The United States and the Question of duties; theEurope and the answers and actions that are still missing; democracy that will come; the new balance between politics and finance in Europe and in the world; the role of theItaly and the prospects of the relationship between banks and businesses: these are some of the issues at the centre of the discussion that we expect at the The European House Ambrosetti in Cernobbio (Teha), which kicks off on Friday, September 5. An event that, for years, has represented the symbolic "gong" of recovery after the summer break. Last March, during the spring session dedicated to finance, we questioned ourselves – certainly without finding definitive answers – about the consequences of the arrival of Donald Trump at the White House. At that time, it was still too early to outline clear scenarios.
Trump is serious about tariffs, but for the US the real issue is the public finances.
Today, however, it is clear that the United States is serious. The imposed tariffs spare no one: they are, in fact, a hidden tax for American consumers, as they trigger inflation. But the main problem facing the Trump administration and Treasury Secretary Bessent is another: managing public finances. Here are some figures:
- Federal deficit: approximately $2.000 trillion per year (2025 estimate).
- Total public debt: $35.000 trillion, with approximately $2025 trillion maturing in 7.000.
- Total annual public requirement: $9.000 trillion, to be found with certainty.
- GDP US: 29 trillion dollars
It is not so much a question of long-term sustainability – as has happened in other countries in the past – but rather of the concrete difficulty of placing a mass of products on the market. unprecedented debt.
With the current level of interest rates and the risk of new inflationary tensions, the US Treasury could find itself in pay unsustainable interest, especially since the average maturity of debt is shorter than European standards. Added to this is the dollar's devaluation over the past six months, which could continue, eroding the currency's role as a global benchmark and making issuance more expensive, especially at long-term levels.
Tensions with the Fed are worrying: the dollar is at risk
A further element of uncertainty concerns the Federal ReserveIf the new administration were to reduce its independence, turning it into an instrument of government policy, markets would react with strong skepticism, and many investors might reduce their exposure to dollarsThe question everyone is asking is: where might global capital move? It will be interesting to discuss this with international panels, which this time more than ever will be called upon to put away their crystal balls and discuss concrete scenarios.
The European situation and the missing answers
While overseas the challenge is to find resources and manage a colossal debt, in Europe the scenario appears different but no less complex. A real solution is still missing. common strategyIndustrial, energy, and financial responses are fragmented, and individual countries are struggling to coordinate. Let's recall the data:
- EU GDPR: approximately 20 thousand billion euros
- EU public debt: 14 trillion euros
In Europe there would be room to issue debt with a very high rating but it should be a common debt, not a competition between Italy, Germany, or Spain. It's time to look at the Union as the only, and perhaps last, real opportunity. If we fail to seize it, we risk becoming irrelevant. In a global context dominated by the logic of power, the very stability of our national sovereignty would be called into question.
The example of France is emblematicPublic finances appear increasingly fragile, and political stability is uncertain. Yields on two- and five-year government bonds are now higher than those of Italy, and only on the ten-year bond does Paris maintain a slight advantage. Furthermore, approximately 50% of French debt is held by international investors, while in Italy the share is 30%—a figure that makes us relatively more resilient. Of course, in terms of GDP, France still remains slightly better positioned than Italy, but the gap is rapidly closing.
Europe's strength must be cohesion
Europe's strength should be its ability to act as a cohesive bloc, not the sum of 27 divergent policiesFaced with global tensions, the lack of a unified direction risks leaving Europe on the margins of any dialogue. We seem to have realized this, but the European architecture and mediation, and the drama of the need for unanimous voting within the EU, still leave too many matters at the mercy of individual blocs that can no longer be part of this Europe.
The theme of the democracy to come and of the new balances between politics and finance fits into this framework. The credibility of institutions, the ability to govern the energy and technological transition, and the ability to attract international capital will be key factors.
Incidentally: but where are they? rating agenciesStandard & Poor's, Moody's, Fitch. France has an AA- rating. Italy's BBB+: these are four levels of difference that are justified neither by the facts nor by the outlook. President Mattarella already clearly pointed this out at the Ambrosetti conference a year ago, but now it's just not clear.
Focus on Italy
For Italy, one of the main challenges remains the relationship between banks and businessesThe availability of credit, especially for small and medium-sized enterprises, is a necessary condition for supporting growth and innovation.
A redesign of the banking system is more than likely: the next few weeks will tell us which direction it will take. Whatever the outcome of MPS's takeover bid for Mediobanca, it's clear the process won't stop here. Personally, I consider the “biodiversity” of the banking system A value: the emergence of large corporations brings with it opportunities but also risks, because it standardizes supply and reduces the ability to provide credit. It's the classic effect where one plus one doesn't equal two, but one and a half. At the same time, however, champions are needed that can compete on a European scale: finding the balance between size and diversification remains a crucial challenge..
Remaining in Italy, a decisive role in the relationship between banks and businesses – and this would be true even if instead of banks there were private funds or other financing entities – is given by the presence of public guaranteesAnother crucial point is represented by the negotiated resolutions of business crisesTwo distinct aspects, but both capable of influencing the flow of liquidity from savers to the productive system.
Le public guarantees, introduced en masse during the pandemic, are now gradually being reduced. Their cost to the state budget has been high, but it is certainly justified by the benefits achieved in terms of increased credit to businesses. We don't know what the current situation will be after 2026: further tightening is being considered, necessary to return to normal conditions. However, it seems that over time, these guarantees will increasingly favor structured and solid businesses—which theoretically need them less—and less so fragile companies or startups, which would need them more.
Public guarantees to enable banks to support the production system
It should be remembered that thanks to these guarantees banks can use less capital in the finance the production systemAltering this balance can have far-reaching consequences than one might imagine. Lending institutions cannot ignore this and be concerned.
On the corporate crisis front, the number of companies that choose to formally declare themselves in "crisis" or "pre-crisis" is growing, often with the aim of protect yourself from creditorsThe risk, however, is that the system has pushed these protections too far.
A rethink is likely needed to restore a more balanced relationship between indebted companies and creditor banks. If this doesn't happen, especially the smallest and most fragile companies, without guarantees and without a reputation to defend, risk no longer finding any institution willing to grant them credit, due to the banks' legitimate fear that they might resort to “debt-cutting” procedures.
Our country needs to strengthen the dialogue between the banking system and the business communityBanks must continue to be partners in development, not just providers of capital. Businesses, for their part, must present themselves as more solid and transparent, opening up to the capital market, including through innovative instruments and market operations.
The international context, with still high interest rates and tense financial markets, does not make this path easy. However, precisely in scenarios of uncertainty, economies that are able to move with credibility and coherence will be able to gain the trust of investors.
Expectations for Cernobbio
The discussion at the Teha will therefore be an opportunity to focus not only on risks, but also on opportunities. The hope is that, alongside the analyses of the United States and tariffs, a concrete vision for Europe and a new impetus for Italy.
More than ever, markets don't demand abstract forecasts, but credible scenarios. It's up to us to construct them, knowing that finance and politics no longer travel on parallel tracks, but influence each other in real time.
