The Culture Fund proposed by the Courier? A bad and harmful idea according to Mi Riconosci, here's why

by Redazione , published on 03/04/2020
Categories: News / Disclaimer

An article in the Corriere della Sera, signed by Pierluigi Battista, published last March 26, caused discussion: the author proposed the establishment of a “National Fund for Culture” or “Culture Bond,” of which, however, Battista himself could not give the explanation (“it is necessary to study well its practical feasibility that only experts in economics and finance could indicate in technical detail” but it would be “a Plan, with which Italian savers would contribute to save from disaster, or even death, that immense heritage made up of drama and film theaters, dellOpera theaters, museums, galleries,” etc.). Battista never goes into details but writes that it could be a kind of loan “managed with the tools that are proper to banks and the financial world, administered by an entity that brings together public and private and that proceeds with criteria for the distribution of funds to be allocated to each individual institution and cultural that must be fair and transparent, without fetters and opacity.”

In essence, it seems that Battista wants to talk about an investment fund. The idea has been well received by some organizations such as FAI, MAXXI, Federculture, and others, but no economist or at any rate no technical person has supported it. The idea of an investment fund for culture has no equal in Europe, and it would be, explains the collective Mi Riconosci? I am a cultural heritage professional, who analyzed it with the help of some economists, as “an operation with zero economic benefits and very high risks, which would favor only a very few unscrupulous investors, national and international.”

An investment fund is a financial instrument through which securities (bonds) can be issued that involve an “exchange” between the person who issues them and the person who buys them: the buyer guarantees liquidity to the person who issues them, and the latter, in addition to obviously having to return the sum, in return pays interest to the buyer. Since a bond is, trivializingly, a kind of loan, the loan must be secured. However, a bond, in order to be attractive to buyers, must be beneficial to them. A sector bond, linked to culture, would be disadvantageous for the state (and in fact, the collective explains in a long article published on its official website, there is nothing like it in Europe because “public cultural heritage has very strong management costs, is non-profit and can guarantee income to investors only at the cost of very hard and, to summarize, useless sacrifices”) because, since investing in Italy’s public culture is a high-risk choice, especially at a time of severe crisis like the current one, no one would buy a “culture bond” unless the state bends to “very hard conditions to guarantee investors, such as (further) cutting costs and personnel, putting certain public assets up for sale, and so on.”

The state, rationally, would not benefit economically, Mi Riconosci hypothesizes, but large investors with large sums (30, 40, 50 million euros are the figures hypothesized by the collective) could benefit. There are three scenarios hypothesized. The first is the optimistic one: “Italian culture in a few months is restarting, theaters and museums are full, there is a tourism boom and generalized hunger for culture,” and “since everything has been tied to the investment fund, all the revenue goes to the investors, with zero possibility of job growth, since cost containment would certainly be among the preconditions.” The second scenario is the balanced one: “investors beat the cash to get the economic return that the state had guaranteed them at the time of the bond sale, but given the moment of crisis, culture is struggling to restart,” which is why the state, to avoid the pessimistic scenario, “repays investors in tickets for theaters, exhibitions, museums (e.g., 100 euros of tickets for every 20 euros invested in bonds), or other services, guaranteeing them the possibility of reselling them at a higher price.” Finally, the third scenario, the pessimistic one, predicts that things go wrong, culture does not restart, and the state is not solvent, i.e., unable to repay investors. “So all the cultural assets that were included in the Fund become the property of the investors: whether they are Russians, Saudis, Italians, Chinese, it makes no difference, it matters who invested the most. Mind you, in order to make such bonds attractive, it would certainly not be enough to gamble on small provincial museums, but on valuable pieces, risking everything.”

So, says Mi Riconosci, in fact Corriere della Sera, “we do not know how consciously, is asking the Italian State to put its public assets on the financial market now to allow others to do business, hoping that, even in good faith, many small Italian investors will decide to buy 10-20 thousand euros of Culturabond, thinking they are helping Cultural Heritage, when instead they would only be helping the business of big investors.”

<p “We don’t know why, we don’t know how it is possible that such an idea appeared in Italy’s most important national newspaper, we don’t know who suggested it,” the collective argues, “and we are convinced that most of the people who in good faith are supporting the idea proposed by Pierluigi Battista in Corriere have not understood what it would impose.”

“We want to hope,” the collective concludes about the proposal, “that those who supported it were victims of a misunderstanding and can justify themselves adequately: at a time of crisis such as this, it is nothing short of incredible that one would go so far as to ask the state to gamble its cultural heritage on the stock market, under conditions that are necessarily very unfavorable for the state itself. Is it possible that anyone could think of doing business on the stock market on the skin of Italy’s cultural heritage?”

The Culture Fund proposed by the Courier? A bad and harmful idea according to Mi Riconosci, here's why

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