Fiscal stability is on the minds of many Americans as the sequester deadline looms.
There’s been much discussion about how unpleasant the cuts could be, and how they might slow down the economy.
Europeans are brutally familiar with that kind of austerity.
Anchor Marco Werman hears the views of Italian journalist, Gianni Riotta, who’s currently teaching at Princeton.
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Marco Werman: Fiscal responsibility is on the minds of many Americans as well and as the sequester deadline of this Friday looms, there’s been much discussion about how unpleasant the cuts might be if they come and how they might slow down the economy here. We’re wondering how that sounded to a European whose country has been forced into pretty drastic austerity measures by the international community, including the US. Italian journalist Gianni Riotta has lived in the US at different times and is currently teaching at Princeton. So, Gianni, as an outsider, someone whose own country is living [speaking Italian], can you give me a sense of this sequester business here?
Gianni Riotta: You know, the first thing I should think about myself because I’ve elected to live between Italy and the United States that seemed about on the verge of physical cliff, so there should be something wrong with me. I guess that there is something in common actually and the public opinion both in Europe and the United States does not want to renounce to the welfare state and to the entitlements that we have in the post WWII era, and at the same times doesn’t acknowledge that with more taxes in the recession, we cannot afford it anymore. And so the contradiction and all this political instability comes out of that. But we still want to live like our parents did, but we don’t want to pay the taxes or to do all the sacrifices in order to afford that in the global world.
Werman: So we’re talking about two different types of austerity here, the austerity that the Eurozone thought it was creating and sequestering here in the US. For you, what does austerity mean, what does it look like when a government really slashes spending?
Riotta: The first time I heard the word austerity and this English word became a household name all over Europe was in 1973. You remember when oil was double and triple after the Kippur War and people in Europe are saying we should lead in austerity. The problem is that we are not used to austerity anymore and our parents and our grandparents, they were used to living in austerity because austerity was their everyday life. It’s difficult for us to do that. We should realize that the good old days are gone forever. This is what economists like Rajan or Rogoff call the new normal. This is our new normal life and we should get used to it.
Werman: Now, your home country Italy is one of several in Europe that have been pressured into pretty tough austerity measures, partly by Washington, which should be said. So how does it feel to be here and seeing politicians in the US complaining about austerity now. Feels good or no?
Riotta: No, yeah, it’s funny because you know, I have two American kids and so my son asked me aren’t those people crazy in Italy to hold such a stalemate? And I say yes, might be yeah, but at the same time people in Europe ask me President Obama and congress fail to find a compromise on fiscal issues, aren’t they crazy? It’s always difficult to find a political compromise these days. The public opinion is very, very, very hostile. They don’t want war of words, they don’t want compromise.
Werman: So meanwhile in your home country of Italy, what hope do you think there is now for pro austerity reforms to continue, especially with political gridlock or this [speaking Italian] lock?
Riotta: Zero. Zero because as your listeners maybe aware, we have the two parties pretty much died, the Berlusconi center right and Mr. Bersoni center left. And there is this third party, the Five Star party, lead by the former comedian Grillo, that got 25% of the votes. So who’s gonna ask the public opinion, tighten the European belt even more, pay even higher taxes, work even longer hours, retire even a few years later when he knows that the other political parties will complete jump and say no and try to make a gain in the polls. I don’t see any leader that would be serious enough to propose reforms.
Werman: Italian journalist Gianni Riotta with the view from Princeton, NJ on sequestering and austerity in Italy. Thank you very much.
Riotta: Thank you.
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