Süddeutsche Zeitung on the Campaign Against Italy Nonsense
Nathanael Häfner authored the article, which first appeared in the German newspaper “Süddeutsche Zeitung” here.
Economist Philipp Heimberger criticises what he sees as a distorted debate about the EU. Especially as far as Italy is concerned, one should be more oriented towards facts.
Philipp Heimberger wants to keep a promise. Good living conditions and prosperity, whether in the Uckermark or in the Italian provinces are what many expected the EU to deliver. So far, this has failed, partly because of a distorted debate, says the economist, most recently about Italy.
Heimberger wants to put the debates on a basis of data and facts with a campaign. "If you see the EU competing internationally with China and the USA, we need a strong Italy," says Heimberger. To get beyond stereotypes, one has to face complexity.
The country will receive 200 billion euros from the EU recovery fund. But in the public debate, some doubt that the new Prime Minister Mario Draghi will be able to use the money wisely. The country is said to be too unwilling to reform and it has allegedly been living at the expense of others for a long time. Heimberger saw Italy unfairly portrayed and cleared up seven myths about the southern European country. "Many people who deal with matters related to the economy professionally talk past the facts when it comes to economic issues from time to time," he says.
"Italy is not living at the expense of other countries," says Heimberger. On the contrary, the country has been exporting more than it imports since 2012. Especially because of its economically strong North, Italy is an important industrial power in Europe. Italians are also not wealthier than Germans or Austrians, but they more often own their own home instead of renting flats. However, real estate often replaces the public safety net. And finally, private debt, at 161 per cent of GDP, is roughly on a par with Germany.
Nevertheless, high public debt continues to weigh on Italy. Heimberger sees this as a legacy from the 1980s, a period when interest rates rose strongly internationally. Moreover, with the exception of the crisis years of 2009 and 2020, the budget has always been in surplus since 1992 if we exclude interest payments.
Because of these debts, some are calling for even more reforms. After all, Germany pushed for the Agenda reforms at the beginning of the 2000s. However, different conditions prevailed here, says Heimberger. He sees the euro as strongly undervalued for the German economy, wages for large parts of the population have been stagnating for 20 years. And: No other European country has pushed for more fiscal consolidation than Italy over the last decades. Under the then hopeful Renzi and his centre-left government in 2014, the number of temporary work contracts increased further. Heimberger is dubious about continuing this policy.
He has no illusions about problems in Italy. The banking sector is oversized, and too little industry has settled in the south. In addition, almost annual changes of government hinder the political work. On the other hand, he sees the chaos in Italy often exaggerated compared to neighbouring European countries.
Heimberger holds a PhD in economics and works at the Institute for International Economic Studies in Vienna. Since the euro crisis, Heimberger has searched for economic policy solutions and is still researching macroeconomics in the European context.
He does not believe that the 200 billion euros for Italy from the EU recovery fund alone will be enough. Rather, he says, we need to rethink economic policy more fundamentally so that the EU's promises can also be fulfilled for the South.