tax burden, fighting the black market, investing on innovation (9).

Last but not least, how can you forget common good, planning and controls? The world financial crisis, climate change and the history of Mafia are evidence of the contrary.

The Italian Constitution is stout. As Stefano Rodotà warned: the heavier is the attack, the stonger is the self-defense (10).

__________

(1) The World Bank, "Doing Business 2010. Measuring business regulations", doingbusiness.org.

(2) Dino Pesole, "La nuova Carta per l'economia", Il Sole 24 Ore, June 18th 2010, page 6.

(3) "Private economic enterprise is free. / It may not be carried out against the common good or in a way that may harm public security, liberty, or human dignity. / The law determines appropriate planning and controls so that public and private economic activities may be directed and coordinated towards social ends." (Italian Constitution, Article 3, 1948).

(4) Aldo Cazzullo, "'Una manovra per la stabilità. Fedele al governo Berlusconi'", interview with Giulio Tremonti, corriere.it, May 31st 2010.

(5) Renato Brunetta, "'Cambiare l'articolo 41 ci farà ricchi'", Libero, June 20th 2010, page 1.

(6) Agostino Giovagnoli, "Articolo 41 e libertà d'impresa", repubblica.it, June 19th 2010. Mr Giovagnoli, Professor in History at Università Cattolica di Milano, actually shows how these references reflect instead the catholic roots of Italian Constitution: "This article, indeed, is by no means 'soviet', while it matches a bright formulation of free enterprise with two catholic values: the defense of human being and the search of common good."

(7) Fabrizio Barca, "Compromesso senza riforme nel capitalismo italiano" (Storia del capitalismo italiano. Dal dopoguerra a oggi), Rome, Donzelli, 1997, page 57.

(8) The World Bank, "Doing Business 2010. Measuring business regulations", doingbusiness.org.

(9) Mario Draghi, "Più innovazione e meno regole per favorire la concorrenza", Il Messaggero, June 19th 2010, page 1. Mario Draghi is the Governor of the Bank of Italy.

(10) Stefano Rodotà, "La Carta svuotata", repubblica.it, June 21st 2010.

Sunday, 20 June 2010

The Death of Italian Trade Unions


(Lodigs, Chaplin eyes)

[Edoardo Montenegro, Turin] - 5,000 FIAT workers will be asked to give up the right to strike on a referendum taking place next week.

FIAT will invest € 700 mln to move the production of the Panda Model from Tychy (Poland) to Pomigliano d'Arco (Naples) in 2012. The Italian plant will produce 270,000 cars a year instead of the current 35,000 (1). As a result, a Panda made in Naples would still cost € 500 to 600 more than one made in Poland (2) but FIAT will thus pursue the aim to keep part of its production in Italy. Working 40 hours a week and 120 overtime hours a year on 18 different weekly shifts (3), workers will be sanctioned if promoting strikes during mandatory overtime (4).

The continuous production FIAT aims to establish in Pomigliano cannot tolerate strikes (5). As Luciano Gallino explained, although price competition is pushing FIAT to make workers act as robots, this lack of alternatives has been determined by the surrender of politcs and law-making (6).

The right to strike is indeed the essence of industrial relations and cannot be violated (7). Only FIOM (8) clearly claimed that this right is not available for negotiation (9). The local branch of CGIL (10) exhorted workers to vote (11), while CISL (12) simply joined Confindustria (13) and the Italian Government in accusing FIOM of extremism (14). As for UIL (15), its leader proudly admitted that the age of "antagonism" is finished (16).

The denial of social conflict humiliates democracy, whose specific role is to regulate it peacefully. As Sergio Cofferati pointed out, in Pomigliano the Italian trade unions are committing suicide (17).

Nevertheless, workers are still alive in Italy as well as in Poland (18). Sooner or later, they will rise again for their rights.

__________

(1) Paolo Picone, "In fabbrica operai già pronti al referendum", ilsole24ore.com, June 15th 2010.

(2) Raffaella Polato, "Dentro la fabbrica senza pace accesa solo 5 giorni al mese", corriere.it, June 15th 2010.

(3) Carmine Fotina, "Fiat sceglie il riassetto hi-tech", ilsole24ore.com, June 15th 2010.

(4) Salvatore Tropea, "Marchionne voleva il consenso di tutti. Ora è tentato dalla soluzione polacca", repubblica.it, June 15th 2010.

(5) Paolo Griseri, "La fabbrica che non spreca un minuto. Così nasce l'operaio a ciclo continuo", repubblica.it, June 16th 2010.

(6) Luciano Gallino, "La globalizzazione in casa", repubblica.it, June 14th 2010.

(7) The Italian Constitution recognizes the right to strike, simply establishing that "The right to strike is exercised according to the law." (Italian Constitution, art. 40).

(8) Founded in 1901 and led by Maurizio Landini, the Federation of Metallurgical Employees and Workers (FIOM) is the metallurgic section of CGIL (fiom.cgil.it).

(9) Giorgio Pogliotti, "No Fiom all'intesa su Pomigliano", ilsole24ore.it, June 15th 2010.

(10) Founded in 1906 and led by Guglielmo Epifani, the Italian General Labour Confederation (CGIL) is the main Italian trade union with an estimated 6 mln members (cigl.it).

(11) Patrizia Capua, "Cgil e Fiom ai ferri corti sul referendum in fabbrica", napoli.repubblica.it, June 17h 2010.

(12) Founded in 1948 and led by Raffaele Bonanni, the Italian Confederation of Labour Trade Unions (CISL) is the second Italian trade union with an estimated 4.5 mln members (cisl.it).

(13) Founded in 1910 and led by Emma Marcegaglia, Confindustria is the federation of Italian employers (confindustria.it).

(14) "Marcegaglia: 'La Fiom accetti la sfida di Pomigliano'", ilsole24ore.com, June 12th 2010.

(15) Founded in 1950 and led by Luigi Angeletti, the Italian Union of Labour is the third Italian trade union with an estimated 1,75 million members (uil.it).

(16) "Pomigliano. Fiom: 'Così non possiamo firmare'", repubblica.it, June 14th 2010.

(17) Roberto Mania, "L'accordo è un suicidio. La sinistra immobile non sa difendere gli operai", interview with Sergio Cofferati, repubblica.it, June 18th 2010. Sergio Cofferati was the General Secretary of CGIL from 1994 to 2002.

(18) "Situation with Panda Production at Fiat Tichy", Pracownik.net, May 30th 2010.


Sunday, 13 June 2010

The Bad Habit of Scapegoating Europe


(fa73, Eyes and Wool)

[Edoardo Montenegro, Turin] - Preserving a different retirement age for men and women keeps sexual discrimination alive.

Starting from 2012, Italian women working for the public sector will retire at 65 instead of 60. The measure has been included in the budget bill for 2011 and 2012 by the Government (1).

The decision, determining savings for € 1.4 bn in seven years (2), followed a letter by the European Commission reaffirming the obligation for Italy to remove any difference in retirement age between men and women working as civil servants, currently fixed respectively at 65 and 60.

The issue had been raised by the European Commission in 2005 and was confirmed by the European Court of Justice in 2008: "Italy has had 20 years to conform to the EU law concerning earning equality between men and women" explained Viviane Reding, the European Commissioner for Justice, Fundamental Rights and Citizenship (3). Refusing to comply with the EU law, Italy would undergo sanctions up to € 0.7 bn a day since sentence date (4).

As a rule, Italian media easily made Europe responsible for this unpopular measure (5). Actually Europe did not set any increase in retirement age for women, but simply asked Italy to make retirement age equal for men and women working in the public sector.

According to the former Employment Minister Cesare Damiano, the measure could be avoided by enabling all workers to decide whether to retire or not up to the age of 70: this reform would indeed allow both men and women to leave at 61 or 62 (6).

As explained by Chiara Saraceno, Italian women suffer heavy employment discrimination (7). Higher salaries for maternity and paternity leaves as well as gender quotas both for the public and private sector are needed.

What is the Government doing to cope with the problem?

__________

(1) Davide Colombo, "Via allo scalone per le pensioni rosa", ilsole24ore.com, June 11th 2010.

(2) Oscar Giannino, "Pensioni, resta il nodo della riforma strutturale per tutti", Il Messaggero, June 11th 2010, page 21.

(3) Adriana Cerretelli, "Dal 2010 pensioni rosa a 65 anni", ilsole24ore.com, June 8th 2010.

(4) r.p., "Rivoluzionata l'età pensionabile. I giovani lasceranno a 70 anni", repubblica.it, June 8th 2010. 

(5) "Oggi il Consiglio dei Ministri discuterà della richiesta di anticipare al 2012 l'età pensionabile per le donne statali a 65 anni, come chiesto dall'Europa", tg1.com, June 10th 2010.

(6) Cesare Damiano, "Pensioni: dal Governo una misura iniqua sulle donne", cesaredamiano.wordpress.com, June 10th 2010. Cesare Damiano was the Italian Employement Minister from 2006 to 2008.

(7) Chiara Saraceno, "Dov'è la vera parità tra uomini e donne?", lavoce.info, January 6th 2010. Chiara Saraceno is Research Professor at Wissenschaftszentrum für Sozialforschung in Berlin.

Sunday, 6 June 2010

Plunging Hands into the Wrong Pockets


(shion kim, controsensi)

[Edoardo Montenegro, Turin] - The Italian deficit-cutting package punishes young people and does not support growth.

Pressed by the financial markets, which are actually looking at Italy as a new target for speculation (1), the Italian Government presented a budget bill accounting for € 25 billions from 2011 to 2012. Transfers to local administrations will be cut by € 8.5 billions, while € 8 billions should be regained by contrasting tax evasion.

As outlined by Tito Boeri and Massimo Bordignon, young generations will bear the heavier burden: recruitments and careers will be blocked in the public sector and structural reforms will be postponed. Besides, school and healthcare will be put under pressure, while the announced cuts on the costs of politics are almost non-existent (2).

Mario Draghi, the governor of the Bank of Italy, recently recalled the urgency of structural reforms the country needs to reestablish economic growth: "The fall in GDP increases the burden of financing the public administration; the costs imposed by tax evasion and corruption become even more unsustainable; stagnation destroys human capital, especially among the young" (3).

The financial crisis should actually be a great opportunity to boost competitiveness and reduce the waste of public money. Antonio Di Pietro, leader of Italy of Values, presented an alternative budget bill accounting for € 33.5 billions, consisting mainly in cuts to the costs of politics (€ 24.75 billions) and including measures to sustain private expenditure as well as Small and Medium Enterprises (4).

Having demagogically abolished ICI  - the main local tax - in 2008 (5), Silvio Berlusconi is now bringing local finance to disaster with an € 8.5 billions cut. Moreover, his undeniable and repeated appeals for tax evasion (6) make his government unreliable on this subject.

How can a government be fair with its citizens if tax dodgers are amongst its main supporters?

__________

(1) Richard Barley, "Italy looks like next target in euro zone", online.wsj.com, June 3rd 2010.

(2) Tito Boeri and Massimo Bordignon, "I veri numeri della manovra", lavoce.info, June 1st 2010.

(3) You can read the Concluding Remarks of the governor of the Bank of Italy at the Ordinary Meeting of Shareholders, held in Rome on May 31th 2010, at bancaditalia.it.

(4) Antonio Di Pietro, "Package on the economy: the alternative", antoniodipietro.it, June 1st 2010.

(5) "Sì a pacchetto sicurezza e taglio ICI", corriere.it, May 21st 2008.

(6) Massimo Giannini, "Evasione, processi e condoni. La 'favola' del Cavaliere", repubblica.it, June 3rd 2010.