Rome, April 10, 2020 –
Jean-Paul Fitoussi (born 19 August 1942) is a French economist of Sephardi Jewish descent. Born in La Goulette, Tunisia, Fitoussi earned his Ph.D. cum laude in Law and Economics from the University of Strasbourg. From 1979 until 1983, he was a professor at the European University Institute in Florence, and a visiting professor at the University of California, Los Angeles, in 1984. He currently is a Professor of Economics at the Institut d’études politiques de Paris, where he has taught since 1982. He is also Professor Emeritus at LUISS “Guido Carli” University, in Rome. From 1989 to 2010 he served as President of the Observatoire Français des Conjonctures Econoniques, an institute dedicated to economic research and forecasting. He has published numerous articles, books and essays. He is considered to be one of the intellectual leaders of neo-keynesianism of these past 40 years, but claims to have a “very heterodox” vision.
Professor Fitoussi, could post-Coronavirus be the occasion for a great European investment plan?
“Either it is or it will never be again – it is without if and without but the answer of Jean-Paul Fitoussi, French economist who has always lived and taught between Paris and Rome -. The choice is here and now, because if we don’t go in this direction, we condemn ourselves to a destiny of underdevelopment “.
What should a possible European investment program look like?
“It should be an investment plan in public goods, which are those from whose use, by definition, nobody can be excluded and which bring added value to all citizens”.
Let’s put them in line.
“Health with all it means. Infrastructural, material networks, such as highways, ports, airports, and intangible, such as broadband. Education and training. These are goods that have a much more relevant social utility. economic utility but which, in the long term, make it reach the first. Just think of education. If the level of spending is lowered, we destroy human capital, which is essential for future growth “.
How many resources should be mobilized for such an ambitious mission?
“The point is not how many resources. It depends on the quality. If there is quality, everything you need must be found. If we say that we make the most modern internet in the world, then we will put all the money we need into the project. And so for transportation, for research and so on. It is a question, in short, of overturning the whole system of the restrictive European economic policy of the last thirty years, which has produced the cancellation of investments “.
Has European austerity created monsters?
“States no longer had a penny for infrastructure. You see it physically, you just have to walk the streets. Yet, the social utility of investments is also seen in the functioning of the private sector: the cost of services decreases and productivity increases for companies and workers. If we don’t have a short memory, when we invested in infrastructure, such as in the post-war period, growth was also 5% in real terms “.
But will this Europe, the one that argues even in full Coronavirus emergency, ever be able to put such a program on track?
“It is a new disappointment, but I expected it. Europe never met when we needed it. And therefore, it was foreseeable that the Northern countries would say no to the mutualisation of debt. But without mutualising debt does not solve today’s crisis. And not doing it is collective suicide “.
Why do you argue that without a common financing instrument (Coronabond or something else) we will all lose?
“Because Italy, France, Spain will come to have enough of this Lutheran rigor and will be able to decide not to want more than to gain from this structure both above all Germany, which up to now has benefited from it, as a creditor and as a producer, just because the other countries have not been able to use the lever of the monetary devaluation. If, in fact, they could have devalued, Germany would no longer have had the commercial surplus it has and, indeed, would suffer all the recessive consequences of a devaluation ” .
But this means that the crisis is also capable of calling into question the Euro.
“Definitely. If there is no real solidarity, a real mutualisation of the debt, we will either continue to go even further underwater or do something politically incorrect but inevitable: say enough and get out”.