February 5, 2023

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Bonomi Confindustria serves the European corporate fund against the United States

Davos – “in Ukraine, reconstruction should be not only economic, but also social. I was on my first assignment ButchaWhere many displaced children have been welcomed. You won’t forget those looks.” Charles Bonomi just got back from Kyivbut also in Davos President of Confindustria I keep hearing a lot about it Ukraine. We met him a few minutes after he intervened Ursula von der Leyen to the forum. head of the European Union Commission She promised to continue supporting Ukraine. But the heart of his words was different. And Bonomi didn’t quite appreciate it. Just as the president of Confindustria doesn’t seem to appreciate it Slight presence of the Italian government in the forum. or Criticism of the European Central Bank.

Mr. President, the specter of a trade war between the United States and Europe hangs over Davos. what do you think?

“The US and China are not game-changers: they are game-changers. What I see missing from the debate, particularly the Italian debate, is that China and the US are pushing a lot on this.”

The inflationary law is a protectionist law. How should Europe react?

It is a measure of competitiveness. It is a cross-sectional orientation that relates to all subjects and all supply chains. In response, Ursula von der Leyen relaunched an idea from Confindustria yesterday.”

Do you mean the European sovereign wealth fund?

“However, it is only green, instead it should keep everything at 360 degrees. We also cannot deal with it using tools like state aid. They only prefer countries that have room for fiscal maneuver.”

Like Germany. So you are against the other proposal that von der Leyen made yesterday to change the rules on state aid?

In 2022, government aid authorized by the European Union amounted to $540 billion, but Germany used 49.3%, almost half of it. 29.9% France. Italy 4.7%. We need a joint European intervention across all supply chains. Only in this way will the resources be sufficient and the single market will not collapse.”

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Von der Leyen says nothing about how it will be funded. What do you suggest?

Eurobonds. And we need a sovereign wealth fund that deals with rare earths, for example. The real challenge we face is not so much differentiated autonomy as European industrial independence. We do not have the raw materials and the United States and China are racing to take possession of them. The sovereign wealth fund should also buy them. We have to ask ourselves what “sustainable” means. For example: Cobalt is essential for batteries, but how is it extracted? of exploited children in the Congo. And the European sovereign wealth fund should impose completely different conditions.

But is the war of protectionism not a war in which Europe risks being crushed first of all?

“Not at all. Our industry is a transformation industry, we cannot afford protectionist fights, especially in Italy. In every crisis we have borne the economic effects from 2010 onwards thanks to exports. If this component falls, we collapse. We should not focus on US protectionism but on how Implementing Industry 5.0 in Europe.

But if the United States is attracting Italian companies with more favorable tax terms, how is that not a problem for Italy?

“If we were to look to those who relocate for better conditions abroad, there would be no Italian industry … but it would have to be done through organic tax and labor reforms that politics keep putting off”

Two exciting pieces of news arrive from China: It’s only growing at 3%, and it’s in demographic decline. There is a lot of thinking in Germany and Europe about how to reduce dependence on Beijing. Wouldn’t that be in Italy too?

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“The fact that China is growing so little is a problem for us. If it collapses, it is a problem for everyone. For Germany, I will tell you about this episode that I find very important. I met in Prague with my German counterpart Siegfried Ruswurm, chairman of the Bdi party. He told me that Germany made three mistakes Fundamental: I handed defense over to the United States, energy to Russia, technology to China. Today we realized we had to completely rethink it. I’ve never seen my German colleagues so worried. But in the last year, vast swathes have opened up for Italy internationally. And not just for industry We can play an important role.”

But the Italian government is not here in Davos.

“I imagine there are important files to be dealt with in Rome. But perhaps some food for thought can be found in the numbers: 52 heads of state, 370 ministers and 600 managing directors from around the world. I have come here because I am discussing the prospects for the coming months.” With colleagues and counterparts from all countries. In Stockholm in November, with 40 unified European industrial associations, politics told us that we must come together on the challenge of competitiveness: no one can win alone.”

Another important issue: Italy remained the only country without a minimum wage. Isn’t that a shame?

“Europe is considering a directive because there is wage dumping and many European countries do not have collective bargaining. But in Italy, more than 80% of workers are covered by national contracts. But it is true that there are sectors where the salary is not decent. For me, the A total of €4 is unacceptable. But this does not happen in the industry: in recent legislation the minimum wage was proposed at nine euros gross per hour and the contractual minimum higher.”

But risky? wage entry?

The real problem is the contracts for other sectors: is there political will to change this situation? And look at the renewals: Confindustria has renewed all contracts, State and Services have not. Finally: wage increases must also respect the productivity curve. However, if they want to make a minimum wage, we’re willing to put up with it. But the overall economic treatment remains with the contracts.

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Here in Davos we are also discussing monetary tightening: do you think the ECB should stop?

“There is a narrative that doesn’t convince me very much. We imported inflation that offset from the EU average. It used to be shorter, now it’s longer. But if we look at its composition and timing with the current price of gas so low it should come down ​​Inflation has increased significantly in Italy in the second half of the year and in particular since September it reaches half, to 5-6%.

So we shouldn’t raise interest rates?

And here again: the problem is not the ECB. The rate is 2.5%. Honestly: could it be a problem for the economy? Isn’t the real problem that for many years we had negative rates and had to reshape public spending and reduce debt? In the past eleven years, our debt has increased from 1900 billion to 2800 billion, and in the meantime we have doubled social spending. But also the number of poor. Europe’s fault? I will not say”.

How is debt reduced?

We have 1100 billion in public spending. We can recreate 4-5%. We have 3,900 publicly owned companies, a third of which are loss-making. might happen. But 1,200 board members are more than employees. We can consider revising those expenses. Was the lump sum tax needed to make a lump sum penalizing employees and costing 1.2 billion? This flat tax does not create growth. I can go on, stopping at these two examples.

Wrong move?

“Sharable on energy. But if labor taxes are not cut definitively, we are not convinced. We need to take 16 billion concentrated under €35,000 of income, two-thirds for workers, one-third for businesses. That would mean giving workers an extra €1,200 Any additional month’s salary.