A Genoa bridge that collapsed last month killing 43 people is privately owned, but a key factor that has slowed basic infrastructure investment in Italy in recent years is the fault of the EU, reports Andrew Spannaus.
By Andrew Spannaus
in Milan
Special to Consortium News
A little over a month ago, on August 14, a highway bridge collapsed in the middle of the Italian city of Genoa, killing 43 people, damaging the populated areas below, and interrupting a major traffic artery connecting the two sides of the city. The bridge had been built in the 1960s, with a construction technique that had been criticized by some experts over the years, and its decay was obvious; it had already undergone various repairs, and a new round of extraordinary maintenance was planned for this fall.
The maintenance didn’t come in time. As heavy rain fell in the area, cars and trucks dropped from a height of 150 feet, causing death and injury, and marking a national tragedy that has gripped the country.
Why did this happen? Italy’s highway company was privatized in 1999, and concessions were then granted to operate the roads. The largest concession-holder (with about 50% of the network) is currently Autostrade per l’Italia S.p.A., controlled by the Benetton family, founders of the eponymous fashion brand. They make a handsome profit off of highway tolls – among the highest in Europe – and they are responsible for maintenance and investments, which have stagnated even as tolls have more than doubled in the past 25 years.
Autostrade’s defense in regard to the disaster is that while concerns had been raised about the bridge, there was no indication of imminent danger. It’s a weak argument, considering that in Genoa the bridge had been the subject of public debate for years, with some seeing it as “a disaster waiting to happen.” After initial resistance, Autostrade ultimately responded to public pressure by allocating 500 million Euros (575 million dollars) to compensate the families of the victims and rebuild the bridge.
Collapsed Bridge: Privately owned. (Wikimedia Commons)
The first response from Italy’s populist government led by the Five-Star Movement (M5S) and the League, was to channel rage against the private company, using popular arguments against the neoliberal policies of privatization and budget-cutting. They are right, of course, that the disaster came on the watch of a private company, which is claimed to be more efficient than the public sector. Italy’s highway system works fairly well, but there’s no ignoring the need for upgrades to the parts of the infrastructure that were built during the economic boom of the 1950s and 60s, which have reached the end of their useful life.
Yet tolls are already high, and the private concessionaire wants to guarantee its profits; who’s going to pay for all the work that needs to be done?
The two Deputy Prime Ministers of the Italian Government, Luigi Di Maio of M5S and Matteo Salvini of the League, have led the charge against Autostrade. Di Maio has threatened to revoke the concession and re-nationalize the highways, although the institutional pushback has been strong. Salvini, on the other hand, immediately pointed the finger at European Union (EU) budget constraints: “Investments that save lives… must not be calculated by the strict, cold rules imposed by Europe”, he said on Aug. 15.
EU Hinders Infrastructure Funding
The disaster in Genoa was not a direct consequence of cuts to the public budget, since the section of the highway is run by a private company, as centrist politicians and much of the major media jumped to point out. But Salvini’s broadside pinpointed an essential issue for Italy – and many other European countries – today: massive public investment is needed, but EU budget constraints prevent it.
Salvini: Leading the charge against Autostrade. (Wikimedia Commons)
The Italian government is responsible for the public welfare, but it is unable to guarantee that public welfare. There are many reasons for this, starting with the country’s massive public debt – 131 percent of GDP, among the highest in the world – and the inefficiency of public spending. The construction tender process is slow and complicated, and tangled bureaucracy means that even money allocated is often left unspent for years.
These are long-term problems that require legislative reforms and the reorganization of priorities. The current government has promised to streamline the tender system, and also to direct available funds to the most urgent projects.
Yet the key factor that has slowed down basic infrastructure investment in Italy in recent years has been the EU budget rules, which after originally setting a maximum deficit of 3 of GDP, now make it mandatory to fully balance the budget, although countries are allowed to move gradually towards that goal.
The Italian government is constantly under pressure to cut public spending in order to get closer to a zero deficit every year. This, despite the fact that Italy has run a primary budget surplus (i.e. before interest on the public debt) practically every year since 1992. Public investment has fallen continually over the years; by more than one-third at the national level, down to 2% of GDP, and by as much as one-half over the past ten years when it comes to local governments.
This happened in particular because in order to meet the EU budget criteria, Italy adopted something called the “Internal Stability Pact,” to go along with the European “Stability and Growth Pact.” The internal version used the budgets of municipalities, provinces and regions to help reach national budget goals. In essence, the local authorities were required to cut spending even if they had money in the bank, so that the government in Rome could count those funds to meet the EU rules.
The harsh austerity implemented from 2011 to 2014 made things even worse. After the spread between Italian and German bonds on the financial markets spiked in the summer of 2011, leading to fears of financial catastrophe for Italy and the Euro system as a whole, technocratic governments rapidly moved to slash spending even more.
This policy, dictated by the European Central Bank and the European Commission and enthusiastically implemented by neoliberals in Italy, led to a true disaster. The result was a 25% drop in industrial production, and a sharp rise in unemployment and poverty. And not surprisingly – at least to rational people – the economic contraction ended up making the public debt even larger.
Who Should Decide?
When after the bridge disaster in Genoa the government promised to rebuild the country’s road infrastructure no matter what the cost, the reaction was swift. On the one hand, EU officials such as budget commissioner Guenther Oettinger denied Europe is responsible for lack of investment in Italy, and on the other, financial markets rapidly increased the risk premium on Italy’s state bonds.
The question is: why should financial markets or technocrats decide whether Italy’s roads are safe? The populist government was elected on the promise of challenging EU austerity policies, and the coalition agreement between M5S and the League sets two main priorities in this field: increasing public aid to the poor, through a form of universal income, and simplifying and lowering the country’s high tax rates, to help both businesses and individuals.
The main fight in the government right now is if they will actually carry through on these promises, despite the pressure to toe the line on the budget criteria. Economics Minister Giovanni Tria seems cowed by the pressure from the bond markets, and clearly fears antagonizing the EU. Di Maio and Salvini insist on keeping their promises, touting the heretical, but true, argument that productive investment actually produces growth. Something has to give. The hope is that it won’t be another bridge.
Andrew Spannaus is a journalist and strategic analyst based in Milan, Italy. He was elected chairman of the Milan Foreign Press Association in March 2018. He has published the books “Perché vince Trump” (“Why Trump is Winning” – June 2016) and “La rivolta degli elettori” (“The Revolt of the Voters” – July 2017).
If you enjoyed this original article please consider making a donation to Consortium News so we can bring you more stories like this one.
I don’t want to be pedantic, but Salvini’s photograph is very outdated, it is not easy to identify him as he currently is, i.e. with the beard and larger.
This is already happening in the USA. I believe awhile back, a bridge collapsed in Minnesota (?). ANY TIME you hear the
words “privatization” or “deregulation,” you’d better hang onto your wallets & purses, because it’s GOING TO COST YOU MONEY!
Privatization and deregulation are nothing more than the transfer of money from the “commons” (the taxpayers) to private
individuals and corporations.
Also, this thing about “globalism” is nothing more than Nazism / corporatism packaged in a new label, As the Bible says, “There
is nothing new under the sun.”
For all you people who think that privatization / deregulation / “free trade,” etc., is a panacea to our country’s problems, you’d
better brush up on your ACTUAL HISTORY of the United States…after World War II, when UNIONS were at their strongest
and this country didn’t have all of this deregulation / privatization / free trade NONSENSE and their was some protection from foreigners dumping their cheap goods into the USA, our country was at its strongest and overall prosperity was increasing.
NOW the United States has gone from being the world’s largest CREDITOR nation to being the world’s largest DEBTOR nation. Also
record numbers of private and corporate bankruptcies, record numbers of foreclosures, record numbers living in poverty, etc. As Dr. Phil likes to ask his guests, “How’s that working out for you?” (signed) Brad Anbro
This shows how the EU is a fraudulent front for parasitic capitalism. Privatisation is a byword for corruption as this article so tellingly reveals.
I believe in Privatisation – as far as I’m concerned it is the only way to get things done.
REGULATIONS
What happened to building requirements & regulations ??
Where were the watchdogs ??
That said …
Toll Roads never make PROFIT – never.
From the moment they are open for use they require service & maintenance = MONEY / EXPENSE
Toll Roads are built with one thing in mind PROFIT – the cost of running & maintaining the Toll Road are not factored into the equation.
All other thoughts are relegated to the trash can.
It is up to the government to make sure that correct health & safety procedures are followed.
I myself to traveled via that bridge numerous times when I lived in Italy most recently about 20 years ago just visiting on my trip from skiing at Chamonix, to Modane through Trafforo Di Frejus, (20 miles long) longest European tunnel at that time before channel tunnel was built, to Ventimiglia, Torino, Genoa, San Remo to Monaco and Niece, all along Italian and French freeway or rather tollway as all freeways are tollway in those two countries.And here is the point in contrast to US were freeway system was built and operated by government for sole purpose of Cold War defense imperatives, the same imperatives of Cold War, Italy ‘s north south freeway system connecting US and NATO bases notably from Aviano US Air Force base to Naples , US Navy base, was built on backs of motorists and taxpayers and some private capital.
As tolls were being collected mafia infestated local governments stole that money and put exuberant costs on repairs as mafia controlled construction business.
From second only to Germany system of freeways in 1960s in 1990s Italy had worse freeway system except for EU Easter expansion countries.
While last decade or so austerity is blamed and it is partly truth the actual end of Cold Warfreeways were made no longer strategic and hence simply were allowed to be looted by corporations and local governments bribed to look away from coming techical collapse and deadly disasters as Italian as well as American engineers warned for decades, and low and behold deadly collapses happened, peole killed as a matter of calculation of profits
Hmmm…seems like this article gets it wrong in two huge and obvious ways.
First, spending on this bridge is not subject to the EU rule at all. The private company that owns it simply needed to make the responsible decision to accept short-term profits at a slightly less “handsome” level by spending what makes sense to ensure the profit flow would continue over the long term.
Second, the EU limits deficits, not budgets. There is an obvious way countries can meet the EU requirement without cutting spending. And in fact reducing the national debt by raising taxes on the wealthy has a bigger effect on inequality than the actual tax revenue alone. Who do you suppose collects much of the interest governments pay on their debts?
Two points here:
NUMBAH ONE:
The EU’s rule for a maximum deficit of 3% of GDP was not based on ANY economic research OF ANY KIND. The number was simply invented on the spur of the moment by some French president.
NUMBAH TWO:
The Italian prime minister who privatized Italy’s expressway system was Massimo D’Alema, the boss of the former Italian COMMUNIST PARTY! And the current EU foreign policy honcho, Mogherini, who is enforcing the Pentagon’s priorities in Europe, was ALSO a prominent member of the Communist Party youth wing.
Things have gotten so bad that you can’t even trust the Communists any more to safeguard state property from the parasitical financial oligarchy.
So we have to rely on a far right-wing party like the Lega to defend the people against the combined forces of finance capital and reformed communism.
They can and they do buy souls. From communist, socialist, capitalist, religious or any other field.
Targeting the group and not recognising the natural reaction of an ape in certain condition will lead you to wrong conclusions.
It might be of some comfort to know that with all the money he got from us regular folks who travel by autoroute, one the Benetton family bought a 50m yacht which is the first in the world to have a Green Star for some eco-correct feature it has.
Apparently the little boat is registered in Malta so poor Mr. Benetton can save some hard earned cash on Italian taxes
With his little boat, Mr. benetton wants to sail around the world while working from his boat. God only knows what exactly he means by working. He personally designed his boat, and had unusually large kitchen installed because he wants to do the cooking: how frugal
It might be of some comfort to know that with all the money he got from us regular folks who travel by autoroute, one the Benetton family bought a 50m yacht which is the first in the world to have a Green Star for some eco-correct feature it has.
https://www.corriere.it/Primo_Piano/Cronache/2007/09_Settembre/21/superyacht_benetton.shtml
Apparently the little boat is registered in Malta so poor Mr. Benetton can save some hard earned cash on taxes
http://m.dagospia.com/un-lettore-a-dagospia-anche-lo-yacht-tribu-dei-benetton-paga-aliquote-agevolate-a-malta-181374
With his little boat, Mr. benetton wants to sail around the world while working from his boat. God only knows what exactly he means by working. He also had a huge kitchen build on his boat because he personally want’s to do the cooking: how frugal!
Your put your finger on it Andrew. “Privatization” today means “Invitation to Exploit the Commons” and a way for governments to shirk the duties to the for people, for which they were created in the first place. It is a grotesque cancerous form of capitalism gone wild, and private greed is at the root of it. What can be done to rein this “Privatization” in, and put the general welfare of people back on the public docket? Maybe people getting involved in their democracies instead of shrinking their worlds through their cell phones? Thanks for your insights Andrew, and to Joe Lauria of Consortium News for putting you on page one.
So which would you choose: government corruption in which corrupt government reps award premature and criminally lucrative contracts to friends and family or the greed of a private company?
Looks like you are screwed, no matter what.
Even members of an elected town committee can be bribed or intimidated.
The least bad solution would be, if the upper middle class could unite and rule (together they might represent sufficient power to run the show, as they did when the United States was formed).
Too bad, the upper middle class has its assets in the hands of the vultures, which deprives it from any chance for wielding power.
The only solution seems to be the criminalization of betting on the stock market, but that would likely cause a societal breakdown even in the best-case scenario.
So which of your fingers would you like to bite?
Gianbattista Vico is my answer to the question in hand. He is the father of the term The sovereign state.
Neo/liberal/conservative dictates have been forced on the general public further more the formation of the German superstate EEC has basically dictated to most europeans of how the world works. Basic economics tells any one who would bother to study it is if one were to increase investment one would increase the velocity of money. Decaying infrastructure has been a grossly understated problem with Italy and southern europe europe in general.
My point is that after three decades of failed social,econimic and political policies isn’t time to rethink and stop the total destruction of our political ,economic and social institutions b4 it is 2 late.
The Corporate State has failed us. It failed us after the first world war why would it be any different in this post truth world.
Balance is key. Most issues within a nation should be solved by that nation… by their own people BUT there are four areas of services that can be globalized and still allow all nations to remain independent from one global authority:
A.) Medicine
B.) Waste Management
C.) Drinking Water
D.) Anonymous/Decentralized Digital Currency
All other issues, roads, restaurants, consumer goods… all of it can be managed and figured out by local private investment/entities and/or a mixture of that and local government. This keeps power in the nation’s hands and not a global authority who has zero allegiance to anyone but power – http://globalproject.is/forum/showthread.php?t=3473
The EU had grave deficits at its inception. The inability of individual nations to control their own finances in a meaningful way (imagine if the US were not able to print money to solve its problems and required a balanced budget) has helped to produce a tiered system, with Germany at the top and other countries, like Italy, Greece, Portugal, Spain, their vassals, in perpetual debt peonage. Almost by design?
Nationalize the entire highway system and the rest of the privatized utilities and commons. I am talking about the US and the rest of the neoliberal thefts that have enriched the oligarchs.
Sorry to say but this article seems based on prejudice and one sided information.
Has the author talked with Commission people and representatives of the EIB that financed billions and more in Italy including on infrastructure ?
The general press had better articles on the background and based stories on audi et alteram partem.
Consortiumnews to me must strictly adhere to more thorough quality.
Please give us the other side paul. You want MSM BS, don’t come here! Privatization leads to neo-feudalism: privatize the profits, socialize the costs. You must live on the comfy side of the country club wall.
Still, this is really an opinion piece. Public sector corruption, incompetence an waste in Italy is endemic, thats why they do these privatisations. The real problem is really lack of economic growth and excessive public spending. Its not really only Italy thats the problem. Half of the EU countries are economically dead men walking.
Question how can you have economic growth without infrastructure and trade protection of key industry. If you think that isn’t the American system of Political economy that made the US the envy of the world in the last century you don’t understand history. You are right about Europe and also sadly the US over the past 40 years or so. Trump is on the right path wanting to spend 1.5 trillion on infrastructure to revive the economy but really. Should be closer to 5 Trillion and include development of fusion energy and space exploration.
@JB becuase the WASP political social and economic reality is all above board.
Real facts not fake news. Italy under la Prima Repubblica which is basically from 1948 to 1975 had the largest growth in production industrial capacity which in 1977 surpassed Great Britain and became the 5th largest western economy in the world. The vast majority of its industrial power house came from engineering family firms with less than 100 employee’s. Majour corporations like Alfa . Fiat . OM would subcontract all aspects of their vehichles which then would be assembled at one central area. All the roads rail and tell;ecommunincation systems were all under the Sovereign Repubblica Italiana. Uninionism was at an all time high. People worked were fed and housed .
Today there are two Italian realities. Those who earn 4000 plus Euros a month OKAY the rest circa 33 percent of pop are living from pay cheque to pa cheque and lucky to clear 1000 EURO’s.
OH I forgot we Italians are all on the take.
Indeed, was going to point out Italy’s little known, spectacular growth record back then myself – better than Germany or Japan’s. JB completely reverses the real cause of the growth problem – the starvation of public spending (except of course, as always, on the rich) in Italy as in the rest of the European dead men walking. Irrational austerity, which Italy followed somewhat even before joining the Eurozone suicide pact is the problem. It isn’t the cure for anything. And of course the stuff about corruption being a real problem is fabrication and illiteracy.
The deeper problem is the economic illiteracy of the MSM. The hard won lessons, the truth of genuine Keynesian economics discovered in the Great Depression, WWII and the postwar era were forgotten. Economics and much worse, the man in the street subjected to incessant propaganda, reverted to neoclassical trash enforced by the Euro and its austerity, that causes poverty amidst plenty, that causes nations like Italy to live so far below their means that they don’t even maintain their bridges! The Euro is a great means for converting first world countries into third world ones.
falcemartello, totally agree with your comment. This is only “anecdotal”, but in the 1980’s I worked at a business that needed high quality, silent air compressors for airbrushes. All our air compressors were Italian made, the design and build quality was superb, and the price competitive with any. Same with shoes, until the late 1990’s I could buy Italian shoes of superb quality and design and competitivly priced to the Chinese made crap, but now that’s all gone. Why? Its not that Italian industrial production was not competitive in design, build quality and price. It fact it was superior in all ways from the capitalist slave labor crap from Asia that fills the stores today.
sad and useless “discussion”.
ad hominem arguments serve no purpose.here in Holland we don’t do country clubs
@Paul arlman
Maybe you should do some real honest investigation on what the EEC Masstricht treaty is about . Further more neo liberal /conservative economic policies were rammed down the Europeans throat.
UNO: It was idicatated to all EEC members that reforming the political economic system with the proviso in entering into the UNION> hence nastionalized industries had to be broken up and deregulated and sold off. This included the roads and tele cominucation sectors of the economy. That was the trade off sell deregulate privitize and austerity programs you will be allowed to get EIC funding for infrastructure with the proviso that all public works contracts would be tendered to all EEC construction firms..
So go live in your post truth world and fact free society.
nearly continous nonsense.
@ Paul
Gee u must of been one hell of debater in ur time.
Concise reasonable factual reason and logic.
Facts verifiable fiduciary tables numbers graphs.
I gave you real facts.
Not one statement I had made is inaccurate or baseless.
Check the stats UN 1979 GDP WORLD WIDE.
Further more check savings index per population UN 1993 Italy was numero uno in personal savings only to be surpassed by Singapore in the following years.
Stick to Euro news or whatever you follow. but ever since the initiation of the Mastricht treaty of 1993 Italian economy from 1995 went through the largest merger and acquisitions in there industrial base that was unprecedented .
Once the Euro was introduced as the fiat monetary system for all of the EEC Italy virtually sealed its economic fate .
This is where to Europes emerged with Italy being shoved into the acronym state of the PIGS nation.
Facts and not your asinine country club jibe.
Politics and government should be all about having a smoothly running country (county, city, whatever) and fixing problems that come up. Nothing runs perfectly or even close to perfectly over long periods of time all by itself. Everything needs adjusting now and again. The one thing that politics and government should not be about is ideology. Ideology is for stupid people. It is for people who are incapable of thinking for themselves or anyone else and need a crutch of stock answers to fit any situation. Most people who’ve been around a while know that everything needs adjusting now and again and they know that stock, cookie cutter answers get good results only occasionally. My solution is to take all the ideologues and remove them from office and bus them off to the dark side of the moon. Replace them with people who can actually think.
If only…
During the Eisenhower era in the 1950’s, in the USA the highest income tax rate was over 90%. This was on income of over $200,000, which would be the equivalent of approximately $2,000,000 today. This forced the ultra rich to either spread their wealth around, or give it to the government. It was a great equalizer, and was largely responsible for the robust middle class we enjoyed in that decade. Now we are in a class war against the 1% who have taken over our governments and run the mega-corporations and banks that are sucking the people and the planet dry. I am afraid it will take a revolution or a nuclear holocaust, not just a bridge falling down, to change the situation.
You are right.
Taxes also prevented the concentration of political power to some degree.
Today you have a plutocracy in America.
But these principles are forgotten.
Instead we just hear the “I. me, mine” of we should keep what we earn, as though anyone earned anything in a vacuum without the many resources and services of the state.
But of course it’s the same kind of selfishness we’re seeing America undertake worldwide.
This was only possible in a pre globalized world. All this changed in the 80ies and 90ies. Today, if you tax the rich, they simple move their money elsewhere. If you want to change this, you will have to completely redo most regulatory changes done the last 30-35 years.
Yes, and that is nearly impossible because of “Industry Capture” of our Congress and our Regulatory Agencies.
@Skip Scott
Spot on.
In todays age IKe would be considered a left wing socialist to those who are stuck in their ideological bubble.
He initiated one of the biggest infrastructure bonanza in the history of the US> Route 66 upgraded and further more new large freeways connecting all majour hubs of US industrial capacity.
The problem we have today is that the vast majority of the sheeple do not know and reflect on past real growth and relate to growth as just a number IE: equity rising. but they forget to mention how many man hours it takes for the average individual to acquire such equity (Roof over thier head).
The average working class person in the 60’s and 70’s annual income was roughly = to one quarter annual gross income today it is more like one 15th the value of a home.
Wages for the average individual has not kept up to inflation and if one were to do the maths average wage earners have been in the negative territory since 1990.
Wealth gap in the west is the largest since the Gilded age and no one in our political social or economic class are addressing it or mentioning it. All we seem to get is slippery language of reform deregulate and austerity.
THE EMPEROR HAS NO CLOTHES.
Further more the elites oligarchs really can not see that we in the west are entering a Marie Antionete moment in our history and no one seems to care.
Not sure how the Benetton family gets a pass…
Profit over people is the problem–Neoliberalism the pro -corporate system of economic and political policies that disregard social and ecological consequences has to be opposed by the people. We are many–They are few.
Neoliberalism is the problem, same as it was in our “Robber Baron” era from the 1890s through the “Roaring Twenties”. It ended with the Great Depression (Which we are about to enter again). The solution will be a Green New Deal for the forgottenn 99%ers, bankruptcy reorganization, Glass-Steagall Reinstatement to separate speculative gambling from banking, and putting the Fed under Public control to serve the General Welfare, NOT allowing the 1%ers to gorge on profit-takings. How this gets done is likely to be messy, but, as you say, We The People are many (and well-armed), and they are but few.
@ Dick Spencer
The Corporate State
Mussolini wrote an op ed in a Northern Italian news paper. circa 1922-23 . First one to use that term basically merging state and corporations (fascismo) and low and behold who was the founder of modern day fascism. Benito Mussolini.
h
History would be a wonderful thing if only it were true.”TOLSTOI
“Victors write history not the vanquished”Giordano Bruno
“There will; always be an elite class”Gianbattista Vico
EU blackmail, plain and simple. privatization= cannibalization.
Also privatization ends up becoming neo-feudalism, with a new form of “Noble Landed Gentry” being created by gifting certain families with assets from the Public Domain…enclosing The Commons all over again.
Exactly Bob Herrschaft, and thanks to Andrew Spannaus for this article. Could any policy failure be more clear than the total collapse of “Austerity” and “Neoliberalism”? The simple solution seems to be a return to local currencies and a complex discussion of natural resources management. Thanks to both of you…