"Italy-USA: Acting Together Against Economic Crisis", Op-Ed by U.S. Ambassador Thorne
Rome, October 17, 2011
The following Op-Ed appeared on the daily "La Stampa" of October 17, 2011
David H. Thorne
U.S. Ambassador to Italy
(This is the English version of an Op-Ed published in Italian)
This year Italy celebrated its 150th anniversary of unification, in the company of the Vice President of the United States and other distinguished Americans. We celebrated together the long and rich history of friendship between our two nations and the inextricable links that bind our fates together. For 150 years Italy and the United States have been reliable partners and allies confronting global challenges. Today we face another common challenge to our futures in the shape of the economic storm that buffets both sides of the Atlantic.
The financial crisis of 2008 and 2009, and subsequent shocks, underscore the connection between the economic successes and failures of Europe and the United States. As capital flows increase exponentially and as the citizens of dozens of countries enter world markets for the first time, the global economy now rewards growth and punishes high public debt and economic weakness faster than ever before. This is as true in Manhattan as it is in Milan. We have witnessed the international rating agencies downgrading sovereign credit ratings in both the United States and Europe as we all struggle to generate strong foundations for growth and job creation.
Ambitious “austerity” plans to curb debt and gain the confidence of global markets are the order of the day. But tightening our belts is only one half of the winning equation. The countries of the developed world, including our two countries, need to find ways to grow our economies and improve the lives of our citizens. These new formulas must expand the economic pie in order to boost employment, raise household incomes, and increase revenues. Our political leaders are being asked to make difficult decisions to achieve the seemingly impossible: fix our economies by cutting spending while boosting worker productivity or finding new sources of revenues while cutting taxes. In the United States, President Obama believes the simple idea that we can live within our means while still making the investments we need to prosper. He is working with our Congress to create jobs and bring down our debt levels. In addition, America is trying to lay the foundation for long-term growth by investing in education, innovation and infrastructure. Here in Italy, the challenges are similar: social welfare reforms, tax changes, and market liberalization to propel economic growth and ensure that Italy remains a vibrant country. Italy also wrestles with restrictive rules and regulations that can inhibit investment, stifle job creation, discourage innovation. More flexible norms could encourage companies to boost investment, improve labor productivity, and hire more workers . It will not be easy in either country, but reform never is.
As our common history amply demonstrates, every serious challenge contains the seeds of opportunity. For the United States we have the chance to modernize our infrastructure, retrain our workforce, and make the reforms that will guarantee our economic future. Italy, too, can seize the moment to harness the genius of Italians for entrepreneurship and give new opportunities to young Italians. The United States cannot recover without healthy and vibrant Italian and European partners. I daresay the same is true for Italy. The opportunities for cooperation on trade, technological innovation, and governance of financial markets are boundless. The need for each of us to take serious steps to grow our economies is pressing. Italy, like the United States, cannot wait to take action. We must do so now.