An excellent economist, Professor Mario Draghi seems to understand plumbing too. His presidency at the ECB (2011-2019) was characterized as a matter of fact by measures designed to encourage the marketability of European government bonds, and so their liquidity to move outside Europe : in this, proposing not a secondary role for the central banking body, traditionally responsible only for monetary policy, but with the realistic aim of an accredited presence of the currency, and of European Union itself, in the world.

“If some countries can use their fiscal space but others cannot, then the impact of all spending is lower, as none are able to achieve climate or military security.” [1]

Specifically it is about this accreditation  - let’s just say reliability – of all Countries, as well as individual economic entities and up to the citizens of the European Union themselves, where Mario Draghi spoke again after his lecture in U.S.A.[2] last July, with a recent intervention in ‘The Economist’ that was carefully listened to by the president of the European Commission Ursula von der Leyen in view of the next commitments, not only European but also of the individual member states, to the point of deciding to entrust Mario Draghi with an indicative, and therefore planning, synthesis as regard the maintaining of the competitiveness of the European Union in the world.

“If Europe were to federalise some of the investment spending needed for today’s shared goals, it could achieve a similar balance (to U.S.A. – editor’s note). Federal borrowing and spending would lead to greater efficiency and more fiscal space, as aggregate borrowing costs would be lower. National fiscal policies could then be more focused on reducing debt and building up buffers for bad times.”

We are interested in the fact that reliability of individual states in managing their public spending – involving their spending objectives and financing too - is becoming subject of a sanction that we can call a ‘reward’ if this can first and foremost be the credit obtainable by the European Central Bank, and in general with reference to a shared European economic policy.

“More automatic fiscal rules would become feasible, and member states could credibly fail. Such reforms would mean pooling more sovereignty, and would therefore require new forms of representation and centralised decision-making.”

If, as we know, the system of sanctions in a fiscal policy is highly indicative of the level of civilization of that state, or Federation of states, Draghi’s proposal opens up a novelty in the political landscape.

While the base of the European Union is expanding with new member States - and it is certainly good news – it could be infact a mistake from the past not recognizing the authority of that economic entity already engaged with innovative tools for growth, in a global socio-political environment where the ability to deal with new shocks can make a difference, with the opportunities and social costs that such shocks would entail.

It is maybe convenient then that the ‘reliability’ of a State, when recognized as a merit to be rewarded, includes this new political and economic ability, which on the other hand also needs new instruments to collect and analyze the data.

It is an ability that the individual in his or her health – psychic as well - already tests and applies.

 

 

Marina Bilotta Membretti / Cernusco sul Naviglio – December 18, 2023

 

Original painting by Stefano Frassetto[3].

 

 

 

[1] All the quotes here reported have been drawn from : ‘Mario Draghi on the path to fiscal union in the euro zone’, by Mario Draghi upon invitation of ‘The Economist’ - September 6th, 2023. This intervention follows the lecture held by Mario Draghi on July 11st, 2023 at Cambridge (Massachusetts, U.S.A.), as an ECB invited guest. 

[2] As an ECB invited guest at the 2023, 15th ‘Annual Feldstein Lecture’ (Cambridge/ Massachusetts, U.S.A.), professor Mario Draghi held on last July 11 the lecture entitled : ‘The next flight of the Bumblebee : The Path to Common Fiscal Policy in the Eurozone”. The ‘Annual Feldstein Lecture’ is organized in U.S.A. every year by NBER ‘National Bureau of Economic Research’, of which the economist Feldstein – careful EU observer - was president from 1978 to 2008.

[3] Stefano Frassetto is born in Turin in 1968. After his degree in Architecture at the ‘Politecnico’ in Turin he begun as graphic novelist for local magazines. In the ‘90s he edited in France too, on ‘Le Réverbère’ and on ‘Libération’. He created the character ‘Ippo’ for ‘Il Giornalino’ and then the stripe ‘35MQ’ for the magazine ‘20 Minuti’ in Switzerland of which he also published two collections. In 2000 he came into ‘La Stampa’ as portraitist for cultural page and the insert ‘Tuttolibri’, then for the weekly ‘Origami’. Today he works also for the Swiss magazine ‘Le Temps’.