Article by Vito Gamberale published on Mondoperaio, the montly magazine founded by Pietro Nenni in 1948, which deals with politics and economics.

1. The future Republic - A second reconstruction
Vito Gamberale
“The future Republic – A second reconstruction”
Vito Gamberale
Looking at Italy’s new economic and industrial structure, the 70 years that passed since 1946 show a
clear basic evolution profile despite the various oscillations and the confusion which typically
accompany such long periods. After the establishment of the Republic, Italy was a country based on
farming and craft activities, weakened by a long-lasted, demeaning war, showing the scars of
destruction in its major cities, and where primary infrastructures (roads and railways) were
underdeveloped, insufficient, and run-down. There were only few major industrial entities: Fiat – in
Turin – and the country’s first steel production base in Northwest Italy. From a social standpoint,
illiteracy was still high (13%) and schooling poorly spread. Today, when we look back, we can picture
the new-born Republic as a little girl that had to grow up quickly. She had to fix many problems in
order to re-align the country’s economic and industrial framework to other nations, which Italy was
now starting to compete with – 70 years after the Unification of the country. Italy’s evolution can be
clearly divided in three periods. In the first three decades, Italy was reborn and could rely on a
modern and cutting-edge infrastructure system (the best highways in the world), a solid and strong
industrial framework – although mainly concentrated in the country’s northern and central regions,
and an advanced energy system (Eni unexpectedly became one of the leading oil powers worldwide,
and the nuclear power put Italy at the forefront compared to the other European countries). At the
same time, a new ruling class was growing and a consolidated and widespread class of manual
workers as well as white collars was established. Although in the first phase of the recovery it was
mainly about fulfilling obligations, in the second phase new rights consolidated, supported by
governments that were able to combine development with social respect. Those were years and
decades during which the whole nation felt committed to express something exceptional: this was
reflected both in the economy and the industry, as well as in the various art forms (ranging from
music to cinema), in science (the Nobel Prize awarded to Natta), and in sports. Italy was able to rise
again after its total collapse and to assert itself, anticipating the future to come: this is how the
country became a true and admired major player in a new emerging Europe.
The following decade – the ’80s – was a time of contrasts: terrorism, extreme social differences, and
a political approach that was showing initial signs of inadequacy. Three decades of progressive
confusion throughout followed (from the ’90s to the present times): the disruption of historical
political parties (whose epilogue was written by the winning party, whereas the losing side never
had the chance to tell their side of the story, although they would have proved more obvious and
reliable narrators), a relentless growth of public debt that put Italy in a very risky and precarious
situation – never properly addressed, an industrial structure unable to keep up the momentum and
without any strategic point of reference, a political scenario staging unsuitable performers rather
than responsible, informed, and brave leaders (at least almost to date), and a continuous fight
among institutions, resulting in a very dangerous overrunning.
Today, Italy appears to be in the very same diffuse, critical situation as it was at the beginning of the
Republic.
What ideas can drive a new reconstruction? First of all, a new institutional set-up is required that can
provide for appropriate ruling. It is also necessary to stop downward negotiations,

2. The future Republic - A second reconstruction
Vito Gamberale
consociationalism, and the fragmentation of responsibilities and duties. A constitutional review is
therefore welcome. The vast majority of the Italian citizens – as can be expected – never read the
Constitution. However, all of us must acknowledge the simple idea that a country’s constitution is
just the same as a company statute. And just like a company statute, the constitution is open to the
continuous adjustments that new circumstances and modern times require. The content of the
constitution cannot be immutable over time; this would otherwise stick Italy to a set-up that times
have inevitably proven to be obsolete. It is therefore necessary to start disapproving, opposing, and
denigrating that conservative assumption according to which Italy has “the best constitution in the
world”.
Streamlined, centralised governance is paramount. To this extent, the bicameralism reform is a
welcomed change. The reform could have included the dismissal of the Senate. But, since this was
not put in place, such change must be postponed to a future date. It is also necessary to take a
critical look at the regions. Were they a driver for the growth of Italy or a source of confusion,
increased political corruption, and dangerous decentralisation of powers? The answer to this
question supports further consent to recent reforms, which tend to recentralise those specific
powers that are typical of a central government. Looking at these necessary, urgent reforms – which
have now been launched – a true, deep reform of “social parties” should be advocated, ranging from
the unions to industrial organisations, to the millions of entities that are still surviving without
offering anything in return, to certain financial and para-banking institutions characterised by
obsolete roles and non-transparent management.
It is also necessary (and quite urgent) to bravely address public debt. Reducing the debt through GDP
growth and inflation is an absurd and reckless approach. Despite what many think, there is no
indication that these two factors will virtuously increase (3% growth and 2% inflation). It’s an
unrealistic dream. And even in the event that this was possible (which is not the case), it would take
mathematically 15 years at such unattainable levels of growth in order to cut by half the current
debt-GDP ratio, which still accounts for 132%, i.e. 15 years to bring the ratio to 60%, which accounts
for the safety level of an advanced country.
We need to understand that such level of debt weakens Italy in terms of international reliability,
social cohesion, and credibility. It is as if the country was built on a stilt house with very thin and high
pillars: a simple gust of wind would weaken the structure and destroy the house. A strong and
authoritative government must be brave enough to disclose and address this problem. There is not
just one recipe to solve it. A mix of brave and mild initiatives is necessary, which should be able to
support and drive the economy system towards the desired goals without weakening its core
structure. Italy is not comparable to the USA – the world third most powerful economic and military
entity, which can afford an abnormal level of debt without risking serious consequences. Italy is at
risk to face the same fate as Greece: we need to keep this in mind in order to avoid such event.
It is necessary to eradicate the institutions’ tolerance and complicity towards tax evasion.
A severe and aggressive fight against tax evasion is undoubtedly the first and strong action required
to cut public debt. What is presented today as a cure against tax evasion is a mere homoeopathic –
i.e. slow and natural – treatment. It is necessary to consolidate the acknowledgement that evading
taxes is like robbing the entire Italian society. Tax evaders must be put in jail and kept there. Those
shops that do not issue a proper tax slip or receipt (and issue instead a mere replacement

3. The future Republic - A second reconstruction
Vito Gamberale
document) must be definitely shut down. It is necessary to uncover the bottom of the iceberg of tax
evasion, starting from the most wide-spread and minor forms of evasions (e.g. small single amounts
for big quantities, that account to bigger and bigger total figures), moving on to the most
concentrated and largest violations, including for example unclear headquarters of company
holdings registered abroad but fully economically operating in Italy.
This is certainly a huge challenge to face, that needs to be addressed with appropriate laws strictly
applied by magistrates along with fair and motivated security forces. It is necessary to eradicate the
implied complicity and institutional tolerance towards tax evasion. Tax evasion must be depicted as
an utmost serious violation. Effective actions against tax evasion could – alone – ensure the
government tens of billions of income increase, as much as 100 billion per year – a figure that
accounts for 6-7 GDP points. This measure would effectively cut down public debt and grant the
government that introducing such actions the authority necessary to take further actions that will
necessarily require a stronger commitment in function of the level of the resources.
The subject of tax evasion is closely interconnected with the corruption issue – a much more widely
spread scourge than people think or are willing to acknowledge. Corruption is not perpetrated by
politicians alone – who are subject to daily humiliation through more or less fair initiatives.
Corruption is widespread in public offices and is not limited to one person illegally punching multiple
timecards. Today, corruption – just as tax evasion – is considered as an act of cunningness, almost at
the same level of an appreciated talent. The establishment of the Anac (the Italian national authority
against corruption) is not a sufficient measure. The authority was launched to operate – and is in fact
operating – only in specific sectors. Corruption must be recognised and prosecuted wherever it
hides: in economic transactions, in professional occupations, in bureaucracy, as well as in often
tolerated cover institutions (let’s just think of the countless non-profit associations operating in
Italy). Tax evasion and corruption lead to a further line of thoughts: the need to restore the
responsibility of obligations, which shall have priority over rights. People need to acknowledge that
Italy is not lagging behind in terms of rights. On the contrary, Italy has a huge deficit in
acknowledging obligations. In this area, we should learn from the Northern European countries,
some of which can be considered as Europe’s best practices – such as Denmark, Finland, and
Norway. In a country where people are not required to fulfil obligations, claiming rights will
inevitably prevail and lead to injustice if not combined with obligations. Italy needs to prepare to
imminent and progressive new epic revolutions. Moreover, the country needs a “plan B” in case
Europe fell through. Europe too has become frail and vulnerable – and was never able to become a
real nation. The illuminated vision of the founding European political leaders (Adenauer, De Gasperi,
de Gaulle) and of those who fostered Europe’s development (Schmidt, Mitterrand, Craxi) are no
longer represented by adequate interpreters. Certainly, many issues were caused by Brussels’
so-called bureaucrats, who introduced rules and restraints in countries that are too numerous and
have too different histories to be lumped together. The recent crisis – the economic crisis, the
immigrant crisis, and terrorism – created much stronger barriers and contrasts than the walls that
certain countries erected or threaten to build. In a few months, we went from Grexit (because of the
debt) to Brexit (because of restraints and demands). How many more “exits” will we face? Will
Europe withstand such recurrent threats? Sooner or later someone will exit the European Union.
That will very likely mark the beginning of the end. Let’s be clear: Europe as it is today is for Italy
both a duty and an objective need. However, we must also think of an emergency plan. Life

4. The future Republic - A second reconstruction
Vito Gamberale
necessarily demands to design emergency plans to face catastrophes of various kinds. The same
goes for Eurexit.
Italy must prepare for imminent and progressive new epic revolutions.
Biotechnologies, nanotechnologies, robotics, IT invasiveness will lead to a much more massive social
and industrial restructuring than the revolutionary evolution from crafts to industry introduced in
the past. Production methods will radically change, as will also the way of working in factories (if still
necessary at all…) and in companies, as well as in the features of workers, employees, and managers.
This is a revolution that all governments should recognise and potentially expect to come along in
the future of their country. It would be very useful if the technical experts of those governments
kept regularly current and updated on the changes ahead in the future. To this extent, the major
global consulting companies represent a precious and useful source of information.
Let’s not forget the school issue. Italy should be aware that the education system too needs to
undergo a fundamental change in order to prepare young people to live up to the future ahead (and
to face present times, as well). If someone from the second half of the nineteenth century was
plunged in our time, they would certainly be shocked by the profound changes in everyday life, in
the household, in work life, in the office environment, in mobility. The only place they would feel at
home is school. Entering the classrooms, they would find more or less the same equipment and the
same set up as in the past: the teacher’s desk, school desks, a board, books, workbooks, papers
hanging on the walls, geographical maps.
Italy needs a school that is not necessarily based on daily attendance or gathering young people
from the same neighbourhood speaking the same language. Teaching subjects will also change:
more awareness and a closer interconnection with the outside world will be necessary. The various
conservative approaches that for long time have curbed the development of education will have to
be superseded by contemporary needs. To this extent, the “good school” reform actually did some
good. Unfortunately, the reform was poorly appreciated by the general public, also because it was
accompanied and smothered by averted opposing visions unable to recognize the challenges that
future generations will face.
The banking system is another fundamental area that needs to be updated to present times.
Globalisation brings institutions in daily contact with national and international banks. Today, Italy is
facing a huge risk due to the great extent of its outstanding claims. This is a critical issue whose size
cannot be accurately estimated, also because the banks apply unrealistic measurement scales to
evaluate the “temperature” of the various debts, i.e. the probability to realistically recover the
money from the (individual or corporate) entities that they previously entrusted with the debt.
It should be borne in mind that bad debts result in an equal risk for those who have deposited
money in the involved banks. Banks merely represent a pass-through from savers to debt
beneficiaries. The actions that are being taken to address this important issue are fundamental – an
issue that appears to be more and more similar to an iceberg, rather than to a platform (the biggest
part of the iceberg being not visible). Banks must be required again to apply credit rating systems,
which cannot be based by default on estimated indexes derived from not always solid financial
statements, which are almost never verified on site. Before assigning a credit, the conditions
necessary to enter the debt must be verified.

5. The future Republic - A second reconstruction
Vito Gamberale
Moreover, Italy should protect its citizens’ savings from the serious issues that have affected foreign
banks. Banking derivatives are like cancers of the financial system, and represent a bubble that
might make everybody poorer. Just as they must account for their public debt at international level,
governments also must demand answers and appropriate actions from those countries where the
cancerous banks are based.
Finally, the idea that outlining all the issues to be addressed is enough to prepare for the next
seventy years of the Italian Republic is presumptuous. We must gain awareness that the current
critical and dangerous situation does not differ much from the conditions of the country in 1946,
when the Italian Republic was borne. Today, political leaders must show the same level of awareness
and the same bravery showed by those leaders that took the responsibility to rebuild a country
shattered by war, characterised by a weaken economy, and needing hope for the future. We must
develop a new collective awareness and commit to more participation and cooperation, as well as to
the necessary efforts in order to take over an active role and create a less uncertain future.
VITO GAMBERALE