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Attività

Modernizing Italy

    • Rome
    • 5 March 2008

          The main cause behind Italy’s blocked growth is the Italians’ approach to asset management: they tend to hold tight to their patrimony and not help wealth circulate. How to overcome this obstacle? A bipartisan approach would help, but it might not be enough. Today, after all, both protectionist and liberal tendencies coexist – concentrating solely on opening up markets seems to be a thing of the past, yet pure protectionism would only make changing the system more difficult. Taking away privileges and veto power would lead the administration pushing for structural reform into conflict with the various categories of professionals. And if the opposition latched on to such resistance, reforms would become impossible. So action must be 360 degrees, involving all categories. But better to launch such action before or after elections? To call for a bipartisan commitment against the Italian system of handling assets after the elections demands quite a sense of responsibility because the losing party would have to support the winner’s reforms. It would be easier, perhaps, to work on reforms before elections, when either party has less to lose. A parliamentary office should be identified to evaluate how best to launch reforms, a place where all parties can have a say in the reform process.The “Attali Method”, in this sense, might be useful to define an agenda in resolving current problems. It can influence those who are in government as well as those who have agreed not to oppose reform. Worse than the current Italian approach to asset management, nevertheless, is the system which makes such an approach possible: all those norms that authorize before, during and after wealth accumulation, and that are often contradictory. The economic apparatus makes accountability and transparent decision-making difficult. The powers that be worry too much about personal prestige to make those tough decisions necessary for the general good. They get bogged down in details to the point of rendering the assumption of true responsibility impossible.If it is true that the mother of all asset management systems is indeed politics, with its formal procedures, the most worrying thing is that link between great political wealth and weak sectoral wealth. In this context, the average citizen’s outrage at the costs of politics, while understandable and even healthy, hides some serious risks. For an economy to grow, the state behind it must be strong, not weak.To modernize Italy, rules must be clear and risks must be assumed. Not only is the government responsible for this, but businesspeople, who often tend to play it safe. The country’s leadership must act, and reinforce its decision-making processes. It must also deliver on its promises.

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