A Welshman in Milano: An Italian Dilemma

lunedì, settembre 26, 2005

An Italian Dilemma

A sorry tale of intrigue, political shenanigans and power play is nothing new here in Italy. It is what helps keep the interest levels up and the conversations in bars and cafès alive across the country every day.

The latest tale to hit the world media has been brewing for quite some time though. Antonio Fazio, the erstwhile governor of the Bank of Italy since taking over the reins from now President Carlo Azeglio Ciampi back in 1993, has been caught fairly and squarely fiddling with the business dealings of Dutch bank, ABN Amro in their takeover attempt of Banco Antonveneta, together with the father of his daughters fiancé, Gianpiero Fiorani, in favour of national (or is that really personal?) interest. As if being caught “in the act” by means of a wire tap put in place by the police in pursuit of an investigation into personal favouritism shown by Fazio to his “favourites” isn’t enough, the banking miscreant has continued to show his supreme arrogance by refusing to go quietly, closing the door silently behind him,

Of course, there is (as always) more than one way to read the situation. Maybe Fazio is, indeed, merely the unwilling victim of political intrigue and, by refusing to resign, is maintaining the independent position of the Bank of Italy. Or maybe not.

Whatever the reasons might be for Fazio not going quietly, they are scarcely relevant at the moment. Just in the same way that the reasons for the wire tap on his telephone are not relevant to the present situation. What matters right at this instant is to repair some of the damage which has already happened to the credibility of Italy in the world wide business community – which is fairly tenuous at the best of times these days. Perhaps this is where the political shenanigans come into play. We all (probably) know that Italy is having its General Elections next year, to elect what is fairly certain to be a new government. Of course, by saying “new government” I don’t actually mean a New Government. The same players will, undoubtedly, be playing the game – just from slightly different armchairs, wearing different coloured hats. Much as it’s been for the past 50 years, in fact. I always smile when I’m told by people that should know better that Italy has had the most unstable government in, if not the world, then certainly Europe. I smile because that simply is not the case. Whilst the labels on the conference table and the colour of the banners behind the players might have changed many times, the players themselves have remained remarkably static. I would contend that in reality Italy has had the most stable government in all of Europe, if not the world, since the war. The sad result is that the players have been able to manipulate the situation for their own benefit at the expense of the country they are supposedly representing. I daresay there is an excellent reason for Italian politicians being the highest paid elected representatives in Europe, but quite what that reason might be escapes me at the moment. It certainly makes the prospect of becoming a MEP (Member of the European Parliament) look very enticing when the Italian contingent are being paid nearly FOUR times what, for example, the Spanish MEP’s get. Double, in fact, what the German and British MEP’s get as well. A nice little number.

Anyway, I’m wandering off my point yet again now, aren’t I? I did warn you that my mind does tend to wander off at a tangent these days, didn’t I.

Fazio has just returned from a little trip to the USA, where he sat in splendid silence next to the newly returned Minister of Finance, Giulio Tremonti. Newly returned, of course, because the previous incumbent, a nice chap by the name of Domenico Siniscalco resigned his post because of the situation that Fazio was placing him in by misusing his power as head of the Bank of Italy to completely ignore the calls of government and country (except for the Lega Nord, where support is still strong for Fazio) to resign nicely and take his vast fortune and huge pension off to become a wealthy retiree. No chance, said Fazio. Power is a highly addictive drug, seemingly. Especially when you have no responsibility to your country to go along with it. A little like the situation that was enjoyed by Enrico Cuccia when he was the head of Mediobanca – in fact, he managed to remain it’s virtual head long after his actual retirement – quite an achievement, in my opinion – although not necessarily a proud one.

Enrico Cuccia shortly before his death.

So, the table is set for diner. Fazio is slowly being frozen out of the “A” guest list – but is still using his power, which is considerable, to simply ignore everyone else and continue as though his kingdom is still his own to do with as he likes. Strangely, his position really is untouchable by the political world – he can only be removed from his armchair of power by a demand by the directors of the Bank of Italy - 75% of them are required to remove him from office. The fact of the matter remains that Fazio is acting in accordance with his legal position, if not his moral one.

Sadly, I cannot se how this will end other than in tears – for Italy. Fazio will, eventually, go. His position is untenable and I cannot see how the Bank of Italy cannot now act to protect its remaining reputation by removing Fazio from office. Berlusconi will use the situation to create more sympathy for his growing argument against the Euro and Italy’s membership of the EMU. With the run-up to the election already in every politician’s sights, the likelihood of Italian public borrowing coming under rather better control is fading and the mad-cap schemes, such as the Messina Bridge, will flourish . I daresay the Autostrada (still unfinished) to Messina will be opened several more times by various politicians looking for glory and media coverage before the elections next year. It only remains of interest to see if Berlusconi can engineer another opening for himself. A road opening I mean, of course.