Beautiful Denmark. Copenhagen, with its bikes and the students that slide over them as if skating. I like Copenhagen, its elegance, its harshness. Its brick-houses that speak of gusts of winds over the sea that smash against them, protecting fishermen once they are back home. The sea and the safety net, I think.
Yesterday with Danish pension fund managers discussing about Italy and Europe. So important to bridge differences. I was asked as to whether Italy would ever accept decline in nominal wages of 20% (like the ones that are added onto Greece now) and I said: never. But the most important part is that I was surprised, in Italy simply nobody is even considering this as a possibility. But we would accept decline in real wages driven by inflation, if inflation were in our hands as it is in Denmark with its Danish Central bank. What we have now in Italy is decline in real wages due to a recession: the size of the pie is getting smaller and smaller. We can’t protest against it, because there is no decree, only less capacity to produce wealth and happiness, as they instead do in Denmark (see video).
We discussed about raising further taxes in Italy, and I try to convince them that no, either we do it as the Danes do it, more taxes only for more spending, so that we multiply income, or no thank you. We have done it so many times, more taxes, less income, more budget deficit, more debt, that we should know better, shouldn’t we?
I tell them that in Italy right now we are very much talking about importing the Danish labor reform, with unemployment subsidies and I say to them: “pray we don’t, the morning after you will have Italy with 25% unemployment, all lining up for a subsidy”. They smile, and they know I am right. There is not one ideal policy for all countries of the EU. Europe is diverse, and together our diversities are a strength. Separated, our diversities become a handicap, a way of fighting and bickering.
I meet with my Greek colleague at the Conference and they, the Greeks that teach in universities, the intelligentsia, are ready to unite with other professors in other Southern countries against the countries that require austerity from us. It makes me sad, this division of North and South of Europe. We are so potentially capable of working together, but distrust is mounting because of the wrong policies. It is crazy, I agree, this package of austerity that has just been approved for Greece, instead of accepting to share the burden for Greek citizens and support a 100% default. “How will you be able to cut wages further?” I ask him. “With rents not going down? How will people pay for the house?” he replies. “Maybe deflation will bring rents down”. “Before that, houses will be burned”.
Our House is burning. And no firefighter is in sight.