The Mystery of the 10 Little Indians

“And then there were none.” When Pietro Giarda said that there will be no small treasure trove to rely upon for reducing taxes—the only certain way to promote growth—my mind went to the children’s rhyme “Ten Little Indians.” How, I asked myself, after having compared the spending review to the last Indian of the bunch, can the undersecretary tell us now that this too “went out and hanged himself and then there were none”? When I saw that Giovanni Majnoni also likened the “killers of growth” to an Agatha Christie title (Il Sole 24 Ore, April 12), I asked myself if there was an unconscious reason for linking the government’s problems to crime novels. I thought that the Indians could represent things the government should but can’t do and that the “crime” was the reason of this impasse.

The reason is in the nature of the emergency, the solution of which is this government’s reason for existence. What is this emergency? The looming financial crisis that could have brought us to an end like Greece? Or the necessity to postpone those elections that the majority of the Parliament didn’t want, considering them dangerous? (I am leaving Berlusconi’s political reign purposely out of this: the people who think this was the emergency aren’t aware that by doing so they cast a shadow on Prime Minister Monti’s impeccable work.) In the first case, the government would have to be similar to Dini’s in 1995—with a tough agenda and the time needed to carry it out . In the second, the analogy would have been with the Ciampi government of 1993, which had to last enough time to lead the boat safely home. Instead, the Monti government has never specified if it was a government built to do or one built to last.

Labor Minister Elsa Fornero and Monti were able to easily pass those immediate measures (pensions and taxes) necessary to give markets (and Germany) a signal that went beyond the crisis. But as far as liberalizations go, the little Indians fall one after another. The measures are either delayed in time (as is the case of Snam Rete Gas), delegated to others (as with taxis), mitigated so as to maintain the yields of the passengers of the Orient Express or, in a sudden surge of decisiveness, oddly quantified (as is the case of professional associations). And even after doing so, the government persists in moving within that culture (or inside the limits imposed by it): the last proof of this is the news of the formation of a “start-up task force.” And this—coming a day after Facebook, a start-up founded in 2004, announced the acquisition of Instagram, founded in 2010, for a billion dollars—is something to think about.

The overhaul of the labor market is emblematic: the step forward everyone was waiting involved the ability of employers to decide their companies’ strategies, the quantity and characteristics of the resources required to carry them out, while at the same time having certainties on the cost they would face in case adjustments became necessary. The government built to do gave signals that it would have been able to get the better of the trade union. But the government built to last can’t risk a confrontation with political parties, and if it has conceded something to one side, it must now do the same with the other. And by doing so, in the end nothing will remain of the true purpose of the reform.

An emergency government has to act on the phenomena peculiar to the crisis. If it is nominated rather than elected, it will have a harder time in tackling the causes behind these phenomena. It is evident that the weakness and short lifespan of the governments of the so-called First Republic are behind our public debt load and that, therefore, it is necessary to modify the electoral law and those institutions usually linked to it. But these are problems that this government doesn’t—and rightly so, we might add—want to tackle. The same can be said about going beyond the European social welfare state, the goal indicated by Mario Draghi. And of the problem regarding the financing of the political parties and the overall cost of politics, but in relation to these last two, a government built to last will rarely have the same detachment.

Now is the time to reveal the little secret in the crime novel. It’s the privatizations—not that they represent a novelty. The theme has already been raised, by Il Sole 24 Ore (January 26) as well as elsewhere. It is an initiative that should be included in the agendas of a government built to do (for its effects on public debt) as well as a government built to last (for its effects on the efficiency of the financial system). In the meantime, the motion that will introduce the balanced budget commitment in the Constitution is in its final phase: it lacks only a second approval by the Senate. Only the deficits of 2012 and 2013 (estimated at 2.5 to 3 percent of GDP) still remain to be financed. With privatizations that might generate 45 billion euros in extra revenues, a significant but not prohibitive sum, it would be possible to start eliminating the necessity to look to the markets to issue new debt. The start of such a program, and the intention to carry it through in a short time, should be sufficient to reduce the volatility of the spreads and the political nervousness that so often accompanies it.

If such were the case, the 10th little Indian has no need to go outside and hang himself. And neither do we nor the government.