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Italian Universities and Research Institutes save Banks. Who will save italian research ? October 10, 2008

Posted by dorigo in humor, news, politics.
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(This post is partially flawed by a wrong interpretation of the faulty italian in the decree it mentions. I do not take it off since I still subscribe to most of what I wrote below. See note at bottom).

Italian credit institutes are not immune to the huge financial crisis we are witnessing throughout the world markets. The first ones are already yielding to the pressure (Unicredit for instance), and many will follow suit. Of course, the italian government must throw a life jacket to these benefactors. The problem, however, is that there is no money to spend in Italy’s budget. What is Berlusconi’s finance minister, Giulio Tremonti, going to do ? Will Giulio manage to save the sinking banks ?

Worry not. Banks will be saved. If that means burning a few billion euros and paralyzing a few Universities and research institutes, hitting their ordinary administration with unforeseen cuts that impinge on the flesh of their budget, the part which goes to pay salaries and bills, too bad. After the invention of the concept of “creative finance”, minister Tremonti will now appeal to the concept of “creative research”, whereby experiments will be built with scavenged scrap metal pieces and computing will be performed on private-owned cell phones. Did you know that the computing power of the hundred million cell phones owned by italian citizens would be enough to manage a medium-sized particle physics experiment ? Let’s release that potential!

Unfortunately, there is little to laugh about. It is all written down in a document issued yesterday, the Decreto Ministeriale number 155 titled “Misure urgenti per garantire la stabilita’ del sistema creditizio e la  continuita’ nell’erogazione del credito alle imprese e ai consumatori, nell’attuale situazione di crisi dei mercati finanziari internazionali” (urgent measures to guarantee the stability of the credit system and the continuity of supply of credit to businesses and consumers, in the present situation of crisis of international finance markets). Here are the salient parts:

Art. 1: 1.The minister of Economy and Finances is authorized, even in dispensation from accounting rules of the State, to subscribe or guarantee capital increases decided by italian banks which present a situation of patrimonial inadequacy certified by the Banca d’Italia. […] 7. With a decree by the President of the Council of Ministers […] the resources to fund the operations are identified […]: a linear reduction of financiary allotment […] of the ordinary fund to Universities; of resources allotted to research […].

At least, these cuts to Universities and research institutes are motivated by an international crisis. The 132,000 layoffs in the public school system, recently passed by another decree, are instead motivated just by the will of Berlusconi’s government to reduce taxes -particularly to those who suffer the most: those poor souls who, earning several hundred thousand euros a year, see their income heavily curtailed. Berlusconi is a real Robin Hood: an upside-down one. He now steals from Universities to fund banks: he’s just amazing. I wonder if his next move will be to close public hospitals to fund an increase of troops in Afghanistan – but I fear reality will continue to outdo fantasy.

UPDATE: Ok, this will remain as an example of how the current state of affairs in italian politics has made us all a bit paranoid. Indeed, after a commenter below pointed it out, I found out that the bureaucratical language of the decree leaves room to two opposite interpretations: the first is that the funds to University and research are excluded from the curtailing, the second, as I reported naively, is that they are part of the pool of funds which will be cut.

I now believe the “correct” reading is the one which excludes University and research funds, along with a list of others, from being reduced to increase bank capitals. A sigh of relief.

Comments

1. Mario - October 10, 2008

Hi Tommaso,

I’ve read the full decreet in Italian that you linked, and it seems to me that the (very involuted and bureaucratical) formulation says that the ordinary funds of the Universities and the resources allotted to research are among the expenses that cannot be reduced to save the banks. Indeed, if your interpretation were right, this could be instead the final blow to research in Italy…

Is there anyone else who speaks Italian that read the law and can shed some light on this?

2. dorigo - October 10, 2008

Hi Mario,

indeed, I re-read the decree, and the sentence is faulty. Probably what it means is that University and research are excluded from the cuts, contrarily to what I reported above.

I will now make an update to the post… Thanks for spotting it.

Cheers,
T.

3. Quasar9 - October 10, 2008

“Worry not. Banks will be saved. If that means burning a few billion euros and paralyzing a few Universities and research institutes, hitting their ordinary administration with unforeseen cuts that impinge on the flesh of their budget, the part which goes to pay salaries and bills, too bad. After the invention of the concept of “creative finance”, minister Tremonti will now appeal to the concept of “creative research”,

lol Dorigo,
I dunno about creative research
but it is clear there has been lots of ‘creative’ finance going on
you could say the banking world created it’s own blackhole
Fortubately it seems it is only an evaporating microstate ‘blackhole’ rather than a galactic blackhole
so though the financial meltdown may make much noise in the media: printed press and tv – it seems the world will not disappear down this blackhole, in fact it may not even register at the LHC.

4. chimpanzee - October 10, 2008

Famed Fossil Hunter Richard Leakey Warns Credit Crisis Will Be ‘Just as Devastating’ to Science

Scientist Warns Cash Woes ‘Devastating’ to Science

“Leakey, who once served on a government economic team in his native Kenya, said much of the support for science comes from wealthy philanthropists, foundations and companies. All those groups likely will be affected by lowered interest rates and the squeeze of credit not being available to fund their operations, he said.

“With the investment portfolios being hit as hard as they’ve been hit in the last few weeks, particularly the last few days, I would have thought there would be a very dramatic reduction in available funds for research in all sorts of countries,” Leakey told reporters Wednesday. “Unless they bring it under control, I think it’s going to spread. I think it’s extremely worrying for science.”

“This has spread right across the world and there’s quite a lot of science to be supported,” Leakey said. “I think it is just devastating.

“It’s more worryful for people who are losing their homes, it’s more worryful for people who are losing investments for their children’s futures, but we’re also very worried as scientists,” he said.”

There’s a saying in Auto Racing (very expensive activity, like Science):

“Follow the Money”
“It’s not the best driver who gets a ride [ driver for a team ], but which driver brings the most Sponsorship [ money $$ ]”

A former HS classmate told me that Stanford is more interested in how much $$ a research project brings to the University, than the quality of research itself. This is true of all universities (to varying degrees).

The ridiculous move by the Bush administration (Moon & manned Mars missions), resulted in cuts for Science abroad 3 odd yrs ago. I was told by a Caltech research group, “the low temperature group at JPL was disbanded, AND IT WILL NEVER COME BACK”. At the same time, JPL is hiring flunkies (one guy is a manager making > $100K, who doesn’t have a college degree, carries a gun, good friends with Charles Elachi/JPL Head, been in prison for a crime, got D’s & F’s in math in high-school, etc) & god knows what else. I spoke with a UIUC physicist, who was scrambling to get his (& colleagues) research program adjusted. He told me that “fundamental research in Science is being threatened for the next 10 yrs”.

My question is “What happened to Leadership?” All this HORSESH*T (risky loans that backfired, bringing down the credit system in USA..spreading world-wide), means that somebody wasn’t paying attention or they were getting kickbacks.

“You can’t fix STUPID [ leadership ]”

5. Guess Who - October 10, 2008

Kickbacks? Do I hear the word “kickbacks”?

http://www.opensecrets.org/news/2008/09/update-fannie-mae-and-freddie.html
😦

6. Lorenzo - October 18, 2008

Hello,
Italian Senate converted “Decreto Ministeriale” 157 in law 133.
Now the only way to edit that law is collect 500.000 signs to claim a referendum. Wednesday (October 22th) Italian Senate will convert “Decreto Ministeriale” 133 (the second part of Mr.Berlusconi government educational fund cut-down) in law. Students from all over Italy are protesting against educational funds cut-down, and against state universities privatization (process allowed by law 133).


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