Panetta (Bank of Italy) approaches rate cut: “Consensus emerges”

MILAN – The governor of the Bank of Italy, Fabio Panetta, once again pushes the button for a return from the monetary policy tightening phase, with the aim of “regaining price stability” – or bringing down inflation – “without unnecessary damage to the real economy” or leading to a recession due to excessive rigidity.

Panetta, who spoke at the celebration of the 150th anniversary of the birth of Luigi Einaudi in the presence of the Head of State, Sergio Mattarellanotes that “inflation is falling rapidly” and is approaching the 2% target “making a rate cut possible”, and “is going in this direction the consensus that is emerging especially in recent weeks, within the ECB’s governing council.”

On public accounts, Panetta takes up the thread of many of the speeches Mario Draghi on good and bad debt and explains that “we will be able to free ourselves from the burden of debt only by acting at the same time on the growth front. In outlining the path to follow it is useful to do another Einaudi’s teaching and distinguish useful public spending from unproductive spending. In current terms, it could be said that he considered it essential to improve the quality of the public budget, reorienting its composition in order to raise the potential development of the economy”.