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Fear and lack of trust, unemployment, deflation, immigration and terrorism are part of our everyday life and anything seems changing.

We are feeling the remarkable success of Euro.
Euro has been created to convince Germany (that has done the big sacrifice of giving up with the Mark) that the stability culture would have spread across Europe.
Greece is the greatest success of Euro, isn’t it?

These words have not been pronounced by a common alcoholic man in the southern Europe (as Dijsselbloem, the President of the Eurogroup, would say) but by Mr. Mario Monti, when He was the Italian Prime Minister, during a TV interview in 2011[1].

For someone 2011 is too seasoned, so it is worth to come to the present.

Europe has been a necessary instrument of stability, safeguard of peace, economical growth and progress. Europe has affirmed an unmatched social model made up of rights and  civility.

Sergio Mattarella, President of the Italian Republic, speech on the 60th anniversary of Rome Treaty[2]

Thinking about these words everything seems to be shining but, unlikely, things are slightly different (just consider that a war can be fought not only with military weapons but also with economic ones).

Premises and false promises

By signing the Maastricht Treaty in 1992, our Founding Fathers were straight on the importance of the principles of liberty, democracy and respect for human rights. They desired to deepen the solidarity between people while respecting their history.

They wanted to establish a common citizenship, by taking decisions as closely as possible to the citizen.

Actually, we are living a conflict between premises and promises of the EU and their economic/monetary realization.

The EU has highly respectful ideals but their economic development (the Economic Monetary Union) has politically and economically polarized itself, mining the “trust mechanism” between citizen and institutions (1 EU citizen out of 3 trusts EU, comparing to 1 out of 2 ten years ago).

Looking at the graph below, it is vivid the ongoing polarization between northern and southern states.

It is stressed the idea that the introduction of Euro and its “management” in the real economy (2002) has enhanced social and economic disparity, so that Euro has been defined as a project of Economic Darwinism by the economist Alberto Bagnai.[3]

Schermata 2017-04-11 alle 15.05.10.png

Source: Eurostat, G. di Taranto, L’europa tradita

For a better understating of the process of polarization between northern and southern states, it is possible to isolate Italy and Germany and extrapolate tendency lines in order to have the idea that the actual mainstream doesn’t work… or works just for an European elite.

Schermata 2017-04-11 alle 15.00.23.png

The basic idea is that, in a common monetary area, a State in surplus is related to other states in deficit. Moreover, it is not possible to acquire economic/political power by exploiting other states deficit (as happened with Northern Banks that have privatized profits and socialized losses during the Greek crisis).
The result is that the EU risks to implode because of not realized promises as peace, equality and social wealth.

Monetarism Mainstream

Monetarism is the fundamental economic idea of our Euro area.

It’s a simple idea: to avoid deflation it is necessary to spend all our salary and it’s not admitted the idea of saving (e.g. if you earn 10 and you spend 8, saving 2, there will be some unsold products: a necessary condition to have deflation)

The paradox is that, in an economy ruled by these ideas, austerity is imposed to us to have inflation, even if it generates deflation as explained above.

Future Perspectives

It’s clear that the Monetarist perspective has to be relinquished and replaced by “new” theories.

Keynesian consensus needs to be reexplored and implemented in our political decisions.

In particular, investments in R&D must be incremented, considering that we are living in a complex and dynamic world in which innovation and entrepreneurship are occupying a decisive role for economic development.

Indeed, according to Schumpeter’s words “carrying out innovations is the only function which is fundamental in history”. This statement appears clearly in the graph below.


Source: Eurostat[4]

As a matter of fact, Europe’s leading countries are those in which R&D funds are used in an efficient way.

Keynes tells us that fruitful investments, even if “adopted” in deficit, leads to prosperity.

From austerity to fruitful investments: this could be our solution, just implemented in the ’29 crisis resolution.


“We need to identify ourselves with past challenges, in order to face nowadays and tomorrow ones”[5]  being conscious that

“Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity.”[6]

Davide Cravero



[2] Integral speech



[5] (Pope Francis)

[6] The Schuman Declaration – 9 May 1950


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