By Fernando Napolitano, CEO of NeWest Corp
As we explain in one of our previous columns on NeWest, the patronizing of Italy has a long tradition. This time it was the turn of Ms Gillian Tett, US editor at large of the Financial Times, who lauds the Italian dolce vita but seems appalled at recent comparisons of Britain to Italy in terms of financial stability. In an interview on Channel 4 News with Krishnan Guru-Murthy, Ms. Gillian Tett stated that the UK has become like Italy in terms of “financial risk and political instability”, yet “sadly without the good food, the sunshine and glamour”. Much is down to the mini-budget of the new UK Prime Minister and her now sacked finance minister, provoking a collapse of the British Pound, a bond market crisis and a threat to UK pension schemes.
Italy also has a new prime minister. Liz Truss’s predecessor is Boris Johnson with his dashed “sunny uplands” hopes for Brexit: an extraordinary self-inflicted wound of the same low intelligence and carelessness as the mini-budget. One of their own members of parliament describes them as Libertarian jihadists. Whereas Giorgia Meloni’s predecessor is Mario Draghi, the “whatever it takes” savior of the Eurozone. While Italian political instability is undeniable, despite a ruinous five-year term of the populist 5 star movement, no damage of Brexit caliber was caused. Italy’s democracy is resilient. As for the financial risk, Italy’s public debt is 159% of GDP. This large amount is manageable thanks to the €5,2 trillion of its citizen’s financial wealth, which is twice the size of the public debt, and the strength of its exports, at 32% of GDP (the UK's is 27%). Italians are leading savers and like to avoid moral hazards. This makes the Italian debt sustainable and attractive to investors. Italy’s yearly debt renewal is on average €350 billion. Furthermore, Italy must implement a number of economic and social reforms if it wants to access the EU Next Generation Fund of € 250 billion. Mr Draghi has led the way, and the incoming government has given all the right signals of continuity.
In 450 AD the Romans left Britannia, which then plunged into an extended dark age. That which survived there of Rome contributes to British law, literature and culture. Fast forward to today, it is Britain that retreats from Europe, to Johnson’s illusory "sunny uplands".
The opinions expressed in this column are those of the author and do not purport to reflect the opinions or views of Newest Corp. or its affiliates.