Brexit could be an opportunity for Italy. Milan as the new ‘City’

Borsa Milan Palazzo Mezzanotte
The Palazzo della Borsa in Milan

Arguably, the ‘Made in Italy’ and ‘Dolce Vita’ contributed to the establishment of a world-wide commonly accepted representation of us Italians as the smiling, happy, problem-solving and therefore optimist people who sometimes we Italians can be.

But, as a paradox, the same Italians of ours, who enjoy the occasional stroke to their national ego, cannot help but engage in a perverse, extreme form of self-deprecatory sarcasm against themselves and their country, which they willingly undertake whenever and as soon as they can: such an exercise has achieved so high levels of popularity that it is now seriously threatening football as our main national religion.

The last opportunity to publicly practice sarcasm was given by an article published on the ‘Corriere della Sera‘ the last 8th May 2016 by Francesco Giavazzi, one of the most influential economists in Italy (and one of the less amicable to the current government), who was trying to analyse (and implicitly to suggest) how to transform the possible exit of Britain from the EU into an opportunity for Italy.

In his writing, Giavazzi reported how several financial institutions, which are currently based in London, could be finding convenient to relocate their headquarters and operational centres in continental Europe, and in the Euro currency zone. Three main sites are the best natural candidates: Frankfurt, Paris and (how dared he!) Milan.

In the paper he provided several arguments on why Milan could be (or better could become) an appealing option for those who might move from the City: out of the others, he mentioned employment laws and cost of labour in Italy, which are already among the most favourable ones in Europe, and definitely more flexible than in France, together with a relatively stable banking system.

Financial institutions could relocate to Milan, where labour cost is one of the most favourable in Europe

Granted, as the same Giavazzi did, that several conditions would still need to be fully met if Italy wishes to provide Britons with a really attractive package (a deep reform of taxation and the fiscal system, improvements in the regulation of the banking industry, overall improvement of the quality of life in Milan), one would expect such a paper would have been received as an incentive to action and self-encouragement rather than being submerged by criticism.

But no, of course not: we are Italians, and we cannot even imagine why someone would actually like to live in Italy! Last but not least, how could we ever assume, especially those of us Italians who left Italy, that people who work hard for five days a week might actually enjoy living in a couple of hours by car from the Riviera Ligure?

So, some of us unexpectedly found themselves to be all keen experts of international economics and felt entitled to teach one thing or two to Giavazzi: a broad spectrum of creative comments suddenly was available for the community to enjoy and share a laugh with.

The opinion of Giavazzi was called ‘a delirium’, ‘science fiction'; the Corriere was defined ‘a satirical website’, someone said ‘Britons would not come to Italy even were they offered zero taxes’ (really?); the idea that banks come to Milan for taxation or regulation purposes was described as ‘plainly ridiculous’,

To be fair, some other comments were of more technical nature and provided suitable counter-arguments, for example by comparing the HMRC and the Italian ‘Agenzia delle Entrate‘, which would not give Italy any advantage against Frankfurt or Paris. But this is something Giavazzi had well clearly written in his paper too, and all the sarcasm against him, if anything, should have been better spent against the political system, one would have expected.

So, where has optimism gone? Is it because the Italian political system is what it is, and no one can change it? And if so, why to bother? Either way, welcome to hyper-sarcastic post-optimist Italy.

Maria Latella at Radio 24 discusses with Francesco Giavazzi on why Brexit could be an opportunity Milan cannot miss

2 Comments

  • Stefano says:

    I couldn’t agree more with the article. Any kind of optimism is now seen as a delirium in Italy. To be honest, in a post brexit scenario I think that frankfurt & Milan will be the new financial centre in Europe. Emigrants everywhere in Europe are usually frustrated and can’t think of their country as a possible hub in the continent

  • Alessandro says:

    Difficult and unlikely, but Giavazzi’s point is surely a possibility. Lombardia would then face a resurgence of pressures to ‘exit’ Italy very quickly…

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