“We don't need a blood and tears maneuver” to reduce the debt. This was said by the Minister of Economy Giancarlo Giorgetti, speaking in Rome atannual meeting of the Italian banking association (Abi), an event he also attended the governor of the Bank of Italy Fabio Panetta which predicted GDP growth of +2024% for 0,8, with +0,3% achieved in the second quarter alone. The event was opened by the president of the ABI, Antonio Patuelli, who loudly asked for a reduction in taxation that was too "heavy" on savings and a rethink of the ACE to favor businesses.
Giorgetti: “There's no need for a blood and tears maneuver”
“Exiting the condition of a high-debt country is an achievable goal” and “no need for a blood and tears maneuver but a serious policy of control of public spending" so that Italy can emerge from its condition of "country always under examination". This was stated by the Minister of Economy Giancarlo Giorgetti at the annual ABI meeting. According to him, it is an "achievable objective and to be achieved with determination", also because "balancing the budget, net of previous debt, is a moral duty for future generations".
In an “unstable and uncertain global context, the economy Italian confirms excellent stability, macroeconomic trends are positive” continued the minister, recalling that “over the last 3 years the growth trend has been more supported by other countries in the euro area. The first quarter data is in continuity with this. The 0,3% increase in GDP is comforting because to date the growth achieved would already be equal to 0,6 and would rise to 0,9% if the governor's estimates were confirmed". L'1% GDP growth target for 2024 established by the Def is therefore "well within our reach", added Giorgetti, defining it as a target "based on reasonable and responsible criteria". The Minister of Economy also recalled how our country has already seen its efforts recognized by "Italian and foreign savers" with the subscription of the BTP Valore.
During his speech, Giorgetti also spoke about monetary policy. “The acceleration” in the dynamics of interest rate reduction “must be gradual but decisive, because a further reduction in demand will be unsustainable, or difficult to bear, for an economy like the Italian one that needs to breathe”, he warned.
The head of the Economy then focused on the performance of the “defaults” on bank loansthose guaranteed by the State on financing, saying that "it is contained and under control" as well as decreasing. The minister recalled how of the approximately 300 billion as of December 31, more than half (167) referred to Covid and energy crisis loans.
Closing his speech, the minister finally addressed the audience: le Italian banks, he said, “are and will continue to be the operational arm of the economy of the country, of the entrepreneurs who take risks every day to do business and make the country competitive". “They are men and women of flesh and blood and therefore the bank is not an algorithm and the banker must not be and, above all, cannot be: put intelligence and heart into it, the results will also be better", he concluded
Panetta: “Second quarter GDP +0,3%, yes to confidence, no to excessive optimism”
“Economic activity in the euro area, after having stagnated for over a year, grew by 0,3 percent in the first quarter of 2024”, while inflation in June “decreased by 2,5%” , with its underlying component at 2,9%. Also in Italy, in the first three months of the year, “growth was also 0,3 percent, and would have remained of the same order of magnitude in the second.” This is what was stated by the governor of the Bank of Italy, Fabio Panetta, at the annual meeting of the ABI, during which he also underlined that in our country “the expansion of services continues, especially those linked to tourism, while the weakness of manufacturing continues. For 2024 as a whole, Consensus Economics forecasts indicate growth of 0,8 percent".
“The activity is mainly driven by net foreign demand”, while household consumption “is growing moderately, supported by positive trend in the labor market: in the first five months of 2024, there were, on average, almost half a million more people employed than in the same period of 2023. The wage trend remains moderate,” added Panetta.
All in all, the Italian economy grows "at a moderate pace" and can count "on the strengthening of businesses, the solid financial position of families and the strength of banks". According to Panetta, these are factors that "allow us to look forward with confidence, but should not lead to excessive optimismor". “The solidity of the banks today represents an element of strength in our production system”.
Panetta: “Banks must contribute to relaunching the economy”
The economic recovery, after a long period of stagnation, "is a positive sign", commented Panetta, underlining however that its future evolution “remains uncertain”. Also for this reason, the banks “now have the task of accompanying the recovery of demand, supporting families and businesses and preventing credit from being a brake on consumption and investments" The banks "will be able, in this way, contribute to the revival of the Italian economy” underlined the number one of Via Nazionale, highlighting that the contraction of credit to the economy caused by the monetary restriction did not have disruptive effects, unlike what happened in the past. “This also reflects the robust income and capital condition of the banks, to which the regulatory reform launched after the financial crisis contributed".
Panetta on wages: “Increase means recovery of purchasing power”
Panetta then spoke about salaries. "Lthe current increase in wages represents an inevitable recovery of purchasing power, destined to weaken as the loss to be recovered is reduced", he predicted, underlining that "the lower costs of intermediate production inputs and the substantial profits accumulated so far allow companies to absorb wage growth without transferring it to final prices". Finally, "the increase in labor costs on the one hand and the drop in energy prices and the cost of capital on the other will favor an increase in the capital-labour ratio and productivity, also contributing in this way to containing inflationary pressures". A positive element which represents a marked difference with what has often distinguished Italy.
Panetta: “There is no predefined path on rates”
Speaking about monetary policy, Panetta reiterated the words said several times by Christine Lagarde: the ECB does not have a predefined path. “The reduction in official rates can continue gradually, accompanying the return of inflation to the target, if macroeconomic trends remain in line with the expectations of the ECB Governing Council,” she explained. Otherwise, “if unexpected events instead risk moving away from the expected path, in one direction or another, we will have to be ready to promptly adjust our decisions”. Furthermore, according to Panetta, “future monetary policy decisions will have to take into account two important factors. The first is that past increases in official rates are still compressing demand, production activity and inflation and they will continue to do so in the months to come." The second is that "the expansionary effects of the monetary easing that is looming over the next few months will be attenuated by the further contraction of the Eurosystem balance sheet, which will continue to act in a restrictive sense on the costs of funding and on the liquidity of banks and therefore on the supply of credit to the economy".
Patuelli: “Taxation on savings must be reduced. Rethinking ACE to strengthen businesses"
Savers in Italy suffer heavy taxation which often directs them to invest abroad" and which must therefore be reduced. The president of the Abi said it Antonio Patuelli, opening his report at the association's annual meeting.
Patuelli explained that currently "savers who invest in the medium and long term suffer a taxation of almost 60% of the gross income produced by banks: add the IRES, the 3,5% surcharge and the local ones, the flat tax on dividends, the IRAP, the IMU and the stamp duty". Savings invested in banks' liquidity instruments are essential for disbursing loans, he added.
The president of the ABI also called for the arrival of measures aimed at promoting youth work and business assets. “A more solid economy in all sectors is essential – he said – we ask that Ace be rethought to encourage businesses to strengthen the solidity essential for new investments". “Italy – he added – must develop new projects to encourage young people's economic and work initiatives, not only for the purchase of their first home, to provide young people with more opportunities for qualified work, competitive with those of other European states ”.
Patuelli then defined a priority is “the completion of the Banking Union", "to be achieved with a 'central design', avoiding the multiplication of regulations, promoting the competitiveness of banks in the EU and the prevention of banking crises, with interbank funds which must be preferred to the more expensive 'resolutions' and measures such as the 'bail in': savers and workers must always be respected", he stated, underlining that one of the strategic objectives to be pursued is “the harmonization of tax systems and rates”.
“Banks absolutely need to have stability in the many international, European and national regulations that need to be simplified: in 2023 those addressed to banks were several thousand,” said the number one of the ABI who, closing his speech, stated : “There must be full and fair competition between big tech, crypto assets and banks, with identical rules, including fiscal ones, and equal supervision, in an open society, without technological monopolistic oppression, for a competitive, democratic and sustainable economy, never resigned and inert towards climate change". According to him, “equal rules are also essential in Italy to guarantee equality in the starting points for correct competition, as for the “PagoPA” platform, for which a balanced solution has been found."
