Giorgetti: 'No 'tears and blood' manoeuvre needed to reduce debt'. Panetta: "In the second quarter GDP estimated at +0.3%". Patuelli: "Reduce taxes on savings".

From the point of view of economic policy choices, the minister sent out a clear message: 'We cannot adopt an industrial policy of rainfall incentives as done by emerging countries' and our economic policy 'will aim to improve system competitiveness, reduce bureaucracy, increase workers' skills, and ensure that the flow of workers is not one-way'. All this 'will make it possible to lay the foundations for a phase of more sustained growth in the economy'.

In Italy, 'growth in the first quarter of this year was also 0.3 per cent, and it would have remained of the same order of magnitude in the second quarter,' Bankitalia Governor Fabio Panetta clarified during his speech at the ABI assembly. According to Panetta, "the expansion of services continues, especially those related to tourism, while the weakness of manufacturing persists. For 2024 as a whole,' the governor recalled, 'Consensus Economics forecasts indicate growth of 0.8 per cent'.

The Italian economy, Panetta continued, is growing 'at a moderate pace' and can count on 'the strengthening of businesses, the solid financial position of households, and the strength of the banks'. According to the Bankitalia governor, these are factors that "allow us to look ahead with confidence, but they should not lead to excessive optimism". "The solidity of the banks today represents an element of strength of our production system," the governor remarked.

Banks, Panetta continued, now have "the task of accompanying the recovery in demand, supporting households and businesses and preventing credit from acting as a brake on consumption and investment". "They can, in this way, contribute to the relaunch of the Italian economy," he stressed. The governor recalled how the contraction in credit to the economy caused by monetary tightening had no disruptive effects, unlike in the past. "This also reflects the robust earnings and capital condition of the banks, to which the regulatory reform initiated after the financial crisis has contributed".

Wage growth fears in Europe about the potential effects of inflation are not justified, according to Bank of Italy Governor Fabio Panetta. "The current increase in wages represents an inevitable recovery of purchasing power, destined to fade as the loss to be recovered is reduced," he said speaking at the ABI assembly. Long gone is the time when Via Nazionale waved the bogeyman of the wage-price spiral. Panetta added that 'the lower costs of intermediate production inputs and the substantial profits accumulated to date allow companies to absorb wage growth without passing it on to final prices'. In his analysis, the Governor added: "the increase in labour costs on the one hand and the fall in energy prices and capital costs on the other will favour an increase in the capital-labour ratio and productivity, also contributing in this way to containing inflationary pressures.

"The reduction in official rates can be continued gradually, accompanying the return of inflation to target, if macroeconomic developments remain in line with the expectations of the ECB Governing Council". Thus Panetta, pointing out that 'if unexpected events threaten to move us off the expected path, in one direction or another, we will have to be ready to adjust our decisions promptly'. According to Panetta, 'we will have to be ready to respond quickly to new shocks that could move us, up or down, from that trajectory'.

The Bank of Italy's lens on cryptocurrencies and the new European regulations (the Micar regulation) that will bring 'order to the market'. As announced by Panetta, the new regulations increase the 'responsibilities of the intermediaries of this market - both the traditional ones and the others'. "They will also have to guarantee the robustness of the technology used from a technical and legal point of view, also in order to counter operations with illicit or criminal purposes," he said at Abi. In particular, they will be required to ensure compliance with anti-money laundering and counter-terrorist financing regulations, as well as the observance of sanctioning measures established at international level'. In order to meet these requirements, intermediaries will have to equip themselves, right from the planning stage of new initiatives, with adequate expertise and effective control functions'. "In the coming days, we will issue a communication to the market on this matter, in order to encourage an application of Micar that contributes to preserving the smooth functioning of the markets and the payments system and to safeguarding the holders of these instruments," announced Panetta.

Italian banks are asking the government to "rethink" the Ace "to help companies strengthen the solidity essential for new investments". So said the association's president, Antonio Patuelli, in the report that opened the association's annual assembly. From Patuelli also a reminder of the importance of a level playing field in order to be able to operate. "There must be full and fair competition between big tech, crypto assets and banks, with identical rules, including tax rules, and equal supervision, in the open society, without technological monopolist overpowering, for a competitive, democratic and sustainable economy, never resigned and inert towards climate change".

In the opinion of the ABI president, 'equal rules are also indispensable in Italy to guarantee equality in the starting points for fair competition, such as for the 'PagoPA' platform, for which a balanced solution has been found'.

Savers in Italy, Patuelli emphasised, suffer 'heavy taxation that often directs them to invest abroad' and which must therefore be reduced. According to Abii's chairman, today 'savers investing in the medium and long term suffer taxation of almost 60% of the gross income produced by banks: add to this the Ires, the 3.5% and local surtaxes, the dry coupon on dividends, the Irap, the Imu and the stamp duty'. Savings invested in banks' liquidity instruments are indispensable for lending, he added.

Measures are needed to foster youth employment and company assets, the Italian Banking Association chairman emphasised. According to Patuelli, "a more patrimonial solid economy in all sectors is fundamental: we call for a rethink of the ACE to encourage companies to strengthen the solidity essential for new investments". "Italy," he added, "must develop new projects to encourage young people's economic and work initiatives, not only for the purchase of their first home, in order to provide young people with more opportunities for skilled work, competitive with those of other European countries".

"The completion of banking unions and capital markets are priorities to be achieved with a 'central design', avoiding the multiplication of regulations, favouring the competitiveness of banks in the EU and prevention in banking crises, with interbank funds that must be preferred to the more costly 'resolutions' and measures such as the 'bail in': savers and workers must always be respected". This was said by the president of Abi. "Penalisations for those who hold public debt must be avoided," he added, pointing out that "among the most ambitious strategic objectives for building a true European Union, which avoids economic competition between Member States, there is the harmonisation of tax systems and rates". "Banks," Patuelli added, "have an absolute need for stability in the many international, European and national regulations that need to be simplified: in 2023 those addressed to banks were several thousand". According to the ABI chairman, moreover, "we are right in claiming that the possible banking union is one based on identical rules of banking, financial and criminal law of the economy, with single texts, 'Codes', reforms that do not cost money that simplify, rationalise and remove disparities in Europe and encourage banking aggregations for the competition of European banks with those of the rest of the world".

The Abi chairman called for 'full and fair competition between big tech, crypto businesses and banks, with identical rules, including tax rules, and equal supervision'. In his address to the association's assembly, the president recalled how "equal rules are also indispensable in Italy to guarantee equality in the starting points for fair competition, such as for the 'PagoPA' platform, for which a balanced solution has been found".