Europa, crescita e sostenibilità: "e pluribus unum?"

The aim of this paper is to argue that peace among the European countries represents the fundamental common good promoted by economic integration, for which solidarity and willingness to pay are required; however, there are structural problems able to slow the process of European integration. The central problem is an uneasy coexistence of the very different demographic structures of the populations and businesses across European countries; the answer to this imbalance has been a policy of wage flexibility, with a deflationary impact, instead of a European fiscal policy. The mobility of workers with non-European nationality has been much greater than that of European citizens, which is an obstacle to the sustainability of the convergence process. The economic consequences of immigration from outside Europe are positive for economic growth if the labor demand regards higher levels of education and qualification, and are negative if the labor demand is for low levels of education and qualification, with wages lower than average. Italy and Spain fall into this second category: in Italy labor productivity is decreasing per hour worked and relative to years of education, as is the relationship between production and capital stock. We demonstrate the existence of a structural inflationary gap between all the euro area countries and Germany, the country with the lowest inflation rate; this imbalance is not sustainable in the medium term. It reflects an imbalance in business demographics, particularly in countries where employment is higher in micro-enterprises, and Italy is the country with the highest proportion of firms in "class zero". Economic growth in the euro area and Europe depends on the development of medium-sized enterprises, as well as the consolidation of large firms. Per capita GDP is positively influenced by the share of exported goods incorporating high technology and value added, and increased investment by firms in Italy and abroad can increase competitiveness and employment. We show however that the stock of inward Foreign Direct Investments tend to be related with those outward, for most advanced countries.