Giorgetti, the Habsburg who agrees with the banker

Some accuse the government of treating creditors as if it were in South America, whilst a minister responds by citing Austria-Hungary. Yesterday, during a hearing on the budget before the Budget Committees of the Chamber of Deputies and the Senate, Giancarlo Giorgetti responded to Carlo Messina, CEO of Intesa Sanpaolo, who just a few hours earlier had described one of the most controversial provisions of the budget law as ‘South American’. He did so in his own way: without denying it.

The legislation spreads the Superbonus tax credits – which banks could have used in 2027 – over ten years, thereby postponing the point at which the credit institutions that purchased those credits can recoup them. In Messina, before the committee of inquiry into the banking system, he had branded it as a South American-style approach to managing debt towards creditors, raising the spectre of debt restructuring and default, and had deemed it inconsistent with the Constitution.

Giorgetti began by saying ‘amusing’, and then conceded to the banker that the measure had been described as ‘South American’, adding: ‘and rightly so’. But he recalled the figures. The debt rescheduling concerns 23–24 billion in loans, whilst a Habsburg-style minister took it upon himself to absorb 140 billion in Superbonuses into the state budget: without that burden, he said, the debt-to-GDP ratio would have fallen to 132 per cent. And so, he concluded, “I stand by the Habsburg-style policy of these past four years”. The reference is to the bureaucracy of the Habsburg Empire, synonymous with rigour and sound financial management.

Giorgetti’s response came on the same day as the fiercest clash, that between Messina and Giorgia Meloni. Speaking at the European Political Community summit in Dublin, the Prime Minister had replied that the measures in the budget were not ‘South American’ in nature, and that the government’s decision was one of justice. Later that evening, Palazzo Chigi clarified that Meloni had understood that Messina was referring to the budget as a whole, and not to the provision on the Superbonus, to which, incidentally, some amendments are currently being made.

Ultimately, the banker and the Minister for the Economy agree on one point: that rule is, in fact, South American. The difference is that, for Giorgetti, it is the price of a Superbonus that he did not want. Tonight, S&P’s assessment of Italy’s credit rating will reveal what the markets think.