Greater timeliness in monetary policy decisions, attention also to fiscal policy and better clarity in communication.
Don't spare criticism Antonio Patuelli, president of Abi, towards the work of European Central Bank and its president, Christine Lagarde.
During the awards ceremony organized by Banca Finanza, Patuelli regrets the past, when the Bank of Italy was the one who guided the reins of monetary policy and was responsible for the discount rate.
Patuelli: the ECB had the elements to start raising rates sooner
First of all, Patulli points the finger at the monetary policy chosen by the Council of the ECB: “He could have started to raise rates of interest even before July 2022, given that inflation was already evident”. Patuelli also invited reflection on the fact that "despite the rise in interest rates, and the lower liquidity (with the ECB not buying government bonds as before) inflation has not collapsed".
Leveraging interest rates alone is not enough, we also need a fiscal policy
According to the president of ABI, monetary policy must be accompanied by a fiscal policy also to avoid a slowdown in the economy or even a recession. “Vary in my opinion just the rates it is not enough: it is necessary to limit public spending and set a ceiling on the public debt, which has been growing since 67. By imposing a debt ceiling, we would immediately have positive results”. Certainly, however, according to Patuelli exclusively monetarist policies cannot be the panacea. Among other things, he recalled, it is necessary to take into account the fact that the Italian public debt is very high, but those of France and Germany have also grown, so "monetarism is not, I believe, the right choice".
The ECB conferences create turbulence on the markets
The Banca d'Italia style was better, says Patuelli, when “It communicated changes and stops in three lines. Today, however, I suffer at every ECB press conference because things are said that complicate the future. In the end we talk about successive maneuvers or no maneuvers, but we should stay with the fundamentals ”, he explained. Of course, he was keen to clarify, “I don't dream of returning to Bank of Italy which would mean detaching from Europe, the worst of mistakes. The ECB, however, avoid conferences, or rather to disseminate hypotheses of decisions that only create turbulence on the markets!”.
The jab also went to Mario Draghi, previous president of the ECB, who however Patuelli said he regrets. "I have to say, however, that even if Draghi had maintained the Bank of Italy style of the three lines, he would have started a practice that would have continued".
