Bagnai at the Competition Authority: a headache for the regulator, a sop for the north

The appointment of Alberto Bagnai as a member of the Italian Competition and Market Authority (AGCM) will have consequences for both the Competition Authority and the Lega. The appointment of AGCM members is the responsibility of the Speakers of the Chambers. After ‘promoting’ Saverio Valentino – who was already a member – to the post of president, Ignazio La Russa and Lorenzo Fontana took everyone somewhat by surprise by putting forward Bagnai’s name to complete the board. The founding legislation requires individuals of ‘notorious independence’ and ‘endowed with high and recognised professionalism’. The author of "Il tramonto dell'euro", some have said, lacks the necessary expertise, as he is a macroeconomist who has never dealt with industrial economics. Others have pointed out that his political background – he is a Member of Parliament, chair of the Pension Funds Oversight Committee and deputy leader of the Lega group, a party for which he is also the economic spokesperson – would contradict the principle of independence. These are not unfounded observations, but they are one-sided. People far less qualified than Bagnai have been appointed to the boards of these authorities; and, incidentally, academic credentials have not always been a guarantee. Technical expertise, if lacking, can be acquired, either through study or by hiring high-calibre staff (as a Commissioner, Bagnai will be entitled to a staff of five people). As for political experience, if the objection applies to Bagnai, then it should also apply to all other members of the various authorities, both current and past, who find themselves in the same position.

Bagnai’s exceptional nature stems not from formal aspects, but from substantive ones. It is not necessary for a commissioner to be a specialist in industrial organisation. However, the Competition Authority is not a neutral body with regard to the aims it pursues: it is an institution built around the idea that competition is a fundamental tool for growth and innovation. It is precisely this link between competition and economic development that tends to disappear in Bagnai’s macroeconomic analysis, because growth is explained primarily through the monetary regime and aggregate demand. In his view, Italy’s stagnation depends mainly on the architecture of the euro and the constraints it imposes on macroeconomic adjustments, whilst shortcomings in competition and productivity are secondary effects or, at any rate, of secondary importance. In fact, Bagnai has dealt with this issue only briefly and mainly from a critical perspective. In 2011, for example, he advised the then minister Corrado Passera to ‘cherish’ the ‘resistance to liberalisation’, because in doing so he could ‘avoid making a budget that is already recessionary even more so’. In 2017, referring to Pier Luigi Bersani’s ‘blanket regulations’, he spoke of the ‘devaluation of the role’ of professionals and, consequently, the ‘impoverishment of a wealth of knowledge’. For the rest, amongst the 2,849 posts published on his blog Goofynomics since 2011, the space devoted to competition is truly minimal.

There is an even more sensitive issue: competition law plays a prominent role in the EU Treaties because it is instrumental to the economic integration of Member States. According to Bagnai, in a fixed-exchange-rate environment, the mutual opening up of markets leads to an amplification of existing structural divergences. Therefore, not only are liberalisation measures not a priority, but they are actually counterproductive. Reducing labour costs is, in fact, the only lever through which firms can defend themselves against foreign competition: for this reason, pro-market reforms contribute to wage deflation. How will Bagnai be able to set aside his most deeply held convictions when assessing mergers or potential abuses? Or when drafting the periodic recommendations for the annual competition law? Such an unorthodox position might perhaps have been tempered within a five-member board, where the relative influence of individual commissioners was less and there was greater scope for debate. But the reduction to three members ultimately forces them into a division of labour at the expense of internal discussion. Obviously, this does not necessarily mean that Bagnai will turn the AGCM into a mouthpiece for the anti-euro camp, but, as his colleague Claudio Borghi remarked, ‘politics is not practised solely in Parliament’.

The paradox is that, for Matteo Salvini, Bagnai’s transfer to the Competition Authority could be seen as a concession to the northern faction, which has never come to terms with the anti-EU shift. Nor could the Transport Minister afford a move that would have had a much greater impact than that of Antonio Maria Rinaldi (himself an anti-euro figure who had hoped for a post at Consob). In a social media discussion with Borghi, Matteo Campomenosi – a former anti-EU MEP, albeit with a background in the party’s northern wing – admitted as much: “Without him, it will be really tough to keep up with certain issues. There’s no point pretending otherwise.”

The risk is that, in an attempt to restore balance within the League, the credibility of the institution responsible for overseeing one of the pillars of the European economic system may be undermined