People queue for food in a street in Italy after stockpiling left many supermarket shelves bare
After the lockdowns in response to the coronavirus pandemic spread across Europe this March, bankers in Italy watched with rising anger and frustration as other states announced massive guarantee programmes for new loans.
German finance minister Olaf Scholz called his stimulus package to protect businesses – including an unlimited amount of bank-channelled loans from state development bank KfW – a bazooka. One senior Italian bank executive complained to Euromoney at the end of March that Italy’s programme was, by comparison, an air rifle.
In normal times it would be more understandable for the European Commission and Scholz’s Italian counterpart, Roberto Gualtieri, to worry about Italy incurring even more debt. But, in this extraordinary period, Italy’s caution only emphasized its risk of economic collapse.
“The Italian government needs a mental revolution to progress,” says the Italian banker.
In fact, Italian businesses need more support than those in northern Europe, and not just because its economy has already been ravaged by years of European Union-imposed austerity.
