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giugno 2016
17
How to eliminate
the national debt
After a term as commissioner of the
Italian government spending review,
Carlo Cottarelli has returned to
Washington, moving back into his
office at the International Monetary
Fund, where he is currently Executive
Director. Italy, however, remains in his
heart, especially his native Cremona, but
also in his mind. In the book published
two months ago entitled Il macigno
(‘The Great Weight’), the economist
analyzes the endemic problems of our
country and eventually formulates a
recipe to eliminate in four years the
massive weight on our economy that is
the national debt, one of the three highest
in the world. We met him inMilan at
the end of a conference, one of many
that Cottarelli conducts, particularly in
schools. His well-mannered approach
and colloquial language allows him to
make macroeconomic analysis a simple,
though hardly trivial argument. To
achieve the goal of eliminating the Italian
debt, the economist feels “it is necessary to
maintain primary expenditures, i.e. net
of interest, constant in real terms, which
is to say adjusted for inflation. It must
not increase for three to four years. At this
point, since the economy in this period
should continue to grow albeit not at a
fast clip, this should be sufficient to bring
the deficit from the projected level for
2016, which is 2.4%, to more or less 0%
within just three to four years. From that
point on it would be a question of keeping
the budget balanced for a long while, not
for every single year but on average over a
number of years, insofar as it is necessary
to allow for the cyclical fluctuations of the
economy. At that point the debt would
begin to decrease at a rate of 3 percentage
points of GDP per year, which is a
substantial rate”.