What’s wrong with the Calderoli bill on differentiated autonomy according to Bank of Italy

There reform for differentiated autonomy signed by the Northern League minister Robert Calderoli continues its course, but pursued by many shadows. After the approval completed by the government, the six months began for the recognition of the specific matters to which the Lep should be applied, the “essential performance levels” that the individual regions will have to respect; another six will then be needed to define the costs and needs of each of the twenty local authorities, in coordination with Palazzo Chigi. However, right now that we are entering the heart of the reform, it is the government that expresses doubts about the prerogatives of the government bill Bank of Italyin a report which, in addition to critical observations, offers some advice on how to direct the next steps.

The key word is “graduality”. Bank of Italy calls for prudence, to “carefully evaluate all the implications of implementation”, thus avoiding “the risk of triggering processes that are difficult to reverse and with uncertain outcomes”. There are in fact “some aspects neglected by the bill”, writes the organ of Via Nazionale: and not trivial aspects. There are three diktats of Bank of Italy: avoid a marked differentiation between the regions, which would end up creating an even more patchy Italy; preserve public finance balances, aligning resources with needs from time to time; ensure transparency and reporting of expenses incurred.

The first point is, in fact, a warning not to sacrifice the country’s already battered compactness on the altar of competitiveness. “The benefits deriving from the stimulus to greater competition between the various areas of the country must outweigh the implicit costs of a marked regulatory differentiation”, reads the report. Because the indispensable prerequisite remains that of “containing the risks of widening territorial differences”. Bankitalia puts a solution on the table: “The granting of forms of autonomy could be subordinated to an investigation for each individual matter”. That is, the report continues, “a documentation of costs and benefits” deriving from the “possible transfer of functions”.

The other two points concern spending management. The alignment of “tax resources with the evolution of needs” – without prejudice to the parameters established by the Lep – must follow “mandatory procedures for verifying the expenditure incurred”. And here we get to the real crux of the matter. The Calderoli bill, in fact, provides only for an “optional” monitoring of the funds used. Bankitalia, on the other hand, reiterates the need for “a rigorous assessment” which thus provides a precise picture of how state finance is administered.

However, there is an upstream problem, to which Palazzo Koch’s report also implicitly alludes. The text approved by the government, probably for the purpose of reassurance, repeats several times that the agreements with the regions will not entail “new or greater burdens for the public finances”. But the enigma remains as to how, concretely, the Lep will be financed. A perplexity also shared by the European Commission which, in its report on Italy dating back to last May, underlined how “without additional resources, it could be difficult to provide the same essential levels of services in historically low-spending regions”. With the specter of uncontrolled debt divided among the twenty regions, just now that the new EU Stability Pact should once again regulate public spending.