Vincenzo Boccia, the only Italian leader
In a country that is no longer creating leaders that make the grade, the President of Confindustria seems to have – perhaps the only person in Italy – a long term vision for a competitive and modern Italy. But also a few ideas about the next budget
- Sunday, 14 July 2019
When a president of Confindustria, the Italian industrialists' association, speaks of a "country project", half of Italy cringes, obsessed by the fear of 'the powers that be' and a lingering classism (on the right and left) that is still pervasive in Italian society. With this exclusive interview, we aim to provide an outline of the views of a man who cannot be easily pigeonholed as a representative of 'the powers that be', neither in terms of his family or personal connections, or by what he says and how he has engaged in his role ever since the first day of his four year mandate. He has always worked as a partner with government, and is aware of his responsibility as a representative of his country's top management.
Let's start with Europe… after the elections: we have a pro-European majority, but we certainly can't just tread water for the next five years. What are the avenues that can provide a boost to the integration process so that it may have a strong and positive influence on everyone's lives?
Firstly, are we very clear about the challenge we are facing? Let's look at the next thirty years: the forecasts say that between 2035 and 2050 no country in Europe, Germany included, will be part of the G7. The countries with the strongest economies will write the rules: as a united Europe we would be top, as separate European countries we will no longer be part of the G7. If we have to face the challenges of the future alongside major powers like China and US as individual countries, we've lost from the outset. So, what should we do? Firstly, engage in reforming Europe. Jettison Europe's tactical approach, is the message we forwarded in February 2018 to the Italian parties who were standing to lead the country. Revive the missions, which are fundamental to Europe, these being, peace, security, prosperity, major objectives. Can a Europe be created that meets the expectations and requirements of the young, employment, corporations and infrastructure? Can we build a transnational European infrastructural network that can generate construction sites, employment, development and links between European countries? Europe is the top exporter and the top importer in the world, the third richest population and the richest market in the world. Are we aware of this as Europeans? The Silk Routes aim to reach out to Europe and should be conceived as two-directional highways… But it's up to the Europeans, and particularly Germany and Italy, the first and second manufacturing countries in Europe, to lead the way. Therefore, missions are the starting point and public opinion must be informed about Europe's major objectives: building a new European dream. I was struck by what President Mattarella said in his end of year speech: "Concepts such as dreams and hopes should not be the sole preserve of childhood". Europe needs a new spring, a new dream, not just the guarantee of peace, as was the case after WWII. Recalling the Italian Constitution, we could dream of a Europe founded on work and employment for the young, but for this to be the case we must understand that it's not a question of European countries challenging each other, Europe as a whole must face off against the rest of the world. And the way of thinking has to change too: the stability and growth pact should instead be a growth and stability pact. We can no longer rely of balanced budget policies that do not take into account how they impact the real economy. This means identifying instruments, proposals and resources once Europe's common goals have been established, not the other way around. And let the people have their say. If we discuss European governance without discussing the goals, people don't understand.
The new narrative – which we are trying to establish with all European industrial associations – would help the individual countries not to use Europe as a foil. Half of Europe uses the European issue as an alibi to avoid confronting national problems. So Europe ends up being blamed for everything. The truth is that in Europe one can find solutions, provided a reformist outlook is adopted.
In discussions between us and the French industrialists a few weeks ago, the need for a French-Italian-German alliance was very apparent. With the United Kingdom leaving, Italy can play a major role along with these two other countries. But it must not cut itself off or be isolated. We must remember that Draghi is at the ECB thanks to an Italian-French agreement; now Draghi's mandate comes to a close and it would be advisable that the governments reach an agreement to select European Commissioners that can boost Europe's future. It's important to separate party platforms from the roles played by government and economic diplomacy: it's in Italy's interests to have a close relationship with France, which is our second largest trading partner, Germany being the first and the US the third: out of 550 billion of Italy's exports, 12% we send to Germany, 10% to France and 9% to the US. Where European competition is concerned, should the Commissioner defend competition between states or help to build large corporation that can allow Europe to compete with China and the US? Competition law needs revising, with a view to building European multinationals, the evolution of Europe's three major manufacturing powers: Italy, Germany and France, followed by Poland and Spain. Italy can play a major part. We have seen that within our associations: Italy, by backing France or Germany, decides which country prevails politically and in the balance of European Governance: when Italy backs France, the French-Italian agreement prevails, thus Draghi got the ECB job, just as a French person may be appointed to the ECB next time round, without in any way isolating Germany. In automotive production, the Italian industry has close links with Germany: when the German car industry slows, so does Italy's. A German car can be up to 70% Italian, and when President Trump says he wants to see less German cars on US roads, he's protecting his own industry not just against the German one, but against the entire European car industry. Italy and France come into play in the luxury, fashion and the food industry. Italy holds a central position in terms of industrial size as well as in a political and geographical context. It must be aware of the fact: as we mentioned in our comment to the Economic Planning Document (DEF), together with the French Commissioner, the time has come for Europe to become a political giant, not just an economic one. Europe's economic and industrial sectors are asking the government to meet this challenge. A politics without vision, without a dream, is without hope. We are Europe. We are the ones who will change Europe for the better, with the choices we make today. And Italy needs to be in Europe because 250 out of the 550 billion of our exports flow into the European domestic market.
Let's take a second to look at China. Xi Jinping came to Italy and there is much debate surrounding a possible alliance with China on the gargantuan "Silk Road" development project. The American president, for his part, is engaging in a furious trade war with China, with no holds barred, and seems to be asking Europe to choose: whether to side with China or the US. Are we forced to choose? They look to me to be different playing fields, where we can have different roles…
The choice is between life and death. In a multilateral world, we can't afford the luxury of choosing, especially if the motivations are primarily political. Jean Monnet used to say: "My objectives are political, my reasons are economic". It would have certainly been better if participation in the Silk Road project had been part of a European negotiation, so that expectations and balances could be handled better. For example the Italy/China memorandum opens very interesting horizons, but it does not address strategic axes such as infrastructure and technologies, which in any case need protecting, ensuring they remain country assets. On the other hand, we are clearly open to the world, the Chinese are growing and looking for niche markets, where Italy can play a part. Economics and politics are never too far apart: we have a natural multilateral vocation, just as it is undeniable that we are a major democracy and have long standing relations with the US, without these ever being exclusive. In Confindustria we were critical of Chinese investment in Italian ports, not because we had anything against China, but because we believe the relationship should work two ways. However, much like your magazine, we are in favour of an open vision, and strive to build a country and an industry that are so powerful that they need the world. And of course we can't go along with any kind of tariff policies…
An economic policy question concerning Italy: as we mentioned earlier, our budgets have limited resources, and one gets the impression they are none too effective. if you had to choose three economic policy priorities, what would they be?
Infrastructure, credit and growth. Where infrastructure is concerned, funds have already been allocated that don't increase the deficit, don't increase public debt and, if we used them to open construction sites right away, this would translate into employment, and also build on the idea of an inclusive society, because these works would connect the regional areas with the centres. On credit: public administration payments, security flows, and not just listed ones but also for SME's (with real estate collateral); increase in the resources available to the guarantee fund. These are measures, some of which are at no cost and others involving small capital outlays, that have an impact on the real economy. Third, a focus on growth and investments, starting with the use of the structural cohesion funds for the South of Italy. This focus also fulfils the 'reward' logic behind Industry 4.0, a part of which has been ring fenced by this government but could be speeded up. Let me explain: providing for hyper-amortizations and super-amortizations means reducing the tax burden for anyone investing in the country. And I would like to add: we have to reduce Italian company's digital divide, because the digital universe provides a window onto the world for Italy's small, medium and large industrial concerns. These are solutions that have little impact on the deficit but have positive repercussions on the real economy. If we had to imagine an economic policy, it would hinge on these three axes.
Our relationship with France. We've just weathered a serious crisis, which Confindustria helped to overcome: was it nothing more than a political-diplomatic crisis, which could be solved by mediation and common sense, or are we faced with structural competition between the two major manufacturing industries, which have a hard time talking to each other and finding common ground?
There are many areas where we can potentially work together. There are clearly other segments where we compete and we each play our hand. Minister Di Maio's decision to meet with the 'gilets jaunes' heightened tensions between the two countries, but now it's in the past. At our bilateral meeting, the Finance Minister Giovanni Tria came to France and before going to Paris, I had a chance to speak to Di Maio and he authorised me to pass on a message to our French colleagues: let's settle our differences. President Mattarella, with our support, has helped to smooth out relations between the two countries. It's in the interests of both. What are Italy's or France's policies on industry and agriculture? And how will the appointments to the ECB and the key Commissions work out? Party platforms should not interfere with these issues which call for responsible choices. In certain areas we are certainly competing but in others we are part of the same production process: true enough, the French have bought up many Italian companies but it's also true to say that many of those production processes have stayed behind.
One last point: Friday for future saw a very young generation hit the streets on a global scale throughout the West. As some have pointed out, it's the first time since '68 that a youth movement has gathered such consensus, beyond ideological barriers, in support of an issue, climate change, that is clearly a global issue, that cannot be confronted at a national level. Do Confindustria and Italian industrialists, who discuss matters with the industrialists in the rest of the world, feel they are ready to meet this challenge? Or can they go one step further?
Firstly, I have great respect for these young people. And the answer is yes. Those who are culturally more advanced are also further along the path towards sustainability. These youngsters are asking that the future be respected, and seeing as they are the consumers of the future, they will force companies to adapt to market conditions, because they are discerning consumers and worry about sustainability. So we have two ways forward: one is cultural, and on this front the industrial associations have a great responsibility to build a learning and didactic context for the new world. Attention must be paid to context and society. Confindustria's economic thinking revolves around the concept of a future society, both in terms of hardship, balance of power, development, putting people above all else, respect and economic sustainability of the environment. And those who can't embrace the culture, will be forced to by the market: these youngsters are clients, the consumers of the future, and they care very much for the environment and are issuing a strong warning regarding respect for sustainability. We would like to add that sustainability is also economic: is spending merrily and increasing public debt sustainable or is it damaging to future generations? Clearly European and Italian industries must accept this challenge, and many companies have already signed up to this system, they are compliant in every respect, others are moving in this direction and others, slower on the uptake, will be forced to by the market.
Confindustria is therefore taking on a role of situation analyst, and attempting to come up with an agenda for the next twenty years. With ideological barriers now overcome, discussions between political and production centres should be less fractious and together they may find the right drivers for growth, development and employment. These involve innovation, mobility accelerators and solidarity incentives, triggering a process that is primarily cultural, and must therefore involve wide-ranging reforms that can renovate our Academies and the learning processes for our young citizens.
Thank you President Boccia, for what we consider to be your political legacy, with your position up for re-election less than a year from now.
This article is also published in the July/August issue of eastwest.