COVID19. Recovery Fund: a good deal, now Italy must roll up its sleeves to make it historic
Italy has got a good deal, explains Carlo Altomonte, professor of European economic policy at Bocconi University: "Meanwhile, the overall structure of the Recovery Fund has never been questioned", explains the professor. "Today we can make debt to areas of the Union that are in difficulty and it is a revolution". In addition, this "finally common, finally European" fiscal policy is flanked by monetary policy to support the economic cycle. "And the markets are rightly celebrating", Altomonte comments. In terms of the political cost of the negotiations, "transfers to the states are maintained, but spending on European public goods is reduced. So, less money for investments, for research, for the energy transition". For this reason, "it is necessary that national recovery plans recoup at least partially this part of expenditure on green and digital", continues Altomonte. However, they must also speed up the timing of disbursements ("By the end of the year we can already have a green light, if we do everything right"), there will be an advance of 10% from January 2021 of the funds disbursed "and the possibility to include also the expenses already made in 2020. Finally, to those who point out that all the money that countries like Italy will receive will have to be repaid anyway, Carlo Altomonte replies that "in reality, this is not the case. The countries are giving a guarantee to the EU budget to pay it back from 2028, but new European revenues are also being activated in the agreement". For Italy, the agreement on the Recovery Fund is, in short, "an even better agreement than expected, but it must be very clear that the operational capacity to carry out projects and reforms on schedule, which is our historic weakness, will become central to ensuring the effectiveness of these funds," concludes Altomonte.
The post Covid startup ecosystem
In this live chat by B4i, Markus Venzin, Dean for innovation, and Nico Valenti Gatto, managing director of Bocconi for innovation, discussed the pre acceleration and acceleration opportunities for young, innovative companies with two representatives of such firms: Nadia Neytcheva of Doctors in Italy and Lorenzo Piovani of Wapi
Executive chat live
Bocconi University's Rector Gianmario Verona meets Francesco Giavazzi (Vice President, IAC Bocconi) and Laurence Boone (chief economist, OECD) to discuss about “Economic policies and economic outlook in times of Covid-19”.
Doing business (and innovation) in times of Covid19
Gianmario Verona, Rector of Bocconi, discusses the issue with Diego Piacentini, senior advisor of KKR, and Saeed Amidi, CEO of Plug and Play, in the fourth episode of Executive Chat live
CORONAVIRUS/ The Recovery Fund is a historic initiative
The Recovery Fund is a historic initiative, explains Carlo Altomonte, professor of European economic policy. "For the first time, in fact, the European budget is being used in a countercyclical way, i.e. with a procedure that creates European public demand at federal level for an immediate contingency and not for structural expenditure". The key point of what for Altomonte "is truly a real Eurobond, is that it is a mutualised instrument, i.e. not everyone will be rewarded for what they put on the plate". There will be countries, "like Italy and Spain", that will receive more, others, "like Germany", that will receive less.
Information in times of Covid19
Gerard Baker (Wsj) and Maurizio Molinari (La Repubblica) are the guests of Gianmario Verona, rector of Bocconi, for The la testa Executive chat live
Executive chat live
Basic and applied research in times of Covid-19 is the topic of the secound round of the Executive chat live series. Gianmario Verona, rector of Bocconi, talks with Alberto Mantovani (Humanitas Research Hospital) and Carlo Rosa (Diasorin)
#BocconiCorrespondents from London, Pier Vittorio Mannucci
“Like many universities around the world, we were faster in understanding the risks of the pandemic and closed before the UK actually went into official lockdown,” Pier Vittorio Mannucci, Bocconi alumnus and professor of Organizational Behaviour at London Business School, tells us in this video from London. “And when lockdown started we witnessed similar scenes to Italy, such as stockpiling. Lockdown here has been a bit lighter - controls are less strict, there is no self-certification and we are not totally confined at home.”
Executive Chat Live
Bocconi University's Rector Gianmario Verona meets Francesca Cornelli (Dean, Kellogg School of Management) and Giovanna Iannantuoni (Rector, Università Bicocca) to discuss about Universities and the social sciences in times of Covid-19.
#BocconiCorrespondents from Moscow, Roberto De Meo
Roberto De Meo, chapter leader of Moscow’s Bocconi Alumni Community and head of CEMEA Region at Visa Consulting & Analytics, is six weeks into lockdown at home. “Covering over 80 countries in my role I am quite used to working remotely, but I do miss traveling and interacting with people face to face.”
#BocconiCorrespondents from Miami, Emanuele Francia
At the end of January, Emanuele Francia, Bocconi alumnus 2002 and SDA Bocconi MBA 2007, left a Beijing still enjoying fairly normal daily life to reach Miami where he was planning to stay for some business. Since then the Business and legal consultant at Allpku and professor at China Agricultural University has witnessed the growing escalation of the Coronavirus emergency in the US. “We are not experiencing a total lockdown here in Miami - the main rule here is to wear a mask in public places and to respect social distancing.” Emanuele is keeping busy meanwhile with online business meetings and with his academic research.
#BocconiCorrespondents from Los Angeles, Leonardo Gerotto
Freedoms and restrictions - Leonardo Gerotto, Bocconi alumnus and global marketing manager (Hot Wheels) at Mattel, tells us in this video all about lockdown in LA
#BocconiCorrespondents from Amsterdam, Pilar Pedrinelli
Over 40 days into self-isolation, Pilar Pedrinelli, Bocconi alumna and Global Engagement Manager at the Rainforest Alliance, the international NGO, reports on what she is observing around her regards the more lenient lockdown being observed in Amsterdam. With regards to her work, “this crisis is hitting very hard the communities we work with that are losing their income“ she observes. “And yes, some say this emergency in the short-term has been better for climate change but looking at the future, with a reprieve of economic activity, we have to hope sustainability is kept in mind and that nations learn their lessons.”
Covid19 / Human Rights in Times of Pandemic
In the last months many of our human rights (the right to not be detained, the right to family life, to freedom of religion, etc) have been curtailed to help stop the spread of Covid-19. “International human rights law permits such limitations for legitimate reasons, such as the protection of lives of others,” explains in this video Roger O’Keefe, professor of International Law at Bocconi. “And where governments have acted in good faith to stop the spread of Covid-19, the measures taken can be justified as such. One state that will however have difficulties is Hungary, which has clearly abused the use of decrees to overturn some rights that cannot be related to the Coronavirus emergency.”
#BocconiCorrespondents from Toronto, Ruben Gaetani
“The city is in lockdown,” tells us Bocconi alumnus and strategic management professor at Toronto University, with the landmark CN Tower in the background
Covid19 / When and how will the air transport sector take off again?
The international air transport sector, a symbol in itself of the freedom of movement, is facing a deep recession, explains in this video Oliviero Baccelli, professor of transport economics & policy at Bocconi, with 55% of revenues disappearing by year end - and European airlines set to be hit even harder. “Recovery will be hard due to lack of business caused by the economic crisis and the need to rebuild trust in flying,” says Baccelli. “There will also be the need to invest in restructuring safety aspects in airports and on board. And the low-cost model will suffer most as it is traditionally based on quick turnarounds in airports and high load factors.” Some good news, concludes Baccelli, can be found in the low price of oil which could compensate the growth in other costs.
#BocconiCorrespondents from London, Virginia Stagni
Personally over 50 days into self isolation, Bocconi alumna is in lockdown in London. Business Development Manager at the Financial Times, Virginia is now busy rethinking projects planned for the near future. And she stays optimistic, “after every crisis comes an opportunity to be grasped.”
#BocconiCorrespondents From New York, Alberto Bisin
“The situation here in New York is serious, with hospitals overwhelmed, but hopefully we have reached the peak,” Bocconi alumnus and professor of economics at NYU. “Personally, I am continuing with my research work here from home, with a particular interest, like all economists at the moment, for epidemiological models.”
Covid19 / A proposal for a return to work, starting with those aged 20/49
It's important to think already about what will come after the quarantine. Massimo Anelli, professor of Economics at the Department of Social and Political Sciences at Bocconi, together with colleagues from Italian and international universities, has elaborated a proposal for the transition phase to be implemented after the pandemic peak. "The economic system could start again from people in the 20-49 age group, which has a coronavirus mortality rate close to zero, allowing them to return to work on a voluntary basis and with a return that will take place in stages to avoid saturating hospitals again". Those who agree to return to work would be monitored by an app and tested frequently "and would be transferred to hotels that are not currently used to avoid contagion with the most at risk groups. For the discomfort and risks involved, participants would be incentivated with an automatic profit-sharing system or a tax benefit that clearly increases net wages," continues Anelli. With regard to schools, the professor explains that in the first phase "they would have to remain closed, while in a second phase it would be possible to reopen elementary and middle schools, but only with teachers under 49 years old". Returning to companies, and in particular regards which should open first, the proposal states that "we should start with the companies that are at the heart of the production chain, to avoid shortages in the supply of intermediate and final products. However, there should be a tax mechanism for distributing the profits of businesses that can reopen to businesses that remain closed".
Covid19 / The UK still benefits from EU aid
Although Brexit became a reality on January 31, from a legal point of view we are still in a transitional phase, explains Justin Frosini, professor of comparative public law at Bocconi, in this video: "Legally, the United Kingdom is still a full member of the Union and the full body of EU law still applies", explains Frosini. "In fact, the Commission has approved a 57 billion euro umbrella UK state aid scheme for companies consisting of direct grants, state guarantees on loans, tax advantages and safeguards for banks. So wether Brexiters like it or not,” concludes Frosini, "fortunately the UK can still benefit from EU aid to combat this terrible pandemic.”
We were feeling a little homesick yesterday, so in our Instagra, Stories we asked what you missed most about Bocconi: and we got so many sweet responses! The campus, the faculty, classes, studying in the Library until the wee hours, chatting with friends, grabbing breakfast before class, all the events and guest speakers, life in the dorms, the artwork all over campus, the pizza del giorno 🙂 ! And many of you mentioned the people. And that’s so true, what makes Bocconi special is its people. So we’re sending warm wishes to all of them
Covid19 / Financial markets must be used to support relaunch of firms
How to raise substantial financial resources and use them in the right way so that the economy kick starts again immediately. This is the challenge being played out in these weeks regardless of the timing with which our communities will slowly reopen, depending on the evolution of the epidemic, explains Stefano Caselli, professor of finance at Bocconi. And this is the reason why the discussion on coronabonds and the strong responses that need to be given has begun. The Italian government has launched a far-reaching plan to guarantee the financing given by banks to companies so that liquidity is not lacking. However, for the restart, it is necessary to look at the capital available in the financial system, without burdening the system again with public debt. The launch of impact bonds to offer capital to companies is a path that must be pursued with determination.
Covid19 / USA and China, protection wins against protectionism
The scarcity of certain products these days, such as personal protective equipment, has been accentuated by the lack of cooperation between countries and protectionism, explains Gianmarco Ottaviano, Fondazione Achille e Giulia Boroli Chair in European studies. "A notable exception has been China, whose export has decreased, but less than that of other products. This is good news because in 2018 the US and the EU received half of foreign supplies of these devices from China". However, the decrease in Chinese exports of masks and other devices decreased more to the US than to the EU. Is this a consequence of Trump's policy? "Yes and no. No, because there is no evidence of voluntary restrictions from China; yes, because they ended up in the cauldron of Chinese goods on which Trump imposed duties. Having noticed this, in the last few days he has removed them, realizing that what people need now is protection and not protectionism.
Covid19 / Is pandemic same as war? In economics, yes, but....
The link between war and pandemic, so frequently evoked these days, allows us to reflect on the role of the State in the management of emergencies, explains Andrea Colli, professor of economic history at Bocconi, in this video: "During the First World War and in the following years the link between emergency and public intervention was very close," explains Colli, "as the State's control over companies progressively increased. Even in the current situation, public intervention is particularly invasive, not only in Italy but also I n many other advanced democracies. We will have to see how this situation evolves in the future".
Covid19 / helicopter money yes, but watch out for risk of inflation
With the prospect of an economic crisis, there is a return of talk about helicopter money - that is, the request to central banks to make available, as if distributing from above, large amounts of money, explains in this video Luca Fantacci, professor of economic history at Bocconi. "This term was coined for the first time in 1969 by Milton Friedman but the first to use it was the governor of the Fed, Ben Bernanke, during the financial crisis of 2008," explains Fantacci. "The difference, however, is that in the current situation the money will be given not to banks but to governments, which will then distribute it to businesses and families in difficulty. This is good, but watch out for the risk of inflation".
Covid19 / Communication at the time of Coronavirus
The situation in which we find ourselves leads us to rethink the ways in which we relate and work with others, explains Massimo Magni, professor of Business Organization at Bocconi, in this video: "A first problem, working at a distance, concerns the difficulty in coordinating, because there is a lack of spontaneity regards face-to-face communication", explains Magni, "so it is necessary to give oneself some rules. A second aspect is the difficulty in interpreting messages, which are generally too short and concise. The third aspect is isolation, which leads to forgetting one-on-one relationships".
Covid19 / Eurobonds and debt mutualisation: what the Treaties provide for
With its latest decisions, "the ECB has bought us some time," explains Carlo Altomonte, professor of European economic policy at Bocconi University. The European Central Bank will put a thousand billion euros of purchases of financial assets on the market "and this money will probably be enough to face the crisis that Italy will have to face in terms of new public debt". However, warns the professor, "In the medium term there will be a problem: the public debt of all member states will increase from 20 to 30 percentage points and when the ECB stops buying it, in December 2020, the market will test the willingness of the Central Bank to support it in the long term". This will lead to stress on the Eurozone and, continues the professor, "to avoid future problems we need to intervene today with a fiscal instrument". With a clarification: "Coronabonds, Eurobonds and any form of debt mutualisation are not provided for today in the existing legislative framework, so the Treaties and probably the German constitution would need to be changed". Consequently, concludes Altomonte, "we must invent debt instruments that are common and accessible to all member states. Without prejudice, let's see whether we can activate these instruments between the lines of the European Stability Mechanism and/or the European Investment Bank".
Covid19/ The energy crisis, a test for governments
The coronavirus crisis also impacts the energy sector, with strong reductions in the consumption of oil, electricity and gas, explains in this video Matteo Di Castelnuovo, SDA associate professor of practice and expert in energy economics. "Regards the future, the worry of analysts is that the collapse in the price of hydrocarbons will push companies to slow down investments in clean energy," says Di Castelnuovo , "which are already destined to decrease due to problems in the supply chain, especially in China. But even in the long term the risk is that these investments, which reached a peak in 2017 and have not grown further, will suffer strong contractions. This is why", continues the professor, "the role of governments becomes important, called upon to a real test, who could launch sustainable stimulus packages".
Covid19 / Why the EU has chosen to close borders
The European Union has asked member states to close their borders. Why? "For two reasons," explains Eleanor Spaventa, professor of European Union Law at Bocconi. "The first is that the EU and the Commission have realized that citizens need to feel the closeness of Europe’s institutions, after, for example, Christine Lagarde's gaffe. A concrete gesture was therefore needed". Secondly, "the Commission is concerned that many member states have already chosen to close their borders, which is why, in its communication, it asked the member states to nonetheless create privileged corridors for goods".