Livolsi: “The Green Deal must not shut down Italian industry”

The comment of Ubaldo Livolsi, professor of Corporate Finance and founder of Livolsi & Partners S.p.A., in the new appointment with his column with the Dire agency, edited by Angelica Bianco

ROME – “Our industry, the second largest manufacturing in Europe, is slowing down. According to Istat, industrial production marks yet another decline in March. There have now been 14 consecutive negative months: the latest increase in the index dates back to February 2023.

The decline affects almost all major sectors. In particular, clothing and accessories (-9.3%) fell compared to March 2023, means of transport (-8.8%) and machinery (-5.9%). Chemical, petroleum and pharmaceutical products are an exception. Another fact makes me reflect: in 2010 – a period that was not overall favorable for our economy – 400 thousand new businesses were born in Italy, in 2023 the figure dropped to 300 thousand”.

Thus begins a reflection on the trend of the Italian economy by Ubaldo Livolsi, professor of Corporate Finance and founder of Livolsi & Partners S.p.A., in the new appointment of its column with the Dire agency, edited by Angelica Bianco.

“It is true – he explains – as has been recalled by some observers, the long wave of high prices still weighs on Italian industry, which for well-known reasons – starting from the increase in the cost of energy and raw materials, followed to the Russian-Ukrainian war – has weighed heavily on the last two years and had important effects on family spending and consumption.

However, in my opinion, the real problem is that Italy – and Europe which necessarily influences its choices (too often even those that are not obligatory) – has almost forgotten the essential and fundamental role of industry.

In 2023, the export of Italian goods around the world exceeded 660 billion euros, but the impression is that it is believed that the manufacturing sector as a whole can live on income. However, nothing is taken for granted.

It seems that our country lives by reflection of that Eurocentric vision entirely centered on the European Union’s green deal, aimed at making the area of 27 the first competitive and zero-emissions area in the world. Meanwhile, despite benefiting from eight years of zero interest rates and relatively low energy costs, it has grown less than the United States and China.

Thirty years ago the latter represented only 4% of world manufacturing, now over 30%. The desire, although essential and shareable, to achieve a sustainable economy, is creating paradoxes in which China itself seems to benefit.

If Europe sets a 2035 deadline for putting combustion engines in the attic, for its part the Dragon produces 90% of photovoltaic panels, 60% of wind technology and 75% of batteries for electric cars”.

“The keystone, especially as regards Italy, is industry – underlines Livolsi – Our country has the advantage, in addition to being able to start from the fact of being the second manufacturing economy in Europe, of having, on the one hand that ability, appreciated throughout the world, to combine creativity, quality, taste and know-how with technology and innovation (made in Italy), on the other our companies and our entrepreneurs have that attitude of being rooted in territories and to create a team effort: let’s think about the system of industrial districts, which have made the fortune of our economy – and which should be re-strengthened and whose paradigm taken as a model and transplanted into less industrially developed territories. Our Government – and ours recent Executives – have done a lot to support our industry: from the Industry 4.0 plan – which in its first year distributed 13 billion in tax incentives and 10 in investments – to the new Industry 5.0 initiatives within the Next Generation Eu – with the system of interventions by the latter which will help the industry if it manages to change the country system as a whole: administration, taxation, justice, infrastructure, schools and universities”.

“I would like to conclude with an appeal to the banks – writes Livolsi – who are making profits and whose results are appreciated by the market, as demonstrated by the record levels of capitalization of the main Italian institutions. The hope is that this wealth does not translate into just the umpteenth return of value to shareholders, but that these resources are also directed towards investments, fueling the real economy – on which the solidity of the banking system also depends – and financing businesses, families, young people and new companies”.