Enough with the banks, we need to invest in textiles and agriculture

Alberto Forchielli, managing partner at Mandarin Capital Partners, offers a simple, provocative, and clear recipe for stimulating growth: “return to the real economy, liberalizing the job market and occupying sectors that the Chinese in Italy are abandoning: from textiles to intensive agriculture.”

The president of Confindustria, Vincenzo Boccia, has warned: stress tests should not become an obsession. Is this true? Are we obsessed with banks and European exams?

“All we talk about is banks. Institutions with public resources will be saved (see the intervention of the Cassa Depositi and Prestitit in Fondo Atlante or the pressure to have pension funds intervene), to then surrender them to private institutions participating in the capital increase– like the case of Monte dei Paschi di Siena– and we forget about the real economy.”

Without healthy banks, however, there’s a risk of contamination for the entire economy. When we talk about MPS, we’re talking about the third Italian bank.

“In the case of MPS, there was no alternative; they made the necessary choice. But without an economy capable of growing, there are no healthy banks.”

There must be something good that finance can do for businesses and the real economy.

“I don’t think so.”

The relationship between banks and businesses is increasingly complex, and small- and medium-sized businesses are finding new channels for financing, like bonds for Aim Italia.

“See, institutions are full of liquidity, but they don’t know who to lend it to; businesses aren’t investing because there is no demand. Yes, there are lists dedicated to small/medium-businesses, and others can look for funds in Paris, London, or Milan. But to make a difference, they need to liberalize the labor market and abolish minimum salaries.”

We’re talking about historic changes, and approving the Jobs Act was an undertaking for the government.

“Italy will be saved by recognizing its errors. Once at the forefront, we were disqualified by the global economy and now we need to get back in line. We lost the train of economies based on know-how and high-technology; now we need to become the Chinese of Europe. We need to reappropriate the sectors that Chinese entrepreneurs and laborers are freeing up in Italy.”

Which?

“Intensive agriculture, for example. But also textiles (to which we can add fast delivery times), maybe mechanics… but we need to reconsider salaries. If we don’t do this, a huge informal domestic economy will be born beside a modern formal economy, in addition to a third, criminal economy: it will be the ‘mexicanization’ of Italy.”

In May, according to the latest Istat data, both exports (-0.2%) and imports (-1.2%) are decreasing in conjunction. There is a 5 billion Euro surplus. What else can we do, for example, in China?

“By now that race is over. We should have invested more at the opportune moment, delocalizing first. Yes, we still have some cards to play in agriculture and food as well as fashion. Now we need to try and attract the Chinese to Italy: not only to tourist destinations, but also to our universities and real estate. However, we need to change our legislation…”

Brexit has caused market volatility and worries for EU countries, but it could also create some opportunities for Italy. 

“Milan could attract the head quarters of some multinationals. But we’re competing with Paris, Frankfurt, and Luxembourg. Let’s not think that Italy can live by looting Brexit.”

 Interview by Claudia Cervini