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You are here: Home > Citizen Audit > Another step ahead/01 2021-02-19 #Italy #Government #COVID19 #NextGenerationEU

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Published on 2021-02-19 | Updated on 2021-04-29 21:00:00 | words: 2473

As I wrote online, I waited to share commentary on the new Italian Government until the confidence vote was done.

This will be a short but (hopefully) packed article- more then as an ongoing concern whenever action follows.

And, as you can see from the title, is the first of a series- as this section is about commenting data, the frequency will be dictated by documentation released (including speeches from officials), so I cannot share a schedule.

Just to start with a long disclosure that I think that is anyway needed- moreover, if you are an occasional reader.

Two sections in this article:
_a long disclosure
_a short commentary

A long disclosure

If you (as I did, in parallel to my study and online workshops) followed live the debate at the Italian Senato and Camera dei Deputati on the confidence vote, you probably heard a long list of conspiracy theories.

Personally, I subscribe to only one.

I think that M5S had two opportunities to be at the helm of the Italian Republic, and selected Professor Conte for its own internal reasons- probably, looking forward to become the leading factor in a renewed bipolar system.

I do not agree with those who say that our future system will be divided between "progressive" and "conservative".

Both will be progressive- but with a different conception of the future they are aiming for, if we will ever have such a system.

Because we have conservative both on the left and on the right: the "quicksands" of Italian bureaucracies and status quo is, in the end, reassuring to many.

Notably, its gazillion of tribes that are constantly trying to restructure the balance of power.

You can imagine what this can mean when you have a once-in-a-generation (or even two) opportunity.

But this is not the conspiracy theory I subscribe to.

I think that the three-ring circus made mainly of communication that started in Italy on what is locally called "recovery plan", as if NextGenerationEU were about just recovering the status quo ante COVID-19, was the straw that broke the camel back.

Including that quixotic announce, just a little while after the NextGenerationEU was announced as a plan, and was stated "not to be wasted"...

...of 1bln EUR for 1mln trees as a symbol of national unity.

Then, the first rumors about the content were unsatisfactory- and also the second rewriting... well, I shared online in mid-December 2020 in a book a chapter focused just on that.

You can read that chapter (not the whole book) for free here.

There have been thereafter few more fixes, but still with that focus on keeping the "blocks" as agreed between EU27 on the definition of the NextGenerationEU, while actually doing what I already criticized about the prior "Decreto Rilancio" and the ensuing "Legge 77": if you want, you can call "systemic design" a collection of earmarks, but, allow me, I disagree.

It is true that a whole is able to deliver more than the sum of its parts- but if you apply a "sprinkler money" approach to make everybody at least a little bit happy, you are not joining forces and achieving a force multiplier.

You are spreading thin your already limited and exhausted forces.

My American friends often said two phrases while talking about business: "bang for bucks" and "show me the money".

Or: what you can achieve with the resources you have, generally by focusing ("force concentration" for some of my friends), and what I call "walking the talk", i.e. putting your resources on what you nominally promote.

Equally quixotic was the discussion about how to spend all the 209bln (or 220bln or whatever).

I know that my mindset is distorted by my business experience since the 1980s in various industries on business number crunching: but I still believe that the purpose of budgeting is to define boundaries of expenditure via prioritization, not to give a purse and then say "spend spend spend".

Instead, the first hinted at lists of projects and initiatives smacked a lot of "open the drawers, and see what we can do with that money".

Which is, incidentally, part of the reason why Italy routinely is unable to invest (not "spend") all the resources allocated at the EU level.

I will not discuss again those points here, as you can read my previous articles on this website, as well as posts on Linkedin.com/in/robertolofaro and Facebook.com/robertolofaro.

To talk straight, and repeat what I shared in person and via whatsapp over the last few days: considering the government decrees and management of crises well before 2020, and all the government decrees spending a whopping 150+ bln EUR since March 2020, I did not see as a wise course to give a third chance to Professor Conte to squander resources and generate entropy.

This was my disclosure.

And now...

A short commentary

I will start with a tag cloud:

It was funny to see how newspapers in Italy adopted the tag cloud to share the speech of the PDCM Draghi (President of the Council of Ministers, the official Italian title that tells why saying "Prime Minister" is funny for fans of "Yes, Prime Minister", but is inappropriate within the Italian Constitution framework; he had already delivered the oath with his Government, and therefore was already "in charge").

Well, I adopted a different approach- not selective, but inclusive (as I hope that the Italian NextGenerationEU implementation will be): all the words, except common words, in.

Then, on the left-hand side, the speech that PDCM Draghi sent to the Senato and Camera dei Deputati, and on the right-hand side first (on top), the tag cloud from the "minutes" of the discussion within the Senato on 2020-02-17, and then (below) the tag cloud from the "minutes" of the discussion within the Camera dei Deputati on 2020-02-18.

Two different planes of reality, as you can see- which marks also the distance between our elected politicians (currently many running a "political beauty contest" to settle in a role within the new political framework, both in and outside the government and related organizational entities), and the tasks at hand.

But it is just natural: albeit it was curious to hear the (needed, if you want to use those fund) long-term perspective here and there within the (short) speech and (shorter) replies given by PDCM Draghi, and the often short-term perspective of interventions from elected representatives.

There will be time to adjust- albeit I frankly disliked some overtones that reminded me, as I shared yesterday with friends, something I had found while doing an historical research by reading official minutes from the Parliament as released in the last term that started before Mr. Mussolini became head of the government.

Disturbing- but worth watching: it is exactly one century, but we do not need to repeat it...

This article is within the "Citizen Audit" section- and, therefore, it is focused on facts, data, and observation of signposts that could turn into trends.

As I promised at the top, this is a (necessarily) short article: as I wrote online over the last few days, I will leave to others (including myself elsewhere) to play the latter Cremlinologists roles, reading the "tea leaves" (well, minutes pages and scarce interviews, actually) to divine where the Government's action is heading to.

Get ready to read many conspiracy theories from Italy: the "cui prodest" is a standard in Italian tribal politics.

Notably whenever your tribe is not between those reaping the benefits, or whenever you feel that your tribe is not getting its "fair" share- it not about "fairness", albeit usually the routine "j'accuse" claim to be about just that.

Again- will write more about that elsewhere: here, within the "audit" side, it is just to remind the context that often foreigners forget, taking at face value our "j'accuse" routine.

Also, until I see written acts (programme details, a roadmap, a timeline- called "cronoprogramma" in bureaucratic Italian in Rome), I can comment here on what is already available, i.e. the macropoints.

As I shared in December in the commentary on the "Piano Nazionale Ripresa e Resilienza" (henceforth PNRR), the Italian proposals for the NextGenerationEU and associated financial measures adopted to cope with COVID-19, there are some standard issues related to public expenditure in Italy.

So, in this first article, I would like to discuss a first point.

And, to make a long story short, and allow comments, I will share the link on my (yes, the page on commentaries about EU affairs that recalls the title of my first published book, a personal-political diary of my two weeks in Berlin in November 2012- you can read it for free and download here).

The key point is: I was already sharing my dissent months ago when many started uttering proposals to extend the infrastructural development model adopted to rebuild the fallen bridge "Morandi" in Genoa (the new one is designed by Renzo Piano), as it was feasible (with limited distortion) only due to the high level of scrutiny that followed it- which could be difficult to achieve if it is adopted as a standard.

In Italy, we have an approach to public (and, often, private) investments and expenditure that is a kind of "laissez faire, we will check later".

So, before, during, and after any major initiative, rumors and gossip about corruption and administrative distortions abound, but only later something is done.

Since at least the late 1980s, I am used to consider financial and organizational controlling as something based on at least three moments:
1. define a kind of "Statement of Work" that includes also the principles your actions have to be compliant with while executing the activities listed
2. there is continuous monitoring, both from within the team (to alert "sponsors" and other stakeholders of potential impacts and trends when needed), and from the same who communicated what they expected you to be compliant with
3. there is a "closure" where you identify what happened and why, what was missed and why, and what could have been done in a different way- then, this is shared with those involved in "monitoring" in 1. and 2.

In Italy, the first point is often the one done, but 2. is activated only if extra-budget is needed, or something cannot be done but you found other ways to spend the budget (again, the same point).

As for 3., often is done as a pro-forma, while the real 3. is done (in public expenditure) by... various forms of ex-post controllers (including the judiciary).

Now, if you build the wrong bridge, or build a road in way that skyrockets maintenance costs, this approach does not work.

I shared in the past how Italy was able to sometimes "cut the corners" in the past (e.g. Mattei) to deliver what was not necessarily bad, actually sometimes deliver something that had been deemed impossible.

But it was focused and limited by some constraints (including by those "buccaneering their way ahead" having different concept of State from what most have today).

We live in different times, with different motivations, and different concepts of reality- maybe also because, back then, it was a matter to quickly rebuild the industrialization of our country that had barely really started to move into industrialization between the late XIX century and early XX century, and was at risk of again turning into an agrarian society.

Number crunching: to those advocating a "happy de-growth" ("decrescita felice"), please go and re-read the debate about stripping industrialization from Germany after WWII- technically it could be done, back then, but a "back to peasants" society would not have been able to support the population of Germany, an advanced infrastructure and a modern health system.

So, my position is: if we decide, in Italy, to extend the "Modello Genova" to all infrastructure projects, we need to re-enforce the local monitoring (i.e. provide means so that citizens can actively monitor the status and initiatives- continuously), and then have anyway a closer integration of dataflows into an overall monitoring structure that will spot whatever unusual is going on.

While it can still be amended, not after.

Hence, the ANAC (watchdog against corruption) is fine- but as a competence centre to be used in 1. (defining the rules and boundaries) and support to 2. and 3., not as a single point of reference- we need to spread a culture of ownership of the "commons" through actions, and the NextGenerationEU is a practical tool to do that in few years while delivering motivation (the results) to do it to increase efficacy while keeping an eye on efficiency.

Otherwise, the risk is of creating yet another bureaucratic behemoth, a kind of "anti-corruption Gosplan": and we all know how good was at efficient delivery the original Gosplan...

Then, but this is another point worth discussing from a "pre-emptive audit" point, we should also reconsider the approach to "spend it all".

Do we really need to spend 209bln that, in the end, are directly and indirectly loans, when Italian citizens sit on cash and de-facto pay to keep their money on their banking accounts?

It is not a matter of taxation- it is a matter of evolving the "private-public initiative" beyond the corporate confines, and beyond the Cassa Depositi e Prestiti postal savings model.

Update 2021-04-29: continues with Another step ahead/02 2021-04-29 #Italy #Government #COVID19 #NextGenerationEU