Flipside: Cult of the Italian strongman lives on

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More than 2,000 years after Julius Caesar's death, his followers still place flowers on an undistinguished earthy mound in the historic Roman Forum, presumed to be the dictator's grave. Such is the reverence for strong leaders in Italy that the occasional barbaric act - tossing Christians to lions, killing the children and raping the wives of enemies - can be overlooked in reaching judgement on their worthiness. "Had you rather Caesar were living and die all slaves, than that Caesar were dead, to live all free men?" was how Brutus posed the question of the great man's murder to the general populace in Shakespeare's play.

Their preference, as Brutus and his co-conspirators came to discover, was for dictators and slavery.

Less excessive than Caesar but as significant in his own field is Enrico Cuccia, the colossus of Italian banking, who died last month, aged 92, after a lifetime exerting control and brokering deals among the country's major companies. From his perch as head of Mediobanca he organized the marriage of Pirelli and Dunlop and the rescue of Fiat in 1972 by selling a 10% stake to the Libyans.

Leopoldi Pirelli said of him: "What Cuccia wants, God wants." Former prime minister Giulio Andreotti once remarked: "At times Cuccia was more important than the government."

With Cuccia's passing there is a temptation to conclude that the era of the strong-man in Italian business and politics is over. Some have even connected Cuccia's death and the closure of the Istituto per la Ricostruzione Industriale (Iri), the state holding company that controlled Italian industry during the last century: with Cuccia and Iri reduced to the same bouquet-propping role as Caesar, enter a new age of Italian capitalism free of state interference and back-room influence-peddling.

Are they crazy? Did Shakespeare expend all that effort to understand the tides in the affairs of men only to have the rules overturned by the death of an elderly banker and the demise of a dirigiste department - ordered ironically by that bastion of free enterprise, transparency and democracy, the EU. Roman florists fear not. Where these came from there are plenty more and, anyway, the Italian electorate is in no danger of voting for a democracy-touting, consumer rights activist who would be considered a wimp and probably lacking in ardor in between the sheets.

Note the improving fortunes of Silvio Berlusconi, at the helm of opposition party Forza Italia, who once looked as if he was out of Italian politics but could now win the next election. "Il Cavaliere", as he is known, has survived corruption charges and repeated challenges to his leadership. His economic agenda is confused and his reputation far from squeaky clean but his image as a fighter and tough-guy strikes a chord in Italian hearts.

As it is with politics so it is with banking.

The guys at the top are often politically appointed and their success or failure depends as much on getting the politics right as it does on balancing assets and liabilities.

Privatization has done only a limited amount to change this and some banks remain beholden to government foundations originally created as a first shot at reducing state control.

Take the case of the world's oldest bank Monte dei Paschi di Siena, founded in 1472, and currently the subject of a tussle between the treasury and the mayor of the Tuscan city of Siena, Pierluigi Piccini. Piccini worked for the bank before becoming mayor 10 years ago and is officially on a leave of absence, which maybe explains his fondness for the institution. More critical, however, are the revenues the bank produces for the city which will be reduced if the foundation is forced to sell down its holding further (it has already parted with 28%) as central government law requires. The drama is being played out in the form of an argument over the foundation's board members. A treasury appointed chairman, Giovanni Grottanelli de Santi, has already resigned in frustration and his successor's progress will be keenly watched.

Everywhere one looks in Italian banking there are political intrigue and clever politicians.

There is management infighting at two of the big three banking groups Intesa and Sanpaolo IMI, according to the Italian rumour mill, and talk of their imminent merger. To the great disappointment of these lovers of theatre, central bank governor Antonio Fazio used the occasion of last month's Italian Banking Association meeting to emphasize the need for mergers among Italy's smaller banks. Most countrymen interpreted this as meaning that an Intesa/Sanpaolo deal was not in the stars.

Not much happens in Italian banking without the say-so of the governor, as Unicredito Italiano and Sanpaolo IMI discovered the hard way when they made unsolicited bids for BCI and Banca di Roma only to be declared out of order. Unicredito Italiano's chief executive, Alessandro Profumo, a former McKinsey consultant, who knows how to make shareholder presentations and the meaning of return on equity, and so is effectively over-qualified for his job, can be excused this misunderstanding. Profumo is often held up as an example of the exception that proves the rule in Italian banking. But Sanpaolo's Rainer Masera, a former minister who used to work at the Bank of Italy, should have known better.

Roman soothsayers are trying to decipher the bank merger possibilities should Fazio be lured away to join Berlusconi in his election fight. A new governor might not frown on the joining of northern giants. The scene would also change greatly if Intesa's chairman and master strategist Giovanni Bazoli became a candidate for the centre left.

Bazoli was able to achieve his goals even when they conflicted with those of the late Cuccia.

He persuaded Mediobanca to back his acquisition of BCI, successfully turned it into a corporate and investment bank and a potential rival to Mediobanca, and then freed it from Mediobanca by selling BCI's 8% stake in it. Then he appointed Cuccia opponent Lino Benassi to run BCI.

Bazoli seems to be unaware of the protestations of some analysts that a new era in Italian capitalism is upon us. Cuccia and Caesar may be dead but the Italian strongman is full of life. It will take more than Brutus' dagger to snuff him out.