During the Growth Decree, I, together with the co-speaker Raduzzi of the Five Star party, proposed the amendment to convert deferred tax assets into tax credits for up to €500 million in the South of Italy. The amendment created the perfect regulatory framework to push forward many business combinations (e.g. generational changes, capitalization and M&As as means of growth) and proposed a suitable platform for banks, namely the Poplare di Bari, to become important Southern aggregators.
Popolare di Bari emerged victorious from the Tercas state aid affair. This was a very important communal win, conveying a positive international image of Italy. In addition to rescuing the banking institute and its bondholders, support was given to the Italian system which, at the time, experienced very difficult circumstances. Considering the number credit assignments, the weight of Tercas was enormous for the Pugliese institute to maintain..
The situation generated a significant amount of DTA which, based on primary and purely accounting standards adopted for growth, could have become tax credits and rectified the Institute’s parameters. Instead, political action by Premier Conte, who yesterday sang victory for the rescue of the Institute but did not work with his Minister of Economy to make a feasible normative law for the South, was missing. The failure to act and to make a decision have increasingly distanced the project from popular integration (there are still subjects that must be helped), which provided a way out for the southern banking system, which is among the weakest economies in Europe. Our DTA amendment made the process possible for the first time.
The operation makes industrial sense, but was born under an unlucky star. Medio Credito Centrale’s customer acquisition was passed off as yet another bailout (using €900 million of taxpayers’ money) from a bank whose parameters (keeping an eye on Google’s Texas ratio) have been long ruptured. As usual, the fruit has been left to ripen until it almost rots.
The same can be said of raising the deductibility of investments in innovative startups from 30% to 40%. The revision was the primary rule in the Budget Law last year but now, according to the Ministry of Economic Development, it is no longer applicable.
In short, our current government is one of missed opportunities and late interventions. We have at our hands a promising regulatory framework and social fabric, however the former often remains a dead letter and the latter is ignored. There is a problem of democracy. Laws drawn up by a parliament elected by the citizens according to universal suffrage, often do not see the light (sometimes implementing decrees or community authorizations are missing). Additionally, the current government in specific, does not distinguish between “peanuts and elephants”.
We wanted to give effective tools to the South. The DTA growth amendment together with the enlargement of the so-called regime of repatriates could have provided a significant increase in the tax-free portion of the Sothern tax base for those, Italian or otherwise, who decided to live, work and create enterprise in the region. Instead, Conte, Di Maio, Gualtieri et al. decided to assist the “undeserving” South with the typical care package rather than with tools that would give the region a competitive advantage I believe it deserves.
The usual witch hunt has now begun, as if naming a culprit solves the problems. It is paradoxical to think that with this type of intervention, the bankers that Count Bis would like to punish are called into play again, since shareholders generally have the right of option. It is further paradoxical if we consider that this colorful majority has once again postponed the installation of the Commission of Inquiry into the Banking and Financial System, originally scheduled for 4 September 2019. It is clear that Count Bis considers that medals pinned to the chest matter more than substance, that to designate a guilty party matters more than taking responsibility –– the opposite of what I will teach my son who was born last Friday.