Fabio Panetta is his first Final Considerations since Governor of Bank of Italy. Having taken up the baton from Ignazio Visco last November, he spoke to the audience in Via Nazionale a few days before the European elections. Bankers, guests, commentators and analysts await him, ready to read in his words changes of direction compared to the past and more or less explicit indications that can in some way be interpreted as a ‘political’ signal, understood in a high sense, as a direction towards which to direct public action. And the main trait that can be traced is that ‘pro-European’consistent with his professional history and with the approach he has had in these first months at the helm of Palazzo Koch.
If one really wants to compare Panetta’s analysis to that of his predecessors, they emerge some ‘Draghian’ elements. Not so much of Mario Draghi Governor, now too distant in time for a comparison that holds up, but of the last Draghi, the one who reminds Europe of the need and urgency of change.
Panetta, as per his prerogatives, chooses a pragmatic approach to reach a conclusion that has significant weight when looking at what Europe can and should be in the next legislature: “It is necessary, in the collective interest, to implement initiatives at European level”. Essentially, we need more Europe because only Europe can put the huge resources we need on the table. Panetta’s reasoning, drastically summarized, is that more Europe is better for everyone.
“Common policies are necessary in the environmental, defence, immigration and training fields”, he says, highlighting that “the financial commitment will be huge: for the climate and digital transitions alone and to increase military spending to 2% of GDP , the European Commission estimates a need for public and private investments of over 800 billion every year”. Pursuing such a vast plan at a national level, he explains immediately afterwards, “would involve duplication of expenditure and the renunciation of economies of scale. It would encounter obstacles in the fiscal capacity of several countries, with the risk of compromising the necessary breadth of the commitment and accentuating the fragmentation of the single market”. Not only. “Since many projects concern common public goods such as the environment and external security, an insufficient amount of investment would harm all countries and all citizens of the Union”.
What, then, is the main path? “A European budget it would allow the overall fiscal orientation to be defined no longer as the sum of national policies, but based on the needs of the area’s economy; would make it possible to effectively deal with strong and prolonged common shocks, such as the pandemic or the energy crisis, promoting coherence between budgetary policy and monetary policy”. The market is also needed. “It would be illusory to think of financing the enormous volume of investments necessary for the competitiveness of the European economy without a preponderant contribution of private savings and without the professionalism of intermediaries”. Direct consequence, “a European capital market is therefore essential“. However, two elements are needed that are still missing: “a risk-free European title” and “the incompleteness of the Banking Union” must be overcome. There is a lot of Draghi in the ‘Europeanist’ Panetta. (By Fabio teaches)
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