C. Bastasin, M. Mischitelli – The Imaginary Growth: The hidden illness of Italian economic policy
Since the end of September 2018, the Italian government has been involved in complex negotiations with the European Commission to avoid an infringement procedure for excessive deficit in relation to the debt rule. The talks have led to a radical reflection on the relations between the Italian government and the European Union. After the relationship evolved from one of antagonism to one of cooperation, a compromise was reached (at least for now) and Brussels implemented measures on Rome that are less penalizing than the ones that would have been implemented through a long and harsh procedure.
Nevertheless, in this Policy Brief we raise the question of whether the negotiations are indeed dealing with the real defect in Italy’s budgetary policy, which, with small yet significant exceptions, seems to be rooted in the country’s political culture. In the following considerations, we will note that ever since Italy joined the Economic and Monetary Union of the European Union (EMU), Italian governments have systematically planned their budgetary policies on unrealistic growth and debt estimates. This defect concerning the “ownership” of the estimates may be related to the problem of the governments’ brief duration, but it actually seems to be rooted in a political mentality that manifests irresponsibility for the consequences of one’s own choices.