Unemployment can't wait

This article was published in The Malta Independent on Sunday 29 12 2013:

In my library I have a particular section for biographies. I rarely read any fiction, Harry Potter excluded, but in-between reading technical books about finance, economics and geo-politics, I find a good biography instructive and relaxing.

Amongst other Christmas presents I received three biographies: Anton Buttigieg’s Mill-Album ta’ Hajti; Nelson Mandela’s Long Walk to Freedom and Javier Zanetti’s Giocare da Uomo.

Those who know me would testify that I am logical person through and through, except where football is involved where I am an irrational fan of Inter to my last bone and Javier Zanetti, Il Capitano, is my idol not just as a player but also as a person. The picture I took with him at his restaurant in Milan on 24 February 2010 after Inter had beaten Chelsea in a Champion’s League clash, serves as wallpaper on my laptop and PC and the same picture he autographed for me hangs in my private study.

Warmed up by last Sunday’s Derby win over Milan, and desiring to relax a bit from routine reading over these holidays, I temporarily put aside Joseph Stiglitz’s latest The Price of Inequality that I was reading and read through Zanetti’s autobiography as he related it to professional writer Gianni Riotta.

Whilst Italian is not a totally foreign language to me, I would much prefer to read an English version when there is one, but this book is still brand new in its original Italian version and I read it over a couple of days much more easily than another book in Italian I recently read: Lorenzo Bini Smaghi, ex member of the Executive Board of the European Central Bank (ECB) Morire d’Austerita. Bini Smaghi would have been Governor of Italy’s Central Bank, had he not been unlucky in having the nomination early under Berlusconi’s tenure as Prime Minister, when Mario Draghi was nominated President of the ECB and had to vacate his post as governor of Banca d’Italia.

Morire d’Austerita builds on economic concepts that the restructuring of EU countries in distress have to conduct to render their economy competitive again cannot be successfully executed in a context of austerity: austerity in the context of a recession becomes a poison pill that could kill the patient rather than cure him, hence Morire d’Austerity – Dying of Austerity.

Back to Zanetti, his book provided the detail in the general story that I already knew. How the young boy, passionate about football, was denied a place in the academy by the Argentine team Independiente as they considered him physically too weak for professional football, but how with determination the poor boy from a builder’s family made it to professional football after he had spent time helping his father on construction sites or distributing milk in the early morning hours before attending training when a football apprenticeship was finally given to him by a 2^nd division team.

Zanetti is respected by foes and friends alike. He is the gentleman of football and he plays the game because he likes it and is passionate about it. At the age of 40, when many other players who retire without serious injury would be in their fifth year of inactivity, Zanetti is still paying at his best and he defied the laws of nature in coming back swiftly from a serious injury in the Achilles tendon that would have ended the career of younger players who do not have the same level of unique dedication and self-sacrifice as Zanetti. What is so impressive about Zanetti is that he is a master of how to handle success. So many celebrities have been destroyed by their inability to cope with the success that their talent, once discovered, pours on them when they are unprepared to handle it.

Zanetti never forgot where he came from, never makes headlines for the wrong reasons and dedicates his life outside sport mostly to his personal foundation to fund charity work among the poor children of Argentina.
In his 20 years of professional football he has won every honour that club football can give, even though in truth the honours came rather late after he had spent the first 12 years of his career with little to show for it. But his determination and allegiance to his club’s colours (he refused a lucrative transfer to Real Madrid that any other player would have not thought twice about) finally paid off when, in 2010, he won all that was there to win in club football. Unfortunately, although he was captain of the Argentine national team and is still the most capped player, he never won any honour with Argentina whose last trophy goes back to 1993.
But it is typical of Zanetti’s dedication to his mission that, at age 40, and after he was mysteriously not selected for his national team in the last two world cups in 2006 and 2010 where Argentina fared very badly, he is still hoping that he can represent and captain his country in the coming Brazil world cup this summer. Truly Zanetti has learned how to wait and keep focussed on his objective until success finally crowns hard work.


What cannot wait is the critical unemployment situation amongst the youth in crisis euro countries. Can you imagine what sort of Christmas was had by the youth unemployed in Spain, Italy and Greece, where 50 per cent of them are without a job and, worse still, cannot see any reasonable prospect of getting one in 2014?

Unemployment, unlike Zanetti, cannot wait. The recession in Europe crisis countries is now entering its sixth consecutive year without an end in sight. A whole generation is being lost and as these young people will vote when elections come along, who can blame them if they lose faith in all traditional parties of the left or right and go to the populism of extreme parties that dangerously offer mirage solutions that will undermine democracy and social cohesion, in short will destroy the basic values for which Europe stands.

Germany is forgetting that a Versailles approach by the international community served on it after WWI led to the rise of extreme Nazism that led to the atrocities of WWII. It was the Marshall Plan after WWII that brought peace, stability and prosperity.

Forgetting what has worked and what has not worked is leading Germany to escape its solidarity obligations to help countries in distress not only to keep them in the euro but to restore them to health and to facilitate their restructuring programmes. Fifty per cent youth unemployment, and banks that cannot lend to the small industries that create jobs, cannot be a fair way of restructuring problem countries back to health.

The Banking Union cannot wait 10 years to build up the funds to render the safety of banks in peripheral countries unquestionable. These banks have to be recapitalised here and now with shock and awe recapitalisation, which could be funded through one shot monetisation by the ECB. If the rules do not permit this, let’s change them. Such monetisation can be reversed when these banks become commercially attractive again and the private sector becomes interested in buying back into their equity.

The problem is here and now. The solution to 50 per cent youth unemployment cannot wait 10 years purely to avoid exposing German taxpayers to any funding risk, forgetting how much they were helped when they needed it.