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Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the

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Speaker 1: global economy to you. And what you heard there was

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Speaker 1: the sound of Trevinano, tiny quiet village in the hills

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Speaker 1: of central Italy. It's been getting smaller and smaller, just

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Speaker 1: a hundred and forty two residents at last count. But

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Speaker 1: now it also has a grant of twenty two million

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Speaker 1: dollars to play with, courtesy of the European Union's Recovery Fund,

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Speaker 1: so it's poised for a dramatic comeback. Well that's the

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Speaker 1: hope anyway, and there's more than the life of once

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Speaker 1: more village at stake, because supporters of the fund desperately

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Speaker 1: need to prove to the many doubters that investing public

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Speaker 1: money in the poorer regions of the Eurozone isn't sending

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Speaker 1: money down the drain. Our Italy economy reporter Alessandra and

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Speaker 1: Miliaccio has that story in a few minutes. I'm also

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Speaker 1: going to talk to our chief you as economist Anna Wong,

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Speaker 1: about the US Central banks big inflation mistake and whether

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Speaker 1: China's continued to struggle with COVID nineteen will make things

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Speaker 1: easier for the FED or even worse. First, surprisingly. Perhaps

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Speaker 1: we're going to the Philippines to talk about the extraordinary

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Speaker 1: outcome of the elections there. First because what happened really

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Speaker 1: was extraordinary, but also because it perhaps sheds a different

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Speaker 1: kind of light on the fractures opening up in the

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Speaker 1: global economy and where things go from here. Bloomberg Opinion

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Speaker 1: columnist Dan Moss is usually based in Singapore, but he's

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Speaker 1: just back from Manila. Dan, thanks for doing this. I

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Speaker 1: know you're exhausted from your time in the Philippines. I

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Speaker 1: guess for those who haven't been paying attention to tell

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Speaker 1: us what happened. Ferdinand Marcos Jr. Known as Bong Bong,

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Speaker 1: secured a landslide win to become the next president of

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Speaker 1: the Philippines. Now, if you think you've heard that name before,

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Speaker 1: it's because you have his father, Ferdinand Marcross Sor ruled

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Speaker 1: the Philippines for two decades. The bulk of that as

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Speaker 1: an autocrat. Martial law was declared in nineteen seventy two,

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Speaker 1: and democracy, which was suspended, never got to look in

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Speaker 1: until the end, and that was his undoing. So you

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Speaker 1: have another Marcros headed to the White House with Sarah

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Speaker 1: de Tote, the daughter of the incumbent president as his

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Speaker 1: running mate and Stephanie. That result was not a particular surprise.

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Speaker 1: What was a surprise was the way he just swept

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Speaker 1: the board. I mean, this was not just a win,

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Speaker 1: this was a blowout. This was Lyndon Johnson sixty four

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Speaker 1: stuff um. And just to remember his father, there were

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Speaker 1: millions of people in the streets when he left, thousands

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Speaker 1: that died under his rule. They'd sort of robbed the economy,

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Speaker 1: but robbed the country blind. We had all his wife's

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Speaker 1: shoe collection. I mean, it did not end well with

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Speaker 1: his father. No, And some of the shoes are on display,

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Speaker 1: you can go see them. But here this is the

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Speaker 1: interesting thing. Via social media and a extremely disciplined campaign,

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Speaker 1: Bong Bong Bakos was able to, if not erase, then

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Speaker 1: dilute the memory of his father's period for a huge

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Speaker 1: chunk of voters. There's a huge segment of the voting

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Speaker 1: population that either was not alive when Marcos Senior fled

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Speaker 1: into exile in Hawaii or they were small now. But

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Speaker 1: the really fascinating thing is when you talk to people

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Speaker 1: who said they were going to vote for Marcos, I say, oh, look,

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Speaker 1: you know his father was a great man. This was

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Speaker 1: a great period for the Philippines. We had stability, we

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Speaker 1: had strong leadership. And I'm like, okay, what about people

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Speaker 1: who were detained without trial? What about the looting of

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Speaker 1: the treasury, what about the spiral of debt? What about

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Speaker 1: martial law? Oh look, you know, I'm too young to

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Speaker 1: remember that. But yet you're you're not too young to

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Speaker 1: have this view of it as an imagined great period.

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Speaker 1: So you know, there's an inherent contradiction there. And we

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Speaker 1: should say that this is not in reaction to terrible

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Speaker 1: economic situation in the Philippines, because it's actually doing much

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Speaker 1: better than other countries in the region. It's doing excellently

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Speaker 1: relative to other countries in the region. Uh, you know,

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Speaker 1: according to the I m F, it's going to blow

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Speaker 1: any of every other place in Southeast Asia away, with

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Speaker 1: the exception of Vietnam. Um for most of the term

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Speaker 1: De Torto's term, prior to the pandemic, I realized that's

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Speaker 1: a huge asterisk. But it was growing north of six

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Speaker 1: The government, the outgoing government has predicted, the Finance Ministry

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Speaker 1: is predicted it could even grow nine percent this year.

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Speaker 1: The way iron is going, Steph, that's about three times

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Speaker 1: China's rate of growth when the Philippines was called the

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Speaker 1: sick man of Asia. So Dan obviously, and you've just

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Speaker 1: got back, And there's a lot of elements of this

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Speaker 1: which are specific to the situation of the Philippines. But naturally,

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Speaker 1: when we're looking at it from outside, we're also tending

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Speaker 1: to try and put it into our global narratives and

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Speaker 1: the debates that we're having about the direction of the

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Speaker 1: world's going in. So I guess in one of those

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Speaker 1: debates is about populists and that kind of style of

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Speaker 1: leadership um doing better relative to the sort of classic liberal,

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Speaker 1: pro market Western governments. I mean, his bong bongs win

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Speaker 1: win is a is a win for the populist right.

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Speaker 1: It's certainly a win for populist packaging. Look, somebody said

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Speaker 1: to me over dinner on Friday night, if this were

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Speaker 1: an election for the Metro Manila area rather than the country,

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Speaker 1: it would beat Lenny rob Rito in a walk. She

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Speaker 1: had the urban professional class, she had civil society folks,

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Speaker 1: she had students. Now, if you travel outside Metro Manila,

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Speaker 1: get past the excerbs, you see fewer and fewer Lenny

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Speaker 1: Robrito signs and more and more Bongbong Marcos signs. I

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Speaker 1: drove through on Sunday some pretty impoverished communities in Tarlac Province,

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Speaker 1: ironically the home province of the Akino family. But anyway,

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Speaker 1: these folks were living in pretty tough conditions, yet the

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Speaker 1: Bong Bong Marcos campaign signs were plastered everywhere. I find

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Speaker 1: it hard to believe he's going to do much for

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Speaker 1: those folks. But if the objective is to tap resentment

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Speaker 1: against urban professionals and the quote unquote Manila elite goal

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Speaker 1: mission accomplished. And the other big debate we're having is

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Speaker 1: about this sort of division in the global economy between

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Speaker 1: China and the US, and China extending its influence relative

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Speaker 1: to the US. I mean, there's there's a big dimension

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Speaker 1: of that here as well. Yeah, China has extended its

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Speaker 1: influence in the Philippines, There's no question about it. And

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Speaker 1: that is stark because you know, as you said, the

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Speaker 1: Philippines as a former colony of the United States, and

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Speaker 1: Marcos Senior had backing from the US during the Cold

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Speaker 1: War with the Soviet Union for many many years when

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Speaker 1: Marcos Senior was in office, particularly when he imposed martial

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Speaker 1: law of seventy two, China's economy was a nothing burger.

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Speaker 1: Now it's a very substantial something burger, but one that

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Speaker 1: is plagued by some cyclical difficulties right now, So what

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Speaker 1: has China done for the Philippines in the past six years.

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Speaker 1: It's done infrastructure, It's done tourism, it's done real estate investment.

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Speaker 1: So Rodrigo went to Beijing in came back with dozens

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Speaker 1: of infrastructure projects to announce, many of which would receive

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Speaker 1: backing under China's Belton Road a sid Now some of

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Speaker 1: those pre dated to today's time, but details right, who cares?

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Speaker 1: But many of them have been played staff by constant delays,

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Speaker 1: only about twelve or any sort of advanced state of construction.

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Speaker 1: I visited a bridge on Thursday in Central Manila that

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Speaker 1: was opened in April. There's nothing subtle about this. Two

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Speaker 1: giant flags are emblazoned on the base of the bridge.

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Speaker 1: One is the Chinese flag, one is the Philippines flag.

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Speaker 1: There's a banner fluttering on the on ramp that says

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Speaker 1: to the effect Philippine China Prosperity Association. But no one's

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Speaker 1: traveling on this bridge, you know. And in fact, there

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Speaker 1: was so little track. We can even we could even

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Speaker 1: stop our van on the on ramp and and take

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Speaker 1: some photos. And you know, workman was still sort of

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Speaker 1: tinkering away, you know, with widgets and bolts, you know,

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Speaker 1: while this thing was nominally open, and I came away

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Speaker 1: thinking would this be a white elephant. Tourism from China

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Speaker 1: has grown dramatically over the course of Rodrigo to today's term.

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Speaker 1: Obviously hasn't been much in the past two years and

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Speaker 1: been much of anything. Uh, and investment, you know, particularly

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Speaker 1: in real estate, and China was also a huge presence

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Speaker 1: in offshore gambling. Now you know, these things are very

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Speaker 1: much in retreat right now because it's hard to get

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Speaker 1: out of China. That's hard to move from one part

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Speaker 1: of Shanghai to the other. I'll get on a plane

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Speaker 1: and go to Philippines. Well, I was going to ask you,

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Speaker 1: so that you now have China going into this and

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Speaker 1: yet another slow down linked to yet more lockdowns and

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Speaker 1: the COVID zero strategy not going anywhere. Um, not just

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Speaker 1: for the Philippines but for for the region. This could

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Speaker 1: potentially be challenging, hugely challenged. If you made a bet

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Speaker 1: as to tourte appeared to do early in his term

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Speaker 1: that the US, you know, is a sunset operation and

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Speaker 1: China is the way to go. Then, um, you know,

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Speaker 1: you're in a bit of a pickle now, I mean

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Speaker 1: what to do? You know? Do you ask yourself? Look?

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Speaker 1: You know, is China past its peak? And when and

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Speaker 1: if China recovers from its current moment, will it go

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Speaker 1: back to being the way it was? You know, did

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Speaker 1: the Philippines only cottoned on to the China era? You know,

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Speaker 1: when it was like on its way to being over.

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Speaker 1: Dan Moss has been fascinating, Thank you very much. Thanks

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Speaker 1: a lot, Steph. Good to see it. Now. All of

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Speaker 1: that has given me a good excuse to catch up

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Speaker 1: with our chief US economist, Anna Wong, because, as it happens,

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Speaker 1: she's just been looking at how the slowdown in China

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Speaker 1: could affect global growth and even potentially change the course

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Speaker 1: of the US Central Bank. Now it's embarked on quite

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Speaker 1: rapid interest rate increases to finally bring down inflation. So Anna,

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Speaker 1: let's just remember briefly quite how sharp that slowdown in

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Speaker 1: China is now expected to be. Yeah, so our our

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Speaker 1: Asia team expects that your growth in China will be

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Speaker 1: moving towards to around two. And that was compared to

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Speaker 1: earlier this year when they were expecting growth to be

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Speaker 1: around closer to five. That's a massive that's a massive decline. Now,

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Speaker 1: I know that one of one of your key jobs

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Speaker 1: when you were at the Federal Reserve was you were

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Speaker 1: there to just you were looking at how events in China,

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Speaker 1: the Chinese economy could affect the US and potentially Federal

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Speaker 1: Reserve policies. Maybe you should just buy sort of talk

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Speaker 1: us through in principle, how China's growth or lack of

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Speaker 1: it could affect the US economy and the FED. Right, So, um,

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Speaker 1: you know what the Photo Reserve we we look at

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Speaker 1: China from a couple of ways. First, we have analysts

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Speaker 1: who like myself at the time, briefing the officials on

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Speaker 1: how growth outlook would affect China, would affect emerging market growth,

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Speaker 1: and then that would feed into the FED trade model

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Speaker 1: because foreign demand affects US export. And then that trade

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Speaker 1: model in term will affect the dollar model, which feeds

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Speaker 1: into what happens to the dollar, because obviously whatever it

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Speaker 1: happens to Chin Chinese growth will affected un and whatever

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Speaker 1: it happens to you and will affects the dollar UM

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Speaker 1: and and that will feed into the bigger you know,

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Speaker 1: domestic picture of the us GDP growth forecast and UM.

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Speaker 1: I think the the episode of China slowed down a

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Speaker 1: twenty sixteen highlighted for uh F O m C officials

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Speaker 1: how important China was in Chinese growth was to the

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Speaker 1: dollar and the primary channels through which China slowed down

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Speaker 1: effect US is through dollar and financial conditions, not through

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Speaker 1: direct trade and financial uh channels. In fact, if if

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Speaker 1: any FED models or any general Equaliver models, if you

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Speaker 1: just slow China growth by the amount we're talking about,

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Speaker 1: you know, from five to two, it would barely create

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Speaker 1: any us GDP growth slow down maybe just maybe like

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Speaker 1: point three percentage point. However, in those models, the people

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Speaker 1: at the FED modelers would put in extra shocks like

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Speaker 1: credit spread widening, dollar has to appreciate by a ten

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Speaker 1: percent That will get you to the more you know,

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Speaker 1: sensible forecast of UM. You know, a three percent drop

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Speaker 1: in Chinese growth should are slowed down in Chinese growth,

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Speaker 1: should it lead to about one percentage point slowed down

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Speaker 1: in us GDP. I think that would be about the

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Speaker 1: figure that are the big risk scenario will be showing

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Speaker 1: in the deal book. That is interesting because we think

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Speaker 1: of you, now, China is one of the biggest economies

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Speaker 1: in the world, and when it slows down, we think

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Speaker 1: of it as having immediate knock off. But I guess,

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Speaker 1: I guess part of the issue that people have long

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Speaker 1: complained about with China is that they don't necessarily buy

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Speaker 1: lots of goods from the rest of the world, so

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Speaker 1: they're not contributing to demand in the rest of the

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Speaker 1: world in the same way as you mentioned about trade.

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Speaker 1: But what does happen is that people just get frightened

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Speaker 1: of the slowdown in Chinese growth, and so there's this

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Speaker 1: tightening of financial conditions and people rush into the dollar,

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Speaker 1: and it's that increase in the dollar and things becoming

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Speaker 1: more expensive to to export for for America, that's what

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Speaker 1: has the impact. That's interesting. So um, so if you're

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Speaker 1: looking at that slowed down and used to it could

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Speaker 1: be potentially did you say one percent of the outcome? Yeah?

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Speaker 1: So what about inflation, I mean, is there a prospect

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Speaker 1: that the Federal Reserve does say, oh, well, now we've

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Speaker 1: I know, we've talked about having to have a lot

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Speaker 1: more rate increases, but actually China slowdown means that that's

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Speaker 1: going to do some of the work for us. What's

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Speaker 1: the what's the chance of that? You know. Traditionally, a

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Speaker 1: China growth shock should be very disinflationary through its effect

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Speaker 1: on commodity prices. Chinese demand for global commodities is huge

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Speaker 1: and it accounts for over fifty of global demand in

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Speaker 1: several metals categories, you know, like zinc, aluminum, um, copper.

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Speaker 1: Copper effect is a very good barometer of Chinese growth

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Speaker 1: if you you're looking for alternative indicator for a Chinese

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Speaker 1: growth um and as well as oil prices. So I

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Speaker 1: I wrote a paper with my UH former FED colleagues

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Speaker 1: on the global spillovers from China back then, and we

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Speaker 1: estimated that you know, suppose China's growth slowed um UH

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Speaker 1: four of GDP level over two years, so that would

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Speaker 1: be about two percentage point in the first year then

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Speaker 1: kind of what we're seeing right now. In fact, then

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Speaker 1: you could expect to see oil price fall by thirty

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Speaker 1: percent in the first metal prices. But today we have

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Speaker 1: a different situation. Offsetting this disinflationary China shock is the

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Speaker 1: oil potential oil embargo on UH you know, on Russia,

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Speaker 1: and I remember that a month or two ago, forecasters

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Speaker 1: or I bank commodities groups were saying that oil will

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Speaker 1: go to one eight or two hundred if there's an

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Speaker 1: oil embargo, and right now we haven't seen that or

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Speaker 1: even close to that. And that could be accounted by

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Speaker 1: the China demand um right so and one of the biggest, biggest,

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Speaker 1: So this disinflationary force, you know, it should be it

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Speaker 1: should be very disinflation disinflationary um. And and under typical circumstances,

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Speaker 1: China scrist slow down. The kind of magnitude that we're

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Speaker 1: seeing today should probably translate to about US c p

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Speaker 1: I falling by you know, one percentage point relative to spaceline,

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Speaker 1: which in the last few years would have been a lot.

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Speaker 1: But now when we're looking at seven or eight percent inflation,

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Speaker 1: it's not going to do the job. Yeah. And on

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Speaker 1: top of that, there's the offsetting force from whatever you

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Speaker 1: know that will happen with oil price if the embargo

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Speaker 1: were to content place. Yeah, okay, So I guess the

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Speaker 1: bottom line of this is that China's may on the

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Speaker 1: margin be a little bit helpful, but it could all

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Speaker 1: just get lost in the wash, and the Fed's still

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Speaker 1: got a pretty big inflation problem. You know the problem

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Speaker 1: of the US is we had excess demand for goods

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Speaker 1: and now we're seeing those accesses are subsiding, and in

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Speaker 1: the meantime, China is slowing so which which helped compressed

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Speaker 1: demand further. This really helped the FED, and it helped

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Speaker 1: the FED in in the way that that such that

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Speaker 1: the FED does not need to raise interest rate by

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Speaker 1: as much. Perhaps it's substitute it for some I guess

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Speaker 1: if you're sitting in the FED, you know you've had that.

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Speaker 1: And we've talked about this on the podcast before, because

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Speaker 1: lots of people are weighing in on the FED, and

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Speaker 1: you know, we've had Larry Summers complaining about how slow

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Speaker 1: they were to raise interest rates. You know, they have

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Speaker 1: now to some extent persuaded the financial markets and everyone

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Speaker 1: else that they're serious about inflation. They're thinking in terms

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Speaker 1: of half a percentage point increases, whereas we had got

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Speaker 1: used to this world of a court of percentage point

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Speaker 1: and potentially quite a few of those rates increases. I

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Speaker 1: guess if they were them, given how much criticism they've had,

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Speaker 1: they're going to be very reluctant to want to start

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Speaker 1: tamping down that rhetoric or they need a very good

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Speaker 1: reason to start saying, oh maybe we'll do a bit less,

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Speaker 1: because at least as far as the critics are concerned,

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Speaker 1: they still haven't gone far enow, Yeah, exactly right. I

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Speaker 1: think that the them being behind the curve um and

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Speaker 1: you know, now there's a lot of public pressure for

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Speaker 1: them to act, it makes them more reluctant to revive

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Speaker 1: the transitory uh language, even if some of those transitory

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Speaker 1: forces did turn out to be transitory. So there is

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Speaker 1: a risk that all the public pressures you know, could

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Speaker 1: cause effect to over tightened. But I think that risk

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Speaker 1: is still small relative to them, you know, still needing

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Speaker 1: to catch up to what they should be. UM as

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Speaker 1: we saw today at the CPI report, Um, sure, good

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Speaker 1: prices are declining. In fact that we saw we saw

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Speaker 1: a decline in many good good prices, the goods that

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Speaker 1: saw a huge ban during the pandemic. But the services

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Speaker 1: inflation is just gang buster. It's and you can see

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Speaker 1: it across all the categories, categories that we did not

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Speaker 1: even see increases or a rapid pace of inflation before,

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Speaker 1: like medical, water, sewitch education. It's just widespread, and that

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Speaker 1: highlight the mistake that the FED made last year. The

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Speaker 1: inflation problem we have today started out as an excess

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Speaker 1: demand on goods, you know, goods, goods prices driving driving

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Speaker 1: up inflation. But now those stuff, those those those forces

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Speaker 1: are readjusting hum coming back to normal, starting to become

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Speaker 1: to normal. But because of its slow response services, inflation,

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Speaker 1: which is more sticky, became very strong and it it's

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Speaker 1: now a harder problem to temp down. I guess you

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Speaker 1: have to be a PhD economist formerly of the FED

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Speaker 1: who can use technical terms like going like angbusters and not.

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Speaker 1: But do you as someone who used to be in

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Speaker 1: the FED, Just as a final question, I mean, I'm

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Speaker 1: quite surprised. You have some quite a former quite senior officials,

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Speaker 1: some of whom like Richard Clarenda or Brandy Quiles. You know,

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Speaker 1: we're in the FED on at a senior level. It's

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Speaker 1: helping to set policy. You know. Until the beginning of

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Speaker 1: this year or later last year, they've been out there

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Speaker 1: criticizing the FED. Richard Clarenda thinks rates are going to

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Speaker 1: have to go much higher than they've accepted. Randy Quailes

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Speaker 1: has said that they should have started increasing interest rates

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Speaker 1: in September along with some of the other officials who've

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Speaker 1: been away for longer, like Bill Dudley used to head

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Speaker 1: the New York FED. Do you don't normally get this

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Speaker 1: kind of friendly fire if you're sitting in the FED,

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Speaker 1: do you, I mean, it's quite unusual to have people

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Speaker 1: in the peanut gallery who actually were down in the

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Speaker 1: FOMC only a few months ago. Yeah. I could speak

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Speaker 1: to this from a from the point of view of

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Speaker 1: being a former FED staff and being in the FED

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Speaker 1: last year. I would say so. Richard Clarida is is

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Speaker 1: like the architect, the bran child of this new monetary framework.

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Speaker 1: So for him to criticize this, which is all about

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Speaker 1: sitting on your hands and letting in place together, I think.

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Speaker 1: You know, after this, the FED will have to do

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Speaker 1: a review of what went wrong, and one of the

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Speaker 1: likely conclusion is very similar to what happened in two

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Speaker 1: thousand and eight, which is group think. And um, after

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Speaker 1: two thousand and eight they did such a review, and

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Speaker 1: you know, they attributed to group think, and since then,

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Speaker 1: you know, they introduced an Alternative view box and TIL book.

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Speaker 1: But I mean, there's a group think, but at some

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Speaker 1: level that's just a diagnosis to say that we were

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Speaker 1: all wrong together. But that's what is essentially what power

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Speaker 1: has been saying, like, yeah, we were wrong, but so

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Speaker 1: is the consensus. But the thing is not everybody was wrong,

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Speaker 1: but you you need to it's it's there's also this

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Speaker 1: culled sure in in the FED where you know, in

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Speaker 1: normal times, I think, um, that culture would be good

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Speaker 1: because it's the culture is you know, record that model

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Speaker 1: based that stuff, use models to forek as inflation and uh,

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Speaker 1: and the bar is very high for you to be

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Speaker 1: to claim that something is really different today than yesterday. Well,

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Speaker 1: one thing we know for sure is that all the

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Speaker 1: the writers of FED statements long into the future will

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Speaker 1: think very hard before using the word transient. But anna woan,

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Speaker 1: thank you very much. Okay, thanks Stephanie. And so finally

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Speaker 1: to that little village in central Italy who's a hundred

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Speaker 1: and forty two residents have won the European Union Recovery

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Speaker 1: Fund jackpot, but must now also be a poster child

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Speaker 1: for the future of Europe. Es Alessandra Miliaccio. It's quiet

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Speaker 1: in the tiny hilltop village of Cravenano in central Italy.

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Speaker 1: The young people have all moved away to the larger towns,

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Speaker 1: and only a few elderly residents remain on the sun

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Speaker 1: Big plateau, along with the birds, an occasional car passing by,

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Speaker 1: and the sounds of the local fountain. Yet, Cravinano is

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Speaker 1: about to become the test site for Europe's most ambitious

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Speaker 1: economic experiment since the creation of its single currency. The

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Speaker 1: hamlet of a hundred and forty two residents just secured

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Speaker 1: a twenty million euro grant from the European Union's Recovery Fund.

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Speaker 1: The facility touted as Europe's new martial plan, aimed at revamping, revitalizing,

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Speaker 1: and digitalizing the old continent so as to finally boost

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Speaker 1: economic growth across the twenty seven member EU block. Clevinano

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Speaker 1: is receiving the money along with a very small group

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Speaker 1: of villages in Italy, as part of a broader European

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Speaker 1: project to fight the population. The town has plans to

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Speaker 1: attract new and younger residents through a plethora of initiatives,

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Speaker 1: from improving transport and connectivity to hosting researchers, students, tourists

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Speaker 1: and artisans in an attempt to jumpstart village life. The

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Speaker 1: success or failure of projects like this, both big and small,

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Speaker 1: in the euro region's weaker economies will help determine the

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Speaker 1: appetite of richer countries to extend support in future and

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Speaker 1: even to pull physical resources permanently. However, some critics suggests

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Speaker 1: just throwing around a bit of the bloc's financial largest

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Speaker 1: won't reverse decades of decline, and that the proposed improvements

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Speaker 1: in places like Clevinano are too little, too late. Alessander

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Speaker 1: to Rosie, the mayor of nearby Appopendente, which includes the

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Speaker 1: hamlet of Trivinano, understands the responsibility. A great risk is

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Speaker 1: in partidant. The risk is that in the first few

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Speaker 1: years there is a strong impact after the investment, and

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Speaker 1: then things slowly fade. We need to be able to

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Speaker 1: create a virtuous circle that can continue to live on.

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Speaker 1: The town needs to come alive, and to do that,

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Speaker 1: the first condition is to include and cater to all

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Speaker 1: components of society, from children to the elderly, from tourists

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Speaker 1: to restaurant owners to workers. If that is missing, there

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Speaker 1: is a risk that it will all fall apart once

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Speaker 1: the initial potion is over, leaving Nano and twenty other

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Speaker 1: villages one in each region and autonomous problems really will

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Speaker 1: dealt up four twenty million euros. Well two twenty nine

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Speaker 1: other local communities across the peninsula will share another five

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Speaker 1: and twenty million euros in recovery fund cash. The goal

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Speaker 1: is to counter the depopulation that is emptying villages across

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Speaker 1: Europe as people choose urban centers with jobs and better services.

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Speaker 1: In Germany, eastern regions are most affective. In France, the

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Speaker 1: phenomenon is visible nationwide, and in Italy it's the interior

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Speaker 1: that is generally worst hit according to European Commission data.

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Speaker 1: Maybe not easily meets the criteria of remoteness. It's about

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Speaker 1: two and a half hours by car from Rome, past

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Speaker 1: endless fields, winding roads, end up a tiny platel There's

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Speaker 1: no school and the post office is rarely open, but

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Speaker 1: it does have two restaurants, one of them near the

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Speaker 1: village's ramparts has been run for decades by Gianfranco Delli Campi.

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Speaker 1: These days he only opens on weekends for lack of clients,

430
00:28:00,240 --> 00:28:03,040
Speaker 1: but he talks about the past from his tiny kitchen

431
00:28:03,200 --> 00:28:11,600
Speaker 1: as he prepares artichokes for the weekend service. When there

432
00:28:11,680 --> 00:28:14,919
Speaker 1: was a child that we had three or four times

433
00:28:14,960 --> 00:28:20,320
Speaker 1: more people here, maybe even five times more. My father

434
00:28:20,440 --> 00:28:24,480
Speaker 1: told me there were six hundred ninety voties citizens in

435
00:28:24,800 --> 00:28:31,720
Speaker 1: nineties sixty four. I really hope people returned the countryside

436
00:28:31,720 --> 00:28:34,720
Speaker 1: and the fields were full of people in the past

437
00:28:34,800 --> 00:28:39,560
Speaker 1: and now they stand empty. There were children were school

438
00:28:40,280 --> 00:28:44,040
Speaker 1: when I went to school, there were forty kids. Mayor

439
00:28:44,080 --> 00:28:47,320
Speaker 1: to Rosie, an agronomists and a former member of parliament,

440
00:28:47,600 --> 00:28:49,840
Speaker 1: has come up with a plan to bring to Nano

441
00:28:49,960 --> 00:28:53,480
Speaker 1: back to life by focusing on lots of small projects

442
00:28:53,840 --> 00:28:58,160
Speaker 1: no manic construction sites. The village lies close to the

443
00:28:58,200 --> 00:29:02,560
Speaker 1: via French Regena, for example, one of Europe's oldest pilgrim itineraries,

444
00:29:02,760 --> 00:29:06,160
Speaker 1: which goes from Canterbury all the way to Rome. The

445
00:29:06,280 --> 00:29:09,960
Speaker 1: idea is to restore homes which can become accommodations for

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00:29:10,000 --> 00:29:12,960
Speaker 1: the pilgrims and tourists and to ferry them up the

447
00:29:13,040 --> 00:29:16,360
Speaker 1: hill in new electric buses paid for by EU cash,

448
00:29:16,680 --> 00:29:20,920
Speaker 1: which would also attract locals. The mayor also wants to

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00:29:20,920 --> 00:29:23,840
Speaker 1: restore the town's small castle, which sits on the very

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00:29:23,960 --> 00:29:26,720
Speaker 1: edge of the hamlet. The plan is to turn it

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00:29:26,760 --> 00:29:30,640
Speaker 1: into an exhibition and training space for students already coming

452
00:29:30,680 --> 00:29:33,840
Speaker 1: to the valley to study its ancient sites, and she

453
00:29:33,960 --> 00:29:37,480
Speaker 1: wants to attract apprentices from a nearby trade school to

454
00:29:37,640 --> 00:29:42,480
Speaker 1: make Trivinano a center for artisans, thus creating jobs. You

455
00:29:42,600 --> 00:29:46,320
Speaker 1: money will also fund infrastructure to deliver faster web services

456
00:29:46,520 --> 00:29:50,320
Speaker 1: and greener energy. Now, once locals and pilgrims start coming

457
00:29:50,360 --> 00:29:53,800
Speaker 1: up the hill to visit or settle the Rosie thinks

458
00:29:54,120 --> 00:29:58,600
Speaker 1: remote workers from further afield will follow. But the idea

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00:29:58,880 --> 00:30:02,040
Speaker 1: of dolling out law sums of money in far removed

460
00:30:02,160 --> 00:30:08,200
Speaker 1: places does have its critics. One a history professor at

461
00:30:08,240 --> 00:30:13,720
Speaker 1: the University of Molize in southern Italy, I'm me shured,

462
00:30:14,200 --> 00:30:17,080
Speaker 1: even if they succeed that you don't resolve the overall

463
00:30:17,120 --> 00:30:19,640
Speaker 1: program of the small villages in the internal areas of

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00:30:19,640 --> 00:30:23,640
Speaker 1: the country by just making twenty one aumlets of excellence.

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00:30:24,200 --> 00:30:28,880
Speaker 1: Communities needs access to health, schools and transport. If you

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00:30:28,920 --> 00:30:32,840
Speaker 1: don't have these services, which means having the fundamental right

467
00:30:33,000 --> 00:30:38,360
Speaker 1: to health, education, mobility, the rest is just talk. Italy's

468
00:30:38,360 --> 00:30:43,760
Speaker 1: Cultural Heritage Minister Dario Francescini, was, however, more hopeful. Speaking

469
00:30:43,760 --> 00:30:47,120
Speaker 1: to reporters last month, he highlighted how well spent money

470
00:30:47,280 --> 00:30:50,600
Speaker 1: aim to jumpstart village life can really make a difference,

471
00:30:50,960 --> 00:30:54,400
Speaker 1: particularly if private investors come in to fill the gaps,

472
00:30:54,840 --> 00:31:00,240
Speaker 1: at which point he said, there's no stopping the process.

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00:30:59,800 --> 00:31:03,720
Speaker 1: That Italy is an extraordinary open air museum. It's not

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00:31:03,800 --> 00:31:06,560
Speaker 1: just the well known capitals of art. There are other

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00:31:06,640 --> 00:31:11,120
Speaker 1: beautiful places that unfortunately have lost their population. This is

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00:31:11,160 --> 00:31:13,880
Speaker 1: a huge challenge that can help us recover some of

477
00:31:13,920 --> 00:31:17,440
Speaker 1: our historical and artistic treasures, but it can also bring

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00:31:17,520 --> 00:31:20,800
Speaker 1: jobs back now that smart working and broadband allow it,

479
00:31:21,200 --> 00:31:40,960
Speaker 1: as well as people back to these extraordinary locations. That's

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00:31:40,960 --> 00:31:43,520
Speaker 1: it for this episode of Stephonomics. We'll be back next week.

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00:31:43,800 --> 00:31:46,080
Speaker 1: In the meantime, please do rate the show if you

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00:31:46,160 --> 00:31:48,840
Speaker 1: like it so more people will listen and check out

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00:31:48,880 --> 00:31:51,800
Speaker 1: the Bloomberg News website for more economic news and views

484
00:31:51,840 --> 00:31:54,959
Speaker 1: on the global economy. You can also follow as Economics

485
00:31:54,960 --> 00:31:58,920
Speaker 1: on Twitter. This episode was produced by Magnus Henderson with

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00:31:59,040 --> 00:32:03,000
Speaker 1: support from some Saddi. Special thanks to Flavia Rotondi for

487
00:32:03,200 --> 00:32:06,120
Speaker 1: telling Alessandra Miliacco about that village in the first place.

488
00:32:06,640 --> 00:32:10,080
Speaker 1: Also to Dan Moss and Anna One. Mike Sasso is

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00:32:10,120 --> 00:32:13,440
Speaker 1: executive producer of Stephanomics and the head of Bloomberg Podcast

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00:32:13,680 --> 00:32:30,520
Speaker 1: is Francesca Levy. M