4751 copy.jpgElections & Institutions 

Gioia Ghezzi on Europe’s Integrated Railways

Leading up to the United Kingdom’s referendum on whether to remain part of or leave the European Unionarguments from both camps have debated both the economic and the symbolic implications of a vote for Brexit. Although many of these discussions have centered on monetary policy, the potential effects of the U.K.’s decision to leave or stay span industries as well as nations. World Policy Journal editor emeritus David A. Andelman spoke with Gioia Ghezzi, chair of Ferrovie dello Stato Italiane, the Italian national railway system, on the sidelines of the recent workshop of the Council for the United States and Italy in Venice about infrastructure’s role in an integrated Europe and how Brexit could alter this geopolitical landscape.

DAVID A. ANDELMAN: Railroads have traditionally been one of the principal glues that hold a country, region, or continent together. Are you concerned that there are forces now driving Europe apart that even the railways will not be able to tie together in the future if these trends continue?

GIOIA GHEZZI: Not yet. There are a number of activities that actually began when Europe was much stronger that are now bearing fruit. I’m thinking, for example, of the first of June this month. We all went to Switzerland—all European neighboring countries, the presidents of Italy, France, Austria, Germany, Lichtenstein—to open the Gotthard tunnel. And this was hailed, very much like the Chunnel between France and the U.K., as a way of integrating Italy. Like this infrastructure achievement, there are others. For example, in Italy, there is the Brenner Pass between Italy and Austria. We’re digging a tunnel for the railways, and there is Turin to Lyon, which is part of the so-called corridor between Kiev and Lisbon. There is another one in Tarvisio linking to Eastern Europe. So, in a way, decisions taken when Europe was much stronger and more united are coming to fruition now, and there is no turning back. That infrastructure is there, and is making us more connected. Having said that, in April this year, the European Commission approved the so-called fourth railway package, which calls for a more integrated railway in Europe and more competition. And again, through healthy business competition, I think more integration will come.

DA: Nevertheless, you’ve expressed some concern about the Brexit process. How do you envision that playing out?

GG: If you look at the Brexit scenario, there are two possible reactions. One is a complete unfolding of Europe. The other is a reaction of strength, a reaction of the remaining countries who will understand more the need to come together, particularly to tackle a number of issues that are common, and that we have discussed here in Venice: migration flows, terrorist threats, climate change. There are so many issues that require a joint approach and if you fragment the countries further, you lose the whole. As always, policies need to be implemented, so the calls for more competition and more integration need monitoring of those policies. Countries have very clever ways to put up protectionist barriers, and you see that in railways as well.

DA: How does that manifest itself in railways?

GG: I’ll give you an example without naming countries, but Italy has been wanting to operate in a neighboring country for many years, and they’ve said, well, our safety laws require a certain device which is actually very obsolete—there is only one manufacturer that used to make the device, and it’s out of production now—and we would need about 20 of these devices; when there are 700 in stock and that country bought them all so that we cannot access them. Or, for example, when the tunnel between France and the U.K. was opened, there were non-French or British players who wanted to be able to compete on that tract. And again, the two countries put up novel safety requirements, and they constructed their trains and infrastructure in such a way that other very big players, like Siemens, for example, were unable to compete. So there are old tricks for which you need a very fast intervention, and slowness is our worst enemy. Entities like the European Commission, the antitrust commission, need to come in very quickly, and really apply the law in the spirit that it was written.

DA: Some people have suggested that there’s too much bureaucracy—too much direction from Brussels or from the center. You don’t feel that way?

GG: No. Not at all.

DA: In the United States, we also have this concept of states’ rights which is becoming much more important: that states should have greater and greater say, on issues like abortion, for instance, over what happens within their borders.

GG: And there will always be that tension between what makes sense to legislate centrally and what makes sense to legislate locally on a much smaller scale. In Italy, there has been a renewal because the fragmentation among Italian regions on national interest issues like energy, for example, or even investment in presenting the country abroad—it doesn’t make sense for, say, Tuscany to go to a China fair promoting only Tuscany. Promoting Italy would be much more cost effective, much more beneficial, for the country as a whole. So there is always that tension. I don’t feel, at least in the field of transportation and railways, that there is too much intervention. I think there is good policy coming from Europe, but it has been long in coming, so from that point of view, I wish it had been a faster process.

DA: Italy has traditionally been considered one of the weaker sisters of Europe. How self-reliant do you think Italy is becoming? The Italian railways seem to be modernizing enormously; how important is that north-south flow of resources to Italy’s future development?

GG: The flow of resources is absolutely critical. In terms of Italy being a weaker sister, as you describe it, I think that the current government has really imposed a shift even at the European level. There is strong assertion on a number of issues: migration policy is one, but also defense: intervention or not in Libya, for example, or economic issues in discussing austerity versus growth. Opening up a dialogue and then actually winning the argument on what was most beneficial for Europe, whether to impose very, very tight austerity that would hinder growth as well, or have a more flexible approach—I think the respect the country has gained is immense from that point of view. The Italian railways are a very good example of that. In 2015, for the eighth fiscal in a row, we’ve turned considerable profits. For the sixth year in a row, we have recorded higher returns than comparable systems in Europe, like the German or French railways. Also, we’ve led the way on high-speed trains and technological innovation, and this is recognized abroad.

DA: You really do have a very advanced system. You can go, for instance, from Rome to Milan in three hours.

GG: Less than three hours.

DA: That’s like going from Boston to New York.

GG: It’s 550 kilometers. I was checking the old timetable, and in 1960, it took eight hours to make that same trip. In Greece, at the moment, between Athens and Salonika, it is still eight hours. It’s the same distance. And shortening that distance is absolutely critical for the country, giving them mobility. For consumers, we are also the cheapest railway in Europe. It’s a very cost-effective way of moving the country, through moving ideas, connecting and helping businesses.

DA: It’s been pointed out that that more and more people are using trains, rather than planes, to get around within Italy. Is that a trend you’ve seen?

GG: Absolutely. I think that Italian airlines have suffered enormously from our own technological advances.

DA: What do you see in the future for Ferrovie dello Stato Italiane?

GG: I think a lot about climate change. I think that our company is very committed to sustainability. Railways, both for freight and for consumers, are the most sustainable means of transport globally. Even when they’re not electrified they are still the means of transport with the lowest footprint. The Italian railway network is mostly electrical, so it’s very low-impact from a pollution point of view. Even in the U.S. or in the U.K., it’s still the least polluting system, and on a global scale, the train covers 8.2 percent of the transport market, accounting only for 3.6 percent of the total amount of greenhouse gas emissions and for a 2.1 percent share of final energy consumption. I think that in a future where we need to radically rethink our carbon footprint, we must determinedly shift to this technology, which exists today. We may consider new technologies, like hyperloop trains, that might be even more beneficial, but at the moment we know that an increase of the share of rail transport would be very beneficial and that we need to put a stop to lobbies that push us in different directions.

DA: You’ve spent a lot of time in England for family reasons. Which way do you think England is going to vote on Thursday’s Brexit referendum?

GG: I think, and hope, that England will vote for staying. Otherwise it will be very detrimental for the U.K. Collective memory is very short, but I moved to that country in 1991. I remember when Italy’s GDP was bigger than the U.K.’s, and I remember the poverty, in England, in the late 80s, early 90s, and I think it will go back to that. Statistical analysis shows—there have been very few facts on the table, it’s been a very emotional campaign, with a lot of diversion, but analysis shows that not even by 2030 will the GDP of the U.K. go back to what it was in 2015 if we vote for Brexit. And I’m terribly sorry to say that I do think that the murder of Jo Cox will have an impact on the vote, which was very close before her death, very 50-50, and will shift it toward staying.

DA: One final question: When you travel from London to Rome, how do you go?

GG: From London to Rome, I fly.

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This interview has been edited and condensed for clarity.

[Photo courtesy of Gioia Ghezzi]

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