Covid and inequalities in Italian municipalities – Interview with Carlo Salvemini, Mayor of Lecce

On July 8 2021, Kritica Economica organized a debate in the cultural center of Lecce, Manifatture Knos. The event called “Beyond Draghi: rethinking post-pandemic economics” hosted Professor Massimo Amato (Bocconi University) and Lecce’s mayor Carlo Salvemini. Following the debate, we interviewed the Mayor on the long-standing Southern issue and the complex management of local public finances in times of covid.

Q: As recent ISTAT data from the 2021 annual report show, 2020 was a year in which emigration from Mezzogiorno (Centre-South of Italy) to the North fell by 14% compared to the average of the previous five years. An increase in flows from northern cities to rural areas was also observed. Is it possible that the ‘renaissance’ of Mezzogiorno can start from the natural and social amenities it can offer to the so- called smart workers, or do we need a more structural approach to deal with the North-South disparity?

A: It is difficult to think that a series of variables, such as the mild climate, the beauty of the landscape, the lower cost of living, a less competitive social environment, which have always characterised Southern Italy, could generate a reversal of the negative migration trend that has lasted for decades or more. In my opinion, there are other aspects that have affected this figure. Above all, the fact that big cities can no longer by definition guarantee better living and working conditions for immigrants, generates return flows or a decrease in departures. The economic crisis, which has followed us steadily since 2008, together with the increasing digitalisation of labour relations and the strengthening of opportunities offered by growing sectors in southern Italy – such as tourism – certainly affect the movement dynamics of young southern workers. It is up to the territories of Southern Italy to find the strength to create new opportunities by relying on the changes that have affected the Italian and European economic and production system in recent years.

Does digitalisation offer different possibilities than in the past, in terms of the logistical relocation of locations or individual human resources? It certainly does. We have seen this during the pandemic: in the advanced services sector, a large number of workers in high- tech companies have been able to continue working together, but remotely. This dynamic is also affecting other sectors that until recently generated considerable movements from the South to the North, such as university education. It will be necessary to verify whether, when conditions of normal movement are restored, any of the exceptions that we experienced during the pandemic will continue as a new normality, thus further increasing the figure of reduced migration flows.

Q: Data on young people aged 15-29 in Southern Italy who are neither employed nor in education or training (NEET) is dramatic. The incidence is higher than in 2008: 32.6 per cent, twice as high as in northern Italy. The NEET condition seems to be influenced by the employment of parents and by the educational qualification obtained, factors that are easily correlated. The South of Italy has the highest share of young people who drop out of school at secondary level, 46% of the Italian total. In your opinion, how can these disparities be addressed and how can greater intergenerational mobility be encouraged, particularly in the Apulia region?

A: This is a dramatic fact, because it involves energies that should trigger processes that can no longer be postponed, such as the necessity of generational change in workforce. Instead, they remain at a standstill. The dramatic figure of the NEETs bears witness to the failure of policies that have essentially divided the labour market in half: on the one hand, the guaranteed, unionised, and rights-holders, and on the other, those who have been asked to bear the burden of flexibility alone in the face of the growth and greater productivity processes that should have been provided. This was not the case: today’s labour market is not able to offer many young people the right motivation – mainly economic – to leave their parents’ homes and embark on an independent career. In many cases, these young people are still protected by the umbrella of rights – stable jobs, pensions, home ownership – that their parents were able to acquire and that they perceive as rights which are basically denied. It is in these rights that we need to invest, to overcome inequalities, to help young people get involved, but without asking them to jump through hoops or offering them depressing working conditions. It is a programme that must bring together labour and welfare reforms, which must go hand in hand and situate the citizen as a recipient, not just the worker.

Q: As we anticipated during the debate held at Manifatture Knos on 8 July, in a situation where the money seems to be abundant for the states and for central planning, the budgetary constraints of municipalities remain very tight. In this context, in 2019 the municipality of Lecce recorded payment expenses on interest and principal on mortgages and loans amounting to almost €14 million. Expenditure on education and the right to study – given that we were talking about social mobility – amounted to 5 million. Considering this strong discrepancy, is it possible in this context to imagine local administrations promoting investments in Southern Italy?

A: The pandemic has exacerbated the already difficult conditions of local authority budgets. The blockage of social and economic life has taken resources away in terms of tax revenues and tariffs that have not been compensated, or only partially. And, even more serious, local authorities have not been granted the possibility to act in derogation of the Stability Pact. In a context in which the needs and demand for public services have grown, we find ourselves having to guarantee more with fewer resources. In the case of the Municipality of Lecce, an institution in a multi-year rebalancing procedure, with current expenditure mostly contracted, the margins for financing policies that go beyond ordinary management are practically non-existent. Without a shred of doubt, this is an unsustainable situation, in which it is extremely difficult for municipalities to make commitments of any kind.
It is urgent for Government and Parliament to strengthen the operational capacities of municipalities, which are not – as proposed by a deep-rooted prejudice – places of inefficient spending, hostage to local ruling classes concerned only with ensuring consensus. Contrary, they are the first institutional interface for citizens, providing public services that are citizenship rights and safety nets for the weaker population groups that during the pandemic have been helped by the work of municipalities, assisted by social associations. Putting Municipalities and mayors in a position to operate at a time when, not investments but the current expenditure that guarantees the functioning of the services is highly inadequate, means guaranteeing the social and economic stability of the country. Anci – National Association of Italian Municipalities – has been saying this for some time, and I hope that the message will finally be understood and taken on board by the Government.

Click here for the interview in Italian!

Giorgio Michalopoulos è laureato in Economia alla Bocconi. È nato, legge libri, morirà

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