In an exclusive interview for N1 television, foreign affairs editor Ivana Dragicevic talked with Italy's former Minister of Public Works and former Mayor of Venice, Paolo Costa, in an ongoing series of interviews titled "World in Times of Corona" which tries to provide some insight into what we are going through as a global community and where the pandemic crisis might lead us.

Italy is going through a national trauma. The coronavirus pandemic has shut down the country, struck at its economic heartland, and the tragedy evolving in front of our eyes will be something that will stay with generations of Italians long after the crisis passes. And while everyday Italy is fighting to keep its head above the water, many Italians locked down in their homes are trying to look ahead and see what the next day will bring, for both Italy and the entire world.

Paolo Costa held many important public offices in Italy. He was Minister of Public Works in the first government of Romano Prodi, Mayor of Venice, and an MEP. He’s a Knight of the Italian Republic. Today, Costa is a global expert on the issues of economic planning, regional economies, transport and tourism. We talked to Paolo Costa as he is – like all Italians – isolated at his home in Florence.

Mr Costa how are you personally going through this hard situation in Italy?

You can have years and years of experience in public life but at this moment we’re all on the same level, in the same situation. We have to listen to the professionals and hope that they understand what is going on. At the beginning, this was in China, we were saying they’re far away from us, and about their methods, these were military methods they were implementing over there, and we saw that in the context of their political system, as China is not democracy. But we see now that they were right.

We also had the South Korean approach which was much more technological because they’ve also had some experience in fighting SARS on a national level. As far as my country is concerned, we’ve learned from the method of trial and error. The government is trying to strike a balance in the trade-off between restricting our activities and protecting us from the disease, on a day-by-day basis.

You can say everything – that we were not ready, which is of course true, but you can also say that we try our best, which is also true. But I hope that in all of this we have produced some experience for other places where something like this might happen. Anyhow, if all these restrictions and social distancing measures seems like they are too much, don’t joke yourself. When they tell you stay at home, you have to stay at home, you can’t afford to be subtle now and rely on half-measures. The only thing that we can hope now is to lower the curve, and that the situation doesn’t escalate beyond our medical capacities.

Italy is a member of the EU, and also a member of the G7 and G20 groups. We are now seeing that each country is fighting the virus in their own way at the same time. Can Italy cope with this crisis all by itself?

We have to make a distinction between the emergency health situation and the social and economic emergency. Unfortunately it seems to me that in the EU everyone is going at it on their own, as the EU doesn’t have the competencies and cannot control medical activities which are predominantly in charge of national authorities.

Even when we talk about the numbers of cases and the statistics about coronavirus-related deaths for example, this varies from country to country. Now, we can only monitor the situation, and if we assume that the period of incubation is approximately two weeks, we know then that the result we see today is a consequence of measures that we have taken two weeks earlier. So we hope that we will soon see the results of the lockdown.

How is the nation dealing with the crisis mentally?

It’s clear that we try to imagine that this will not last forever, that it will end. We have made a lot of mistakes already, thinking that this will end fast, we spent time in discussions about keeping our way of life, so in the beginning we failed to implement rigorous measures. But now, everything is clear. We live in our homes, but even with staying inside we can be close with others. We are becoming a digital country which we weren’t before.

Friends of mine who had never touched a screen before are now becoming experts for online communication. This way, we are trying to maintain social links. People go out to their balconies, they sing. The other day, the Italian national anthem was broadcast simultaneously on all radio stations. That’s something. You must feel that you’re not alone. There are a lot of people who stay home by themselves, and that is very difficult, so it is very important to keep these human links.

We are all in a state of emergency at the moment, which makes us all focus on health and sweeping restrictions imposed. But everyone can already feel and understand the immense impact that this will have on our societies, and the dire consequences for our economies. In Italy, the economic engine of the country, its northern regions, have been hardest hit.

One question which we can ask ourselves is why were Milan, Lombardy, Veneto and Emilia-Romagna, hit first. In Spain it is Madrid, in the United States it’s New York. It looks like that in all geographic areas in which we have maximised human interaction, we have more problems.

So my notes for recovery from this start at two points. One is about what is at stake here. We have to reinvent globalisation. And the second one, we have to reinvent human interaction, mainly in urban areas. Of course, at the moment we are living under the water, and you can stay under the water for a while, but not for too long. If you stay too long, you either drown or adapt yourself to a new kind of life, and so there will certainly be consequences for our way of life.

What is strange, we’ve got the globalisation of the virus which demanded a global response, which was not there. At the same time, we have a disruption in the globalisation, in terms of the movement of people, which has disrupted travel and tourism, and which will need to be reconsidered in a totally new way, if people will move less and travel less in the future.

For the globalisation of goods, we have to think that it could become more complicated and costly to move them around the world. There will be reshoring of industries. Companies from Europe, who used China for manufacturing, can start thinking about maybe moving their strategically important lines of production back home. So we will probably have some kind of redistribution around the world.

I’m not saying that globalisation will die, because economy of scale is still there, but the trade-off between enlarging the market and controlling the market, even from the point of view of a possible emergency like this one, will eventually prevail and make us rediscover things.

Another important thing is interaction. As you know, more than 50 percent of world’s population live in urban areas, and projections show that this is going to increase to 70-80 percent within the next 20 years in Europe and in North America.

People need interaction, and it will still be there, but maybe we will move things as much as possible into the digital world, and the balance between face-to-face and digital interaction will probably look very different. In terms of the future of our spending, this crisis will make us change our habits. We are already moving from one type of goods to another, on account of us changing our consumer habits. If you work from home, if you buy from home, if you go to school at home, you will change the stuff that you buy. Therefore production will also change totally. We may well be facing a revolutionary change that will be more profound if this emergency situation lasts for a longer period of time.

At the moment, countries are each handling this emergency by themselves. Italy has always been perceived as a country that has probably changed its government more frequently than any other in modern European history, and it is marked by this political volatility. Italy had problems in coordinating local, regional, and national authorities during this crisis. Could this epidemic result in some consequences for the way Italian institutions of government are set up?

We have to make a distinction between problems that we have had between local, regional, and national institutions in a sense that we have created a complicated system with the goal for it to be closer to citizens. Which in this crisis showed that there are problems with coordination.

Our second big problem is that our institutions, our system, does not allow the government to plan anything in the long run. There is no institution that would help design some avenue for the country for a longer period ahead, which is now becoming increasingly essential. You cannot live in such a way, deciding what do to day-by-day. If we do plan something long term, it often changes the very next day by the new government which came to power.

That’s the core institutional problem of our country. Maybe terrible things like epidemics can be an push for changing the situation for the better. I don’t know if this is going to happen, but it is becoming increasingly clear that we need an institutional change. But for that you need leaders who are able to understand this and actually lead their followers, instead of following them.

Can we think of scenarios which would make leaders and countries learn to get up on their feet after a crisis like this?

First we have to survive the crisis. We need to give ‘helicopter money’ to families, loans to businesses, and that will help sustain local and global demand, otherwise we might witness the collapse of the GDP. People will not be able to spend, and it will be hard to do exports. The only solution are public investments, and helping companies so that they can invest themselves. With that, we will subsidise the economy and also help it modernise at the same time.

Organising these kind of policies has to be done now, and has to be implemented as soon as possible. It will happen all over Europe. If you want, you can change this overnight. But the problem is the willingness to do that. Something important happened, when the EU said that we no longer need to comply with EU’s deficit rules. That was an overnight decision. So, we can modifiy everything now.

I hope that people sitting at that table are able to go about this in the right way. Now is the time to see if there is a willingness in Europe to take rational long term decisions, and look ways for us to work together, rather than selfishly against one another – because if we do things that way we will fail. That is, of course, always an alternative that we have in front of us. We have various instruments at our disposal, from eurobonds to strategic funds. This is mainly the issue of intelligence and the willingness of our leadership, so that is now in the hands of the people governing our countries.

You have mentioned the issue of leadership as the key issue at the moment. In the best case scenario, can we expect to see a change in how the local, regional, national, and global leaderships behave in the future?

The key question are the institutions, meaning what will be our collective ability to assess what had happened and prepare an answer to that. Of course, in terms of threats like pandemics, we will need to have something on the global level that we don’t currently have, because the virus is global. The World Health Organization merely gives recommendations, and on the EU level we don’t have any coordination for this kind of common policy. So we will first have to change national policies, because that is the level at which we can imagine how to change and organise things.

That doesn’t mean that it will be the most effective route, but we need to deal with this. Take our country for example, which worked on devolution for almost 40 years, and now we have a coordination problem between national and regional governments, which is crazy.

Another huge issue for Italy is that our productivity has been falling over the last 20-25 years, which means that we have increased our public debt every year, which means the next generation will have to pay for it. You can do this for some time, but not all the time. As far as the EU is concerned,now is the time when the EU will either become a real union, or collapse. It seems that European institutions are at stake here.

But I’m an optimist. The only times when European institutions made a difference were crisis situations, and the EU itself was created after the biggest crisis on the continent, World War II. If this pandemic is not stopped quickly, we will have a deep and profound recession all across Europe, not only in Italy, Spain, France, but also in other countries whose economies are supposedly on the safe path. Clearly, it will be in common interest to put together new tools to take steps toward building more strict relationships at the European level. It is a necessity, in my opinion, because if we look at decades to come, they will be characterised by the fight for supremacy between the two largest economies, the United States and China. Europe will have to grow stronger to resist this, otherwise it will end up as a loser.

During this emergency time, we see a lot of reports on how the climate seems to be recovering and lower pollution levels, can this situation boost the understanding and importance of environmental and climate policies that EU had already identified as its strategic priorities?

The current effect of the coronavirus pandemic is that it changed people’s spending habits, and when the demand changes so does the supply. We have to modify our way of life. The European Green Deal was a good idea, and it still is a good idea, but for that we also have to modify our way of life and make changes in lot of sectors.

For example, we may be on the right path to get rid of fossil fuels, but there is still a lot of areas in which we have yet to make progress to modify them in terms of protecting the environment. Transport, as one of the key economic areas, will be important. It seems to me that what the current emergency situation is telling us is ‘Beware, there are no free rides, and there’s no free lunch for anyone.’ We need to re-think everything.

For Italy and for Europe, a huge issue before the coronavirus pandemic was migration. How do you see the effect of this crisis on migration?

I have heard reports that southern Italy has a problem now, because migrant workers who used to pick tomatoes or fruits have left Italy, and now in some areas local agriculture which relied heavily on migrant workers is suffering. In some areas you just cannot find people who will do these jobs. On the other hand, you have the humanitarian crisis which is still going on. So in the future, this issue will remain, on how to provide a safe haven to people who are arriving to Italy, and to create a new, more intelligent, migrant policy. There are two sides to that coin. This issue is also related to demographics, because we have very low birth rates, both in Italy and in Europe.

Because of the demographics and the issues of care policies in Europe, there was a lot of talk about the ‘silver economy’ and the ‘silver generation.’ Now we hear that older people may be the most vulnerable to this virus.

Our ‘silver generation’ cannot and must not be seen as a problem and a burden. If it is seen like that, then there is something wrong. They are the depository of experience, a generation that always looked ahead. It is normal for sons to want to kill their fathers, figuratively speaking, but the younger generations are not able to deal with this by themselves. As societies, over the last 20 years people have become focused on keeping thins running well rather than thinking about how they could get better.

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