A strategic vision is needed to overcome the gap that has always characterized the North part and the South of Italy. Not only that. They are far preferable effective PNRR projects, also agreeing to a time extension, rather than projects quickly completed in the South of Italy. This is what the governor of the Bank of Italy is asking for, Fabio Panetta, in his speech in Catania. Panetta, in fact, is participating today in a public meeting organized in the Sicilian capital as part of the initiative “Traveling with the Bank of Italy”, a series of meetings with the territories.
According to the Governor, "if due to the large amount of investments a conflict were to arise between the two objectives - effectiveness and speed - it would be preferable to safeguard the first and evaluate the possibility of agreeing, for these regions, an extension of the project implementation times".
Panetta to companies: “Come to the South”
Panetta then launches a appeal to Italian and foreign companies to invest in Southern Italy to "do business" since better conditions have been created compared to the past and the southern regions have a new potential after the latest geopolitical developments. Speaking in Catania, Panetta underlined how in the South "there is a third of the Italian population but a gap in consumption and per capita income with the rest of the country. “Those who come from other regions or areas” “can contribute to development”. “We have realised that delocalising, even if it reduces the cost of labour, has a series of risks that in the past were not considered sufficiently. Having gone through this awareness of risks and costs, companies are asking themselves the question: is it better for us to continue delocalising or look for new solutions?”, the Governor asked.
Panetta: “The South needs reforms, not assistance”
Southern Italy has grown more than the country after the pandemic and now has “development opportunities” due to the end of the global delocalization phase and for the production of renewable energy and will have to resort “not to welfare policies, but to investments and reforms capable of increasing production capacity”. Panetta underlines “with caution” the positive factors of the southern economy in recent years, which are “indications not proof”, and to look forward to the huge community resources, which can be increased by attracting private capital”.
Panetta: resources for 5% of GDP on the way
In the current decade, a new wave will arrive in the South amount of funding “equal to 5 per cent of GDP” of the area every year, the Governor says. To the resources of the PNRR, he notes, “will be added those of the new programming cycle of the structural funds and the Development and Cohesion Fund” while “the Infrastructure Equalization Fund for the South could add others”. For this reason, he warns, “it is necessary to ensure an efficient use of resources, also preserving in the future the method of the PNRR, which provides well-defined objectives, a constant evaluation of the methods of use of resources and interventions to support the weakest administrations from a management point of view”.
Panetta: Rate cuts could accelerate
The path of rate reduction by the ECB "could be accelerate in the coming months” says the Governor of the Bank of Italy (and member of the Governing Council of the ECB) answering a question on the monetary policy scenario in the eurozone in light of the half-point cut in reference rates decided by the Fed on the eve. Panetta explains to the audience the Fed's decision to be tied "probably of alower inflation than what US central bankers feared and hence the decision to slow down demand less. Panetta recalls how in Europe there has long been a debate “on the opportunity to cut rates and by how much”. In Europe there are indicators of greater weakness in the economy and in light of the Fed’s decision “the reduction could be accelerated in the coming months”.
