https://twitter.com/i/status/1237683569255944192
The rate of growth of the virus’ spread in the country, both in the number of infections and deaths, is not decelerating: these numbers are growing exponentially. Unlike in China and South Korea, the measures taken so far by the government have proved insufficient. The reason for this include the fact that measures were late, confined to specific areas, taken in a general cacophony of opinions among different levels of government , anticipated by leaks, made ineffective by irresponsible individual behavior (“run” to country houses and out of Lombardy) and by poor media information: this created first a wide underestimation of the epidemic, and later panic.
The government must now challenge unpopularity and take draconian measures, both for public order and for the economy. As to the former, the aim is to curb the spread of the infection.
- declaration of the state of emergency with measures that limit the freedom of movement, the stop of urban and extra-urban public transport, the closure of railway stations and airports, closure of shops (except food and pharmacies) and workplaces;
- Prohibition of gatherings of more than three people, unless they are their own family, under the possible penalty of (house) arrest and charges for culpable or willful epidemics;
- Patrolling of the roads by the police and if necessary by the army, with the right to make (house) arrest for those who violate the emergency provisions for reasons other than documented health problems;
The economic measures must counteract a shock which started off as a supply shock, the interruption of the “value chains” of production in China, and is now unfolding as a very strong demand shock. The government’s response is complicated by the imperative not to cause investors to flee the Italian public debt: we already see worrying signs of increasing the interest spread on Italian public bonds.
- Abolish the (counter) pension reform of “Quota100” and allocate savings to health expenditure;
- Reform the criteria for access to the “Citizenship Income”, privileging families with children and not, as now, single individuals;
- Postpone the tax deadlines for medium and small enterprises whose revenues have suffered a drop higher than a predetermined percentage, and for workers who have suffered an analogous decline in income ; to hedge, the state could issue a new short-term debt to be redeemed when firm and workers fulfill their tax liabilities.
- Nominate Carlo Cottarelli , former IMF economist, as new commissioner for public expenditure reform, with the task of implementing a shock plan for the reorientation of public expenditure, away from particular interests and towards health and social expenditures ;
- At the European level launch the proposal that the European Central Bank should take immediate actions for a) temporary support of households b) a program of bond purchase of securities issued by SME c) a commitment to curb interest hikes of sovereign debts d) the Commission together with the European Investment Bank should launch a new bond to finance health systems of European countries.