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Why is Football making Huge Money?

Sisir Devkota

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Last year, European clubs amassed more than 9 bn euros from television rights, ticket sales and commercial businesses. FC Barcelona earned the highest share amidst fierce competition from another Spanish club, Real Madrid, which clinched the second spot. 2019 saw an annual revenue increase of more than 10% from the previous years; strangely, while major economies are slowing down at historical rates, football is casually; soaring higher. For almost two decades now, the business of football is minting money. However, football is no longer the arguably most popular sport on planet; technology and the custom of applying science behind physical and strategic performance has diffused interests across multiple sports. Still, it remains profitable, and so does the examination of why prove consequential for the future of financial surplus.

Ticket sales are straightforward. Add superstars with bigger stadiums and a season houseful is guaranteed. Everton FC are mid-table achievers in the English league and yet recent reports suggest how they have been successful in swaying away new set of fans, from different parts of the world. In its own acceptance, the club tries to sell the attitude that young fans look forward to being associated with. Recently, supporters had premium access to discuss on how the new stadium could be designed. Already, Everton fans are having a say in the club’s third and fourth kits. During season breaks, teams, travel across continents to train under the eyes of global audiences, while leaving the impression of how truly inclusive they have become. Yet, European leagues make the most out of it and their players are more sellable. If it was not, North Korea would sustain in the argument; the largest football stadium lies in Pyongyang with a capacity of 110,000.

Revenues from commercial sponsorships is the tricky surprise. Clubs depend on the status of their players for a good deal, yet, clash of rights across leagues and players with multiple patronage levels the field. Managers face the same problems; while job sacking has become a norm, stakeholders cling to secure deals over a longer period. If only the commercial business was straightforward, football would have swallowed even more cash. Sponsors sleep with the harsh reality of sudden transfers and unexpected changes in the psychology of players and their interaction with a host of distractions, including climate and language. On the flipside, it is not easy for superstars, living life within the terms of legal agreements and casting faces for advertisements in different platforms. For clubs, it is only a small share in the huge cake. In the form of extras.

Broadcasting revenue from television is the elephant of the jungle. A quick evaluation of why it might have been, determines how important fans are. Fans who live faraway from European stadiums; having access to satellite service actuates economies of scale. The commercial pawns have a foothold as well, a global platform for promotion, across nationalities and cultures. Broadcasting revenue across all leagues, contributes more than 40% of the club’s total wealth. But what is the catch?

A simile to Coke, global consumption of a brand that determines intellectual opinions across borders in social media is the new spectacle. Fans rage over a player’s absence in match line-ups, managerial decisions are scrutinized and the video angles of scoring a goal is embraced beautifully, more so, scientifically. Here’s the catch. Clubs are spending more time analyzing the sociology of fan engagement. For theirs, it is the biggest asset. Currently, global merchandise is limited to clothing and accessories, but there is greater chance of deeper penetration into the lives of normal people. For once, Liverpool coffee and United Milk might finally blend harmoniously. Football might be a way of life. The figures do not lie. The figures are dangerous. Financially, the world is bleeding and yet football is managing to tilt the weight on its side. The idea of a football religion is not inexcusable anymore.

Global Affairs Analyst based in Kathmandu, Nepal. Founder, Trainer & Researcher at "The Protocol" which facilitates analytical research on current affairs and workshops on Diplomacy and Leadership. Masters of Social Science in Democracy & Global Transformations from the University of Helsinki, Finland. Author for a book chapter titled as "Armed Conflicts in South Asia 2013".

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Economy

How Coronavirus Affected the supply chain Networks/ Businesses

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The public health Emergency as novel  COVID-19 has  caused the product flow to be changed around the global and it caused the disruption of the supply chain network to a great extent .As world is the global village and interconnected with one another for different  purposes . The most important manifestation of globalization is the Economic integration. The Corona virus outbreak caused the disruptions to every aspect of life but considerably to the Economy of every country and the global supply chains. The economy wheel is the fluctuation of the economy between periods of expansion (growth) and contraction (recession). When we think about the disruption or disturbance of the supply chain network by COVID-19 , It will be impacted in the four ways  first of all ”  problem in  Production of new products ” e.g.  Demand for sanitizers and toilet papers have tremendously risen these days but racks are empty in the stores due to the production constraints. due to this epidemic the whole supply chain network disturbs because there is limited production in the organizations due to many reasons  the foremost is the limited access to  workforce  or the employees due to quarantines as the  virus is continuous to spread  around the world so government advised to stay at home so it reduces the overall normal productions of the factories and the leaders also need to think about how they can protect the health of their employees and also help their workers who are ill . 

Due to the pandemic most of the companies have started work from home but it is not that effective. there are different drawbacks related to that too . second one is the” cost of the products” due to this pandemic  organizations have to bear the additional costs of shipping for the products to stay in the market as complete lockdown for the businesses is not easy and it will ultimately  be horrifying for the economy as well .Third is the ” products that have already being manufactured and present in the market and in these days people are stocking down (the essential items) but there is the limited supply at the backend due to factory lockdowns and this could lead to the loss of market shares for different companies as the customers are looking for the substitutes as well, due to the shortage of products in the market due to this pandemic outbreak.

Fourth is the ” customer satisfaction’’ in this period of higher uncertainty people are looking in order to fulfill their needs they are not considering their wants their first priority for this they are looking for the substitutes of the products no matter if they have a brand loyalty for certain brand or products. All this has changed due to the shortage of the products and rising uncertainty in the market. The spreads of COVID-19 has pushed the pause button on the world’s economy let’s talk about the world’s power Economic houses. China has the world’s largest economy behind US one of the main reason of its rising economy is the massive  network of different factories in china includes from T shirts to mobile phones to all consumer goods for the consumers all over the World .Today china  makes up of 1/3 of world manufacturing and is the world’s largest exporter . As world is the global village and supply chain is interconnected so deeply across the world. So if the issues appear in the china’s economy it can felt across the world. As the COVID-19 pandemic outbreak was first identified in Wuhan china in December 2019, As of 28 March 2020 more than 650,000 cases of COVID-19 have been reported in over 190 countries resulting in approximately 30200 deaths. And due to the vigorous spread of virus globally it has impacted every country directly or indirectly. In an effort to stop the spread of the virus the Wuhan China epicenter of the virus was completely sealed off and in China mandatory factories shutdown in most of its provinces in order to halt the spread of corona virus.

All the Businesses across the globe are badly affected by the COVID-19 outbreak e.g. The Hyundai Motors in South Korea had stopped their production in early February due to not getting its parts that they usually import from China. Chinese Car sales dropped drastically by 86% in last month and other companies like Tesla and Geely are start selling cars online as consumers stay away from showrooms. On the other hand most of the components of iPhone are manufactured in china so it relies heavily on China for its production. China suggest Apple’s corona virus problem may be worsen in future. As there is the steep decline in the iphone sales in February that is 61% and according to analyst it will be worse in future. As the corona virus impacted every business so the Investors in US stock market suffers their worse week in February after the Global finance crises since 2008. Investors fear the spread of the virus will destroy the economic growth of countries. . Central Banks in many countries including the United Kingdome has slashed down the Interest rates. Due to the corona virus outbreak European automotive crises deepens, as plants have been closed temporary and demand likely to fall up to 20% this year.

Travel Industry has been badly impacted by the outbreak of corona virus .In order to halt the further spread of this virus as Airlines cutting down their flights and tourists cancelling business trips and holidays and the Government around the world have imposed the travel restrictions in order to stop the spread of virus as a controlling measure. In order to slow down  the spread of virus as it is affecting the globe drastically Government of almost every country has  close down the restaurants , bars ,  and social places  closure of the Restaurants cause the Knock -on  effect on the related industries  such as food production , dairy products , fish farming  food and beverages , wine and beer production  the issues were especially troublesome in industrialized where enormous extents of whole categories of food  are normally imported typically by  just-in-time logistics. In addition to all this as the virus has spread globally the oil market is continue to suffer losses but the uncertainty is still there to answer the questions, how deep? and how long? Corona-virus impacts the oil market  because of  the Travel restrictions imposed by the Government which limits the use of  jet  fuel and  due to the slowdown of supply chain network   , lockdowns, less mobility , shutting down of factories this has the very direct affect on the oil consumption. and In late January projections the oil consumption would decline by approximately by 600 __800,000 barrels per day (bpd) over Quarter 1 and by 200,000 (bpd) over the entire year eclipsed by  International energy Agency’s (IEA). Gold is traditionally considered as the safe haven for the investors throughout the world.

When crises hits, Investors often choose less risky Investments, but even the price of Gold tumble -down briefly In March as investors were fearful about global recession. These are some high profile cases. Now, there are certain suggestions for the businesses in order to cope with the prevailing uncertainty. There are certain lessons that the companies can learn from the current situation. There have to be some mitigation strategies as well. Companies can work more proactively and agile by good planning. They can overcome the risk by making improvements in the recognition of risk profiles .By implementing the risk management strategies and many more. After the Covid-19 global emergency, we will see organizations can be categorized as one of two classifications. There will be those that don’t do anything, trusting such a disturbance won’t ever happen again. These organizations will be facing exceptionally hazardous challenges in future. Furthermore, there will be firms that notice the exercises of this emergency and make interests in mapping their supply chain Network. The businesses organize themselves so they don’t need to operate blind when the following emergency strikes again in future and they would be capable enough to rapidly make sense of arrangements .These organizations will be the victors in the long run.

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COVID-19 has exposed the fragility of our economies

Guy Ryder

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The human dimensions of the COVID-19 pandemic  reach far beyond the critical health response. All aspects of our future will be affected – economic, social and developmental. Our response must be urgent, coordinated and on a global scale, and should immediately deliver help to those most in need.

From workplaces, to enterprises, to national and global economies, getting this right is predicated on social dialogue between governments and those on the front line – the employers and workers. So that the 2020s don’t become a re-run of the 1930s.

ILO estimates are that as many as 25 million people could become unemployed, with a loss of workers’ income of as much as USD 3.4 trillion. However, it is already becoming clear that these numbers may underestimate the magnitude of the impact.

This pandemic has mercilessly exposed the deep faultlines in our labour markets. Enterprises of all sizes have already stopped operations, cut working hours and laid off staff. Many are teetering on the brink of collapse as shops and restaurants close, flights and hotel bookings are cancelled, and businesses shift to remote working. Often the first to lose their jobs are those whose employment was already precarious – sales clerks, waiters, kitchen staff, baggage handlers and cleaners.

In a world where only one in five people are eligible for unemployment benefits, layoffs spell catastrophe for millions of families. Because paid sick leave is not available to many carers and delivery workers – those we all now rely on – they are often under pressure to continue working even if they are ill. In the developing world, piece-rate workers, day labourers and informal traders may be similarly pressured by the need to put food on the table. We will all suffer because of this. It will not only increase the spread of the virus but in the longer-term dramatically amplify cycles of poverty and inequality.

We have a chance to save millions of jobs and enterprises, if governments act decisively to ensure business continuity, prevent layoffs and protect vulnerable workers. We should have no doubt that the decisions they take today will determine the health of our societies and economies for years to come.

Unprecedented, expansionary fiscal and monetary policies are essential to prevent the current headlong downturn from becoming a prolonged recession. We must make sure that people have enough money in their pockets to make it to the end of the week – and the next. This means ensuring that enterprises – the source of income for millions of workers – can remain afloat during the sharp downturn and so are positioned to restart as soon as conditions allow. In particular, tailored measures will be needed for the most vulnerable workers, including the self-employed, part-time workers and those in temporary employment, who may not qualify for unemployment or health insurance and who are harder to reach.

As governments try to flatten the upward curve of infection, we need special measures to protect the millions of health and care workers (most of them women) who risk their own health for us every day. Truckers and seafarers, who deliver medical equipment and other essentials, must be adequately protected. Teleworking offers new opportunities for workers to keep working, and employers to continue their businesses through the crisis. However, workers must be able to negotiate these arrangements so that they retain balance with other responsibilities, such as caring for children, the sick or the elderly, and of course themselves.

Many countries have already introduced unprecedented stimulus packages to protect their societies and economies and keep cash flowing to workers and businesses. To maximize the effectiveness of those measures it is essential for governments to work with employers’ organizations and trade unions to come up with practical solutions, which keep people safe and to protect jobs.

These measures include income support, wage subsidies and temporary layoff grants for those in more formal jobs, tax credits for the self-employed, and financial support for businesses.

But as well as strong domestic measures, decisive multilateral action must be a key stone of a global response to a global enemy. The G20’s virtual Extraordinary Summit on the COVID-19 response  on 26 March was a welcome first step to get this coordinated response going.

In these most difficult of times, I recall a principle set out in the ILO’s Constitution: Poverty anywhere remains a threat to prosperity everywhere. It reminds us that, in years to come, the effectiveness of our response to this existential threat may be judged not just by the scale and speed of the cash injections, or whether the recovery curve is flat or steep, but by what we did for the most vulnerable among us. ILO

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Economy

The reforms and the current situation of the State budget and accounts

Giancarlo Elia Valori

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As we have all realized, since the COVID-19 epidemics broke out the number of regulations enacted – especially by the Italian Presidency of the Council of Ministers – has literally sky-rocketed.

 The starting date of the sequence of regulations is certain. It is, in fact, January 31, 2020 with the declaration of the state of emergency connected to the onset of diseases resulting from transmissible viral agents, pursuant to Article 7, paragraph 1, sub-paragraph c) of Legislative Decree No. 1 of 2018 (Civil Protection Code).

 The Prime Minister’s Decrees, the many Guidelines, Directives and Ministerial Orders, as well as the many Orders of the Head of the Civil Protection Department and, finally, the many Regional and even Municipal Orders have added to the Emergency Ordinances and the many – probably too many – decree-laws to be quickly converted into laws after the Parliament’s vote, pursuant to the Constitution.

 There has never been an exception to the eternal rule – mathematical, at first, and then legal – according to which the greater the number and complexity of rules, the greater the indecision and misunderstanding inherent in their implementation.

 Even in such a severe and complex situation, the messy regulatory system created with the Emergency Ordinances and Decrees for the COVID-19 infection is, therefore, a source of ambiguity, indecisiveness and potential conflict between State apparata and Local Administrations.

 This is the reason why, even in the State administration, the old maxim of medieval logic, simplex sigillum veri, should apply.

 Hence which is the final criterion for solving the inevitable regulatory ambiguity? The criterion is Politics, seen as Alexander’s Sword cutting the Gordian Knot immediately.

  This is, in fact, the real function of democratic representation, in a highly-regulated context, as is the case in every modern Western country.

 Parliament is always the decision-maker, together with the Government and the Presidency of the Republic, responsible for both budget items and the hierarchy of rules, which should be as simple as possible, as already taught us by Beccaria.

 Reverting – after this example – to the issue of Italy’s current Budget Law, what is it, in fact?

 As is well-known, the Budget Law is the legislative instrument, provided for by Article 81 of the Constitution, which lays down how the Government – with a preliminary accounting document – communicates to Parliament the public expenditure and revenue forecast for the following year, pursuant to the laws in force.

 At first, it should be noted that much of the expenditure is bound to be fully hypothetical – as happens also in private budgets – and cannot be completely organized by means of a single old or new rule. Finally, some budget items depend on cash flows and expenses which can never be fully predictable in the budget.

 Again pursuant to Article 81 of the Constitution, unlike what currently happens for the Stability Law, the law for adopting the State Budget cannot introduce new taxes and new expenses.

 The structure of the State Budget, namely the network of fixed items, must be only that one.

 The reason is obvious but, given this asymmetry, it is difficult to put together the Budget Law and the Stability Law in a reasonable way.

 It should be recalled that the Stability Law, also known as Finance Act or Budget Package, is the ordinary law proposed by the Government, which regulates the economic policy of the State (and also of civil society) for three years.

 Well, but in three years, as they say in French, chosir son temps, c’est l’épargner.

 In three years everything is done and everything can be destroyed or change, especially with the kind of international economy we are dealing with now.

 The Stability Law has been so called, almost officially, since 2009 mainly as a result of the introduction of “fiscal federalism”, implemented with the constitutional reform of 2001, which requires that the activity of the “central” State is coordinated with the local one, which has autonomous and different assets – albeit not always – from the “central” State finance.

 I believe that the famous “federalism” has been a long-standing illusion from which the sooner we wake up the better.

 The distribution of revenue among the Regions – increasingly eager for money, especially after the reckless “Reform of Title V” of the Constitution, invented by the leftist governments in the belief they could take votes away from the Northern League Party – has been detrimental. It has made the Local Authorities increasingly powerful, and therefore large and very expensive, with an efficiency that, except for the Northern regions, which would have been efficient anyway, has plummeted throughout the rest of Italy.

Again as a result of the Treaty of Maastricht – a city previously unknown except for the French siege of 1673, in which D’Artagnan stood out – the Stability Law must comply with the requirements of economic and financial convergence between the EU countries, but also with the criteria regarding the rules of coordination between the local, regional and State levels of public finance of the various EU-27 Member States. Sicily will coordinate with the economy of Finland, all based on cellulose and mobile phones, while Piedmont, with its precious white truffles, will coordinate with the Tayloristic and low-cost factories of the Czech Republic.

 Beyond a certain level, the economies are incomparable with one another and there is no single currency that can put them in communication.

 If anything, we would need public accounting like the one that is implemented – even at European level – with the Power Purchasing Parity criteria.

 For the first time, in the 2009 Stability Law, an additional instrument was added on welfare – which currently, in the European bureaucratic jargon, also means “Health” – in which there are regularly also rules on labour, social security and competitiveness, which have little to do with Welfare and is drafted according to a deadline of missions, multi-year programs and functions, which is very hard, if not impossible, to monetize.

Furthermore, pursuant to Law No. 234/2012, the Stability Law has also provided that, as from 2016, the Stability Law shall be a Consolidated Act together with the Budget Law.

 This is anomalous, considering that the latter can regulate and create new taxes and duties, while the former cannot.

 However, the Reform of the State Budget, implemented with Law No. 163/2016 adopted on July 28, 2016, was definitively approved with over 80% of votes in Parliament.

 The Stability/Budget Law must be submitted by the Government to Parliament every year by October 15 and Parliament must adopt or amend it otherwise by December 31 of the same year. It is too short a lapse of time. Beyond the initial deadline, Article 81, paragraph 2, of the Constitution provides for the subsequent deadline of April 30 – a term which, however, shall be authorized by law.

 The Stability Law shall mandatorily include: a) the net balance to be financed; b) the balance of the recourse to market instruments, i.e. the final amount of money in the annual or three-year cycle for which to resort to loans (and this is certainly a vulnus, because the speculative markets know in advance the amount that can be financed); c) the amount of the special budget funds – and this is another vulnus, since all the other countries know how much the Services, the Special Operations, the Off The Record actions, etc. will cost; d) the maximum amount for renewing the public employment contracts – another vulnus, because this allows to calculate the industrial policy and, therefore, the possible effects of the labour cost on public and private markets, with obvious advantages for the E.U. competitors; e) the appropriations for refinancing the capital expenditure already provided for by the laws in force, and hence also the three-year stop of subsequent capital expenditure; f) the long-term expenditure forecasts.

 This is another vulnus since this allows to infer the sum available to a State for any E.U. military or foreign policy program, or for any other strategically important program.

 Not to mention the reserves for mergers and acquisitions of strategically important companies within the European Union, or even outside it, but permitted by the other European partners.

 A “mutualization” of the public budget which creates many dangers, but corresponds to the mental level of many E.U. accountants.

 This structure of the Stability Law leads to a situation in which only two choices are possible. Either the so-called austerity policy, when it comes to restoring possible balance to public funds (but this is always decided by others). We may think that a cyclical austerity policy must also be able to spend more on certain budget items, but much less on the others, while here the amount that counts is only the final one, which automatically determines the market behaviour. The only thing that markets have in mind, like conscripts, is the purchase of our public debt instruments at the best price and with the best interest rate, often carrying out trading operations, as also happens to certain States that profit from the difference – often completely rhetorical – between their debt instruments and ours.

 Or there is also the possibility of expansionary spending, which resorts always and only to deficit public spending – i.e. by issuing more public debt instruments – which can be “Keynesian” if it regards investment, but simply expansionary if rents, annuities and current expenses are privileged, in addition to investment.

 Sometimes even this may be necessary.

 The British economist, however, maintained that public spending applies above all to new investment, while for the “old markets” – as he called them – the self-equilibrium of private enterprises is also good.

 The childish idea underlying this conceptual duality is that you can be either “big spenders” (especially if “you come from the South”) or “strict” (especially if you are self-controlled and you come from the North), but this is just a vaudeville skit, not a serious economic policy idea.

 Thinking – as many people within the EU institutions believe – that “family” rigour has an impact on the State budget is a “paralogism” – just to use an ancient philosophy concept.

The equivalence between households and States – a concept often reiterated by unexperienced economists – would be fine only if households could issue face value money, which could be spent immediately according to their needs. These needs, however, would be linked to the credibility of their private “money”.

 People believe in these fairy tales, especially within the European Commission.

 However, the European constraints of any Stability Law are the following: 1) a 3% ratio between the actual and the forecast public deficit and the national GDP – a fully specious and abstruse ratio, even in a phase of restrictive policies; 2) 60% of the ratio between public debt and GDP, another bizarre figure, which may also regard non-Keynesian policies when – for example – a “mature” sector has to be restructured or investment must be made in new and promising areas; 3) the average inflation rate, which cannot exceed by over 1.5 percentage points the one of the three best performing Member States in the sector during the previous three years. Are EU experts aware that there is also ‘imported inflation’?

 This happens when the prices of goods and services purchased abroad rise – although this formula is already quite wrong.

 Inflation is imported when the costs of imported products increase and obviously countries like Italy, which are processing economies, are also great importers. God knows – in these economic phases – how import-related inflation (just think of oil products) is important for the European economies.

 Furthermore, the EU has no strategic, military, geoeconomic and financial ability to change the oil and gas producers’ treatment towards it. The same holds true for the other particularly important raw materials.

 Let us now focus on constraint 4): compliance with the long-term Nominal Interest Rate, which must not exceed by over 2 percentage points the one of the best performing Member States in terms of price stability.

 This is the Taylor Rule. As the U.S. Treasury Secretary Taylor said in 1993, it is an equation in which the interest rate is a dependent variable, while inflation and national income are regressors.

The rule is the following:  ii = i*+α(πi- π*) +βγ+εi

The long-term inflationary target is π. It is the inflation rate that will prevail in the long term. Taylor here assumed that the long-term inflation rate should be 2%, as often happens in the United States, but the current interest rate is π that, only for the USA is a GDP deflator. If we were all just stockbrokers, it might also be true.

 But there are costs that are included in the GDP and are neither predictable nor changeable from outside.

 The actual nominal interest rate in the equation is γ. The rest is easily calculable.

 Hence what does the Taylor Rule mean? When inflation starts reawakening the rates are expected to rise.

 This is not at all implicit in the Maastricht rules, which also stem from these formulas.

 As the Taylor Rule also shows, the increase in interest rates reflects a decrease in the supply of real monetary rates.

  Not necessarily so because there may be many balances available, but with a less “attractive” monetary composition.

Again according to Taylor, investment is inversely correlated with interest rates, but this holds true for the economies that live on loans, not for many of our entrepreneurs who use – almost exclusively – “own resources” or bank loans to secure own resources.

 Because of this pseudo-mathematical sequence of events, if investment decreases, the national income and also unemployment increase – which is here the only cure for inflation. But where did these guys study?

 Another theory resulting from the Taylor Rule is that when the economic activity slows down, the medium-term interest rate must fall.

 This has never happened, not even in the recent U.S. history. Just think of the 2006-2008 crisis.

 It is also strange – and I say so from a purely analytical viewpoint – that the purpose of economic theory is only to reduce inflation, considering that – as already pointed out above – it does not depend solely on the excess of public spending, of the availability of low-cost capital (which, instead, is considered in the Taylor Rule) and the use of “moderate” budgets, according to the theories of the ignorant economists à la page.

 Let us revert, however, to the procedure of the Italian Stability Law.

 According to the procedure known as European Semester, the EU Member States must submit their budgets to the European Commission and the European Council by the end of April, which ipso facto limits our legislation, which also provides for a budgetary role until December 31 of the same current year.

 For the time being, the penalties envisaged for some delays can be reduced, at most, to the single penalty equal to 0.2% of GDP for the year under consideration.

 The principles of the State budget and the related Stability Law are again the traditional ones established by Law 468/1978, including specification, whereby all budget items must be defined analytically so as to avoid ambiguities in their intended use; truthfulness, whereby no revenue overestimations or expenditure underestimations are allowed and, finally, publicity, whereby the budget must be made known with the most suitable means.

 There is also the issue arising from the adoption of Law No. 1/2012, which amended Article 81 of the Constitution, thus enshrining the principle of “balanced budget” in the Constitution.

 It is a laughing matter: since the invention of the double-entry accounting by Frà Luca Pacioli – Leonardo da Vinci’s friend and sometimes drinking companion – all budgets “break even” by definition.

 Otherwise they are not budgets.

 In fact, the term “break even” is never used in the rule. The more cryptic term “balanced budget” is used. We all know that, in physics, the balance can also be unstable.

 As already noted above, it is an unintended funny rule.

 What could we do if the Vesuvius erupted – an event which may be sure in the future, but unpredictable? Would we issue debt instruments, but for ten years at least, so as not to disturb or offend the E.U. accountants and their search for a liquid monetary base for an improbable and incorrectly calculated immediate fiscal liquidity to support debt instruments?

Hence are millions of homeless people to be left in the city of Naples, possibly in the Vomero and Pietanella neighbourhoods, or in the Sanseverino Chapel, waiting for these accountants to decide to study economics and political economy on the right handbooks?

 This is a rule that should not only be deleted, but should also be mocked by some famous comedian, better if with some knowledge of political economy.

 In addition to the “balanced budget” requirement, as from January 1, 2014, Law 243/2012 provided for the establishment of the “Parliamentary Budget Office”, with the task of carrying out “analyses, verifications, checks and evaluations” – thus replacing the role of politicians who should be the sole ones responsible for distributing the resources available and the forecast ones among the most suitable budget items.

 Moreover, in the summer of 2016, Legislative Decrees No. 90 and 93, as well as Law 164, were enacted, which amended Law 243 in relation to the Local Authorities’ balanced budgets.

 Another mistake, albeit a partial one: Local Authorities live on a complex mechanism – on which we need not to elaborate here – of remittances and transfers from the Central State and of sums partially withheld by these Authorities, which are then recalculated by the Central State, again in a too complex way that need not be explained here in great detail.

 In this case, how can we repay the local administrations’ colossal debt? Just think that the European Court has already condemned us for these matters. If the current legislation remains in force, there is no way out.

 In short, the “European cure” on the State Budget has worsened its ambiguities. It has depoliticized the selection of budget items, thus often moving it away from voters’ and citizens’ real needs. It has not allowed a modern solution to the Local Authorities’ financial crisis. It has also devised the funny mechanism of the “balanced budget”, which literally means that there is no longer a provisional budget (hence how can the real items be calculated?). Finally, it forces us into a debt cycle that is both excessive and, at times, burdensome, but always uncontrollable.

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