Marcello Messori, who today is one of the most brilliant Italian economists, between the end of 1998 and the first months of 1999 was the economic adviser for privatizations of Prime Minister Massimo D'Alema. But when the head of the government took sides in favor of the consortium that promoted the takeover bid for Telecom, he took note of it and resigned from his post, in clear disagreement with that operation which brought down the first Italian telephone company, which was by no means a market operation but "a short-term financial speculation" and which unfortunately represented "a watershed for the Italian economy". Messori has never officially spoken of the reasons for his resignation as economic advisor of Palazzo Chigi and his dissent on the Telecom takeover bid. He does it now, after 25 years, on FIRSTonline. Here is his interview.
The death of Roberto Colaninno, who was the symbolic man of the 1999 Telecom takeover bid, has once again brought up the comparison of whether or not the mother of all takeovers is appropriate. Massimo D'Alema, who was Prime Minister at the time and who paved the way for the takeover bid by renouncing veto powers in defense of the national interest, declared to La Stampa the other day that "the takeover bid was a market and that it would have been very unpleasant if the Government had opposed it". But you – in line with the then Director of the Treasury Mario Draghi – were the only one in the Palazzo Chigi staff to disagree and oppose the takeover bid by resigning as economic adviser to the Prime Minister: why?
“I think, as you yourself pointed out in his recollection on FIRSTonline, Roberto Colaninno's activity should be evaluated not only for the Telecom takeover bid and for the negative initiative in Alitalia, but also for his brilliant management of industrial activities such as Piaggio. In any case, the Telecom Opa suffocated the main Italian telecommunications company under a mountain of debt and caused our country to lose a solid presence in the mobile telephony market by sacrificing, with a single move, two prominent and promising operators. Already in my assessment at the end of the 1992s, that takeover bid had two crucial negative implications which were destined to undermine previous attempts to reform Italian economic institutions and to build regulated markets that were both open to innovation and competition and compatible with effective forms of social inclusion. In the first place, the Telecom Opa did not take the form of an industrial market operation but represented short-term financial speculation, based on instruments which had been in vogue in the United States between the end of the seventies and the eighties and which had produced deleterious effects. For the Italian economy, this was tantamount to sacrificing one of the few large companies with innovative technological potential. Secondly, the Telecom Opa sanctioned the failure of the attempts, made in the period 1998 - XNUMX, to liberalize and re-regulate the markets and renew an Italian production structure, marked by pervasive positions of rent - public and private. Those attempts had not established effective interactions between the political-institutional level, economic policy instruments and financial-productive activities. Declaring that it aimed at redesigning the power structures of Italian capitalism, the D'Alema government decided to legitimize the so-called "brave captains" as a potential alternative to the old entrepreneurial families. Since then, it should have been evident that the majority of the supposed "brave captains" were self-styled financiers ready for any adventure that promised easy money with few personal commitments. The most probative confirmation is given by the fact that, in the middle of the first decade of the XNUMXs, most of those "brave captains" were unscrupulous protagonists of the national consortium for the 'defence' of Antonveneta and Bnl, deserving the label of "crafty of the neighborhood"".
Can you tell us exactly how things went about the Opa Telecom within D'Alema's team? Did you submit your criticisms to the Prime Minister? How was the discussion and what did the prime minister reply to the point of leading you to resign?
«For twenty-five years I have refrained from commenting on the internal discussions of the Prime Minister's Office because I believe that those who hold institutional positions, even if temporary and merely advisory, implicitly undertake an obligation of confidentiality. What I can recall, as it already emerged at the end of the XNUMXs, is that I expressed a reasoned dissent with respect to the Telecom operation and its impact on Olivetti for reasons similar to those I have just mentioned. When on the sidelines of a conference on privatization and market regulation, the Prime Minister publicly expressed himself in favor of the operation, I acknowledged that my analyzes had not been convincing and drew the obvious implication, resigning from the role of director for privatizations and financial markets at the Presidency of the Council. In this regard, I would like to be clear at the risk of sounding trivial. I was and remain convinced that, if opinions are offered to a high institutional office, the political choices (in this case, political-economic) of those with government responsibilities must be respected. If the proposed opinions are marked by fundamental differences with respect to the political-economic choices, it should however also be acknowledged without controversy that one's work is useless. In my case, the Telecom Opa followed my critical assessments of inappropriate institutional interference, which had arbitrarily blocked two crucial market initiatives for consolidation between large banking groups (in particular, Unicredit and Comit). In this case, the D'Alema government decided not to send any signal".
In the interview with Print D'Alema acknowledges that "the real problem (of the takeover bid) was the fragility of the consortium (which supported Colaninno) in which there were others who had purely financial interests" such as the Hopa from Brescia led by the buccaneer Chicco Gnutti who, after having won the takeover, he was the first to sell Telecom shares to Tronchetti Provera to the great disappointment of Colaninno himself: is it possible that this aspect did not lead the prime minister to think about it before giving the go-ahead for the takeover bid?
«I am unable to explain why the then Prime Minister decided to legitimize the initiative of Gnutti and his associates. The only aspect, which I feel like reiterating, is that I tried to bring out the critical points of that takeover bid by emphasizing its distortions with respect to acquisition operations in efficient markets. The fact that the ownership structure of Telecom, which emerged from the privatization and pre-existing the takeover bid, was not optimal and did not allow effective management of a robust company did not make a purchase proposal - in itself - desirable that would overturn a large part of the burden of the acquisition on the acquired company and compromise its future dynamics».
But the crucial point was that the takeover bid took place in debt and that the costs of the entire operation were charged to Telecom itself, thus sinking one of the best telephone companies which has never recovered since: She tried to tell D' Alema and is it possible that the premier did not understand that it was precisely on this terrain – the sustainability of the takeover bid and of Telecom – that the national interest was at stake?
“On the factual level, I am sympathetic to most of his considerations. If I may allow myself, it seems to me that your evaluation of the subsequent evolution of Telecom has had convincing empirical confirmation in the events of the last twenty years and more. Furthermore, his last question represents an effective synthesis of what I have tried to argue with my previous analysis. Let me add that, at the turn of the new millennium, the delay accused by the Italian productive apparatus in the adoption of the new Ict technologies would have required massive investments by our main telecommunications company and the diffusion of the positive 'externalities' to medium and small enterprises ', related to these investments. Conversely, by placing an enormous stock of debt on Telecom, the takeover bid precluded the possibility of adequate investments on the frontier of innovation and imposed stringent and distorting organizational constraints. As you have already said, since then “Telecom has never recovered” although, up until a few years before the takeover bid, it had held positions of innovative preeminence in Europe. Although it may seem easy to act as an "ex post prophet of doom", it must be said that the delays Italy experienced today in terms of telecommunications networks were also the poisoned fruit of that takeover bid. In this sense, I first argued that legitimizing the Telecom Opa severely hindered the attempts to modernize the Italian productive apparatus, pursued in the XNUMXs, and led to the legitimization and reproduction of positions of rent which discouraged economic innovations, processes of industrial restructuring and the development of services, the redesign of the welfare state".
During his government, D'Alema always showed himself submissive to the strong powers of Italian finance (from Cuccia's Mediobanca to Geronzi's Banca di Roma) and fiercely opposed to the spearhead of industrial capitalism represented by Fiat which, through Ifil, was present in the Telecom's capital: how much did this logic weigh on the premier's attitude?
«I would formulate a less positive judgment on the role played by Fiat and Ifil in activating innovative processes in the Italian economic system, especially starting from the end of the XNUMXs. Furthermore, I am unable to assess, in a factual manner, the relationship between the D'Alema government and some of the financial powers you mention. However, two factors seem quite clear to me. First: as I have already mentioned, the Prime Minister believed that the redesign of Italian capitalism could be based on a change in the ruling class, brought back to the replacement of the old large families and many public managers with new people (precisely the "brave captains" ). Much could be said with respect to this naive idea, of Proudhonian origin, according to which the turnover of a ruling class can be exhausted in the replacement of people rather than requiring gradual and profound economic-social reorganizations guided by intermediate institutions. Without going into complex problems here that would make us lose the main thread of the reasoning, it is enough to link this option to the second factor. For various reasons linked - in part - to the internal dynamics of Mediobanca and - in part - to the end of a "closed world" in which the main Italian investment bank could operate in a captive environment punctuated by neglected conflicts of interest, towards the At the end of the XNUMXs, Mediobanca itself found itself forced to rethink its role in the Italian financial market. The idea was that, after having acted as tutelary deity of the major – but weak – Italian private capitalists compared to the preponderant public enterprise since the years of the 'economic miracle', at the turn of the new millennium and after the controversial season of privatizations, it would Mediobanca plays a pivotal role between the declining large national companies and the emerging medium-sized companies. From this point of view, there was an objective convergence between the government's orientation and Mediobanca's orientation».
Mediobanca's acceptance of the takeover bid was surprising: in this case, in your opinion, did the desire to collect a rich commission for strategic consultancy and a significant capital gain on the shares in the portfolio prevail or the desire to teach Fiat a lesson?
«I don't know how to answer this question, except by reiterating the considerations just made. Of course, at the end of the XNUMXs, relations between Mediobanca and Fiat were no longer those of previous decades. Furthermore, the above considerations being fair, the main Italian investment bank had an interest in being the protagonist of a takeover bid that would also involve medium-sized entrepreneurs. It should also be noted that, from the point of view of financial engineering, the debt tender offer on Telecom was designed with great technical-financial wisdom. It can therefore be concluded that Mediobanca's contribution to the Telecommunications takeover bid was based on various motivations».
During the gestation of the takeover bid, inexplicable reversals occurred such as the about-face of the then Governor of the Bank of Italy, Antonio Fazio, who promised the CEO of Telecom, Franco Bernabè, to support him but that in the meeting of the telephone company which was to pronounce on the takeover bid he did the opposite: some say that D'Alema's pressure on Via Nazionale had its weight. Is this a plausible interpretation?
“I don't have any specific information about it. It is true that the Bank of Italy's voting choice surprised many observers; but I am unable to make further evaluations. Moreover, on that date, I had already left the Presidency of the Council; and, even if I had stayed there, I would not have had access to such information."
In conclusion and with hindsight, it can be said that without the foolish takeover bid Italy would perhaps still have one of the strongest telephone companies in Europe today without being forced to cede its network to an American fund as is happening with KKR?
«I don't sympathize with those who argue that, once you miss a train, you are left stranded. I don't even sympathize with those who refer to the wisdom of proverbs to argue that "well begun is half done". In a dynamic world, open to innovative changes and attentive to social inclusion, there are always new opportunities to be seized and a goal that seems close at hand can always be missed. And yet, I think that the Telecom takeover bid and the dramatic negative impact that the resulting debt has had on the evolution of the company have been a watershed for the Italian economy. The Telecom takeover bid has, at the very least, delayed the innovative capacity of the Italian productive system».
