It is common opinion that the best Governors of the Bank of Italy in the last half century have been four: Guido Carli, Paolo Baffi, Carlo Azeglio Ciampi e Mario Draghi. Their technical competence is indisputable but above all their pride and determination in defending the autonomy of the Central Bank from everything and everyone and from the Government in the first place. Memorable was the attack against the "arch-confraternities of power" that Guido Carli launched in his Final Considerations in an assembly of central bank participants in the early Seventies.
The new Governor of the Bank of Italy, Fabio Panetta, who takes office today at the helm of the institute in via Nazionale, will he be inspired by the lessons of his four great predecessors? And he will know how to stay away from the autarchic banking dirigisme and the sectarianism of another Governor like Antonio Fazio (of whom Panetta was very loyal) who ended up falling in love with very unreliable bankers such as the then boss of Popolare di Lodi, Giampiero Fiorani? But, above all, Panetta, who has indisputable technical expertise, will be able to hold high the flag of via Nazionale's autonomy towards the Government Melons? For the new Governor, the real test will be precisely this.
Carli, Baffi, Ciampi and Draghi were authoritative Governors also because they were independent: and Panetta?
Carli, Baffi, Ciampi, Draghi and, lastly, Ignazio Visco who left via Nazionale yesterday, were authoritative Governors also because they were independent from political power. On the contrary, a Governor who is too friendly with the Government and the Prime Minister would lose credibility despite his technical competence. The doubt of these hours is legitimate because it is no mystery that Panetta has always cultivated political sympathies for the right and it is no mystery that for Prime Minister Meloni he was the first choice as Minister of Economy of the new center-right government. But Panetta is a man of the world and it is likely that he will not fall into the trap. No one will be satisfied with simple declarations of principle but it will be on the concrete issues of economic policy that public opinion and the financial markets will test Fabio Panetta's blood. Especially on three points: growth, public debt and membership of the ESM.
Will Meloni tame Panetta or will the Governor persuade the prime minister?
On the growth which risks reducing again, after the happy two years of the Draghi Government (+12% in 2021-2022), to the level of a telephone prefix, the new Governor will be able to press the Government on reforms and on the full activation of the Pnrr in operation of a recovery in investments? But it is on the debt/GDP ratio that the new Governor is expected to face the acid test. It is the terrain on which financial markets, rating agencies and international investment funds scrutinize Italy with greatest perplexity. In the Nadef the Government hypothesizes a purely marginal debt reduction with a decrease from the current ratio debt/GDP from over 140 percentage points to just 139,6% in three years. This is the weakest point of the budget maneuver and moral suasion from the new Governor of the Bank of Italy to induce the Government to do more, much more would be highly appreciated. Ditto for the ESM, because Italy's failure to join cries out for revenge. It may be that Meloni and her ministers, considering the new Governor one of their camp, will listen to him. But Panetta will have to keep his back straight, even at the cost of assuming uncomfortable positions when necessary. In the end, will Meloni tame Panetta or will the Governor reorient the prime minister? Nice challenge. We will soon understand how it will actually go.
