In mid-October, CFE hosted an event in Seoul to discuss the ongoing European economic turmoil, and specifically the Italian corner of the debacle. Speaking at the event were Alessandro De Nicola of the Adam Smith Society and former Senator Franco Debendetti. Both speakers laid out the historical roots of Italy’s troubles and warned South Korea not to repeat such mistakes.
In discussions with other attendees over a lunch following the event, I sensed a desire for more analysis of the current predicament in which Italy finds itself and for how the country – and, more broadly, other Eurozone nations – can clean up its portion of the Mediterranean Mess.
All of which makes the above discussion between Robert Wright, of Bloggingheads.TV, and Franco Pavonvello, a political scientist at John Cabot University in Rome, a nice complement to the CFE event. If you’re not able to watch the entire video in its entirety right now, you can download the audio and video versions at BhTV.
Listening to Pavoncello, it’s not difficult to see why Italy is in such a pickle. Consider:
- In Italy, companies with more than sixteen employees cannot lay off or fire a worker if that employee has been with the firm for more than three months. Such rigidity leads not only higher unemployment but to a reduction in the economic dynamism necessary to throw off the revenues required by a welfare state.
- Italy’s debt currently stands at approximately 120% of GDP, and yet the nation’s economy has grown little, if at all, over the past decade.
- An estimated 30% of all economic activity in Italy is within the black market. Bringing this commerce into the open will require more sensible regulatory policy.
Pavoncello seems cautiously optimistic about Italy’s prospects now that Mario Monti, an economist who certainly understands the mechanics of the Euro better than his predecessor, is sitting in the prime minister’s seat. And anyone who wishes the Euro to survive better hope that Monti knows what he’s doing – and that he can bring the voters along with him – because as goes Italy, so goes the Euro.
Tags: adam smith society, alessandro de nicola, bloggingheads, european crisis, franc debenedetti, franco pavonvello, italy, john cabot university, robert wright, seoul, south korea
