Italy competition, the unknown

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In Italy, it seems that competitors are protected more than competition. Since 2009, it would be mandatory to adopt an annual Competition Act. “It would be” because – in fact – it was issued only once in 2017.

Until President Draghi has indicated it among the Government's priorities because strongly requested by the EU to be able to free the funds of Recovery Plan: it was therefore included in the Pnrr and, finally, in November 2021 a Draft of the law "Competition" was launched by the Council of Ministers: last May 30 the Senate hall gave the green light to the measure that is so in order to face the examination at second reading in the Chamber. The DDL will then return to the Senate in third reading: the final green light is expected between mid-July and early August.

This is the state of the art: if a law designed to be annual becomes, in fact, over-seven years, it cannot achieve any of the intended purposes.

“The main function of Italian municipalities”, the candidates call for the administrative elections of +Europe that are taking place these days, “is to provide services to citizens, entrusting them with management through tender or directly to subsidiaries. 93% of the services today active have been entrusted without tender. The lack of competitive procedures negatively affects the quality and cost of services, and therefore public expenditure, productivity and growth of the country”.

The Court of Auditors describes, in fact, for years, a picture of inefficiencies, waste, economic losses, insufficient transparency of management, income of position, non-compliance with the regulations, beyond the laudable exceptions.

ticino river italy

Ticino river dam

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“The lack of competitive procedures in the choice of manager affects the quality offered to citizens and the cost of services,” continues the appeal of the liberal party founded by Emma Bonino and Benedetto Della Vedova: “More competition in the market and for the market. We hope you will not miss the opportunity to put a key sector of the Italian economy.”

Indeed, in Italy, in key sectors, gigantic bags of lack of competition remain, which is not discussed at all. For space reasons I report only some indicated by the National Antitrust and partly resumed in the Pnrr: the generation of hydroelectric power, the network and liberalization of the sale of energy, the distribution of natural gas, the reduction of administrative burdens and the development of ultra-broadband demand in telecommunications, the in-house reliance of local public services such as transport, waste management, the accreditation system of private facilities in health, the abuse of digital platforms and bathing concessions.

And in the Italian press, it was a great deal - thanks to the looming summer season - precisely the (lacked) liberalization of the Italian beaches. As we know, the Bolkestein Directive of 2006 imposed on European countries the liberalisation and the launch of concessions relating to bathing establishments: here the situation in Italy is paradoxical if tourism is thought to weigh about 6% of the total Italian GDP, reaching up to 13% if the induced one is considered. A higher percentage of the European average, which sees the tourism sector accounts for 3.9% of the EU economy.

Carlo Calenda, Secretary of Action, already in 2020 denounced that Italy cashed, every year, from the bathing concessions “100 million euros”, a figure too low, considering the earnings of the sector. A plant in Capalbio, Tuscany, to give an example, pays a fee corresponding to more or less the cost of a single umbrella throughout the summer season (55 euros per day approximately).



Napoli coast

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Yet in 2020, the bathing concessions were renewed automatically until 2033, despite the rejections of the Court of Justice, a new infringement procedure of the European Commission, judgments of the Tar and the Constitutional Court, measures of the Antitrust Authority. The DDL Competition, now, establishes that from January 1, 2024 must be awarded according to the tenders and the definition of compensations to be recognized to the outgoing dealer, placed at the expense of the succeeding dealer (with the possibility to obtain technical derogations of one year, until the end of 2024). Therefore, in order to liberalize the sector, it will be necessary to wait another two years before marking a turning point in a story that for years penalizes the entire Italian tourist sector.

Alberto Mingardi of the Bruno Leoni Institute - the Italian think thank that promotes ideas for the free market, writes in Corriere della Sera: “A more competitive and open market implies a life with less certainty than that guaranteed by the distribution of favors and income by the political decision-maker. Individuals can accept a little more uncertainty if, on the one hand, they understand that it is accompanied by a greater possibility of exercising a certain sovereignty over their own lives: to be masters of their own destiny. On the other hand, they must also think that this destiny is also to a certain extent determined by their efforts and determination. To the extent that the idea that the race is made up and that ultimately only contains the starting positions or, worse, the interlocking of friendships and attendations, citizens will gladly embrace economic inefficiency, but that if not otherwise dispenses certainties”.