TURIN. «Italy needs more Europe and knowledge to grow. In the face of global challenges, a greater effort is needed.” The honorary governor of the Bank of Italy, Ignazio Visco, is in Turin for the International Festival of Economics. The final day of the event opens with the warnings of the central banker, who speaks on a broad spectrum of the vicious circles that are holding the country back. «The problem of missing growth is crucial, we need to invest in knowledge», explains Visco. «Human capital must be valorised and we must focus on research and development», he highlights, underlining that we must no longer waste time.
The goal is to close the gaps with the rest of Europe. Which are many, numerous, profound but not unsolvable. The title of Visco’s meeting with the Festival leaves little room for optimism. The “vicious circle” that Visco talks about at the Risorgimento Museum is significant. «If you don’t grow you don’t make investments, therefore you don’t increase productivity», points out the honorary governor of Via Nazionale. There is a bit of bitterness in Visco’s words, who more than once points out that for too many decades people have been discussing how to improve knowledge, and therefore education, without success. «You can take resources from savings, or from abroad, but you need an environment that is attractive. To do this you need to have human capital and therefore knowledge”, he says.
According to Visco, there are few simple solutions. «To be able to grow you need knowledge. Unfortunately in Italy there is a medium-low level. Just look at the graduates. Therefore, if human capital is low, investments must be increased.” However, the starting point is lower than in other countries. Therefore, we also need to think about a new “social pact” between businesses and workers. Visco’s reasoning is simple: «Companies have imperfect information and believe that Italian human capital is low, so they offer low wages. If these are low, then the economic agent must make choices.” And in this case the decision is whether to graduate or not, whether to train or not. «In Italy there is little understanding that studying is good for you», says Visco with more than a hint of annoyance at the current situation. “There is a problem of models. We favor those who have not succeeded through knowledge, but we rely on ephemeral models. Not everyone can be a football champion or famous entertainer,” the central banker remarks.
The problem with investing in knowledge is in the data. «Not only are there few graduates, but the number of graduates is also low, if we look at the OECD averages. Not least, school dropouts are still a significant phenomenon today, especially in the South. Finally, we have a huge issue of NEETs (Not in Education, Employment, or Training, i.e. kids who don’t study, don’t work, don’t train, ed.), which is really worrying in the South”, says Visco. Which debunks some myths that politics often hides under the carpet: “We have around 40/50% of children who have no basic knowledge of mathematics, and in the South this value is even greater.” It is therefore not surprising that many young people decide to evaluate radical options.
From this perspective, there is a fact that worries governor Visco. And the audience doesn’t hide their amazement when he says it. «One million Italians have gone abroad in the last ten years and changed their residence. But then there are all those who haven’t done it”, he explains. To reverse the trend, he points out, “incentives are not enough” for the so-called re-entry of brains. «We need to have a quality offering. And in Italy we still need to work a lot on this side”, he says. At the same time, there is the other issue. «The social elevator has stopped in Italy», he states, and to restart it we need to invest more, but with reason and foresight.
It is important not to do it incorrectly, following the sirens of politics. «Bonuses are useless, we need to push for permanent growth, not just short-term growth. Bonuses weigh down the public debt and do not allow resources to be freed up for “good” spending. The citizen’s income had distortions but it is a useful tool”, underlines the economist. Which also takes stock of one of the most discussed measures of recent decades, which risks costing Italy over 220 billion euros. «The Superbonus is a poorly managed problem with unevaluated macroeconomic consequences, as is the total impact on public debt. We must remember that free meals don’t exist”, thunders Visco. A peremptory message that the political class will have to remember in the coming decades.
On the birth rate front, however, he returns to the words of his successor, Fabio Panetta, when talking about migrants. And he takes stock of the near future, with a not-so-concealed criticism of today’s discussion. «Very often we talk about immigration only in political terms, but we need a program to better manage the flows, as Japan has done on the demographic front», he explains. Global fragmentation scares Visco, because Europe will experience waves of economic migrants in the coming decades, who will have to be managed and integrated as best as possible. Not only for the good of Italy, but also of Europe and developing countries.
