How Bad Is It Going To Be?

I have been fortunate to spend some time in Milan recently. July and August are not the best time to be in Milan – it is hot and humid, and relatively quiet (most locals flee Milan in the summer, if they can). However, it was difficult to ignore the feeling of emptiness and fear that is creeping up at every corner.

Shops are open and empty; restaurants only fill a couple of tables here and there; hotels are empty. Remote work, or “smart work” as they call it here, is definitely going to continue, and for a city like Milan – the financial capital of Italy – going out, spending and tourism are crucial parts of its livelihood. If people work from home, all cafes and restaurants suffer; hair saloon and barbers suffer; any type of retail store suffers.

Talking to people, the impression I had is that we haven’t even scratched the surface of what the impact of Covid will be on the real economy. Large numbers of people will probably lose their job; small businesses will close down; and what that generally brings along is some degree of social unrest, heightened crime, and pressure on politicians who generally use the “one remedy for all issues” – higher taxes, something that has been a favourite in Italian politics for decades. Thereby attempting to kill even those businesses that are stretching hard to survive.

What frustrates me the most about my beautiful country is that it has absolutely unique resources and levers it could use to blow almost any other country out of the water. However, it lacks discipline and frankly it’s highly uneducated about management.

What should change to make a difference fast, and possibly save the economy?

Give people the ability to work when and how they want: nobody should be bound to specific time limits and work only some hours of the week-days. Let people free to do whatever they want and be productive.

Allow business owners to fire employees quickly and efficiently. There will always be some cases of people unjustly fired, but they should be the exception and they can be managed – however, the law should promote a behaviour that makes jobs valuable, and if you are not working, you should not be a burden to your company. What Italians – and especially Italian politicians – don’t get, is that if it’s easy to fire, it’s also easy to hire. By allowing companies to fire people, you are actually promoting substantial hiring.

Certainty of the law and fast trial: civil law is plagued by lawsuits that carry on for a decade and have no end or clarity in sight. Every single civil or criminal case should have a verdict within 3 months, ideally much sooner; and if appealed, that should also take place within 3 months. It is counterintuitive to me that it should take 3-6 months to know if something is right or wrong according to the law of a country – let alone 10 years. It’s a bad joke.

There are many more things that can be done – reduce bureaucracy, cut taxes to attract investments, promote private and public sector cooperation, invest in tourism and education, create excellence and so on. But if we were to get just these main three things right, this country would be on fire.

I am not constructive at all, unfortunately, on the Italian outlook – it seems to me that there is nobody in Italian politics currently capable of doing the right thing, and especially the hard thing. I am quite certain that 2021 will be a terrible year for our country.



Categories: Italy

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