I understood Italy when I was asked by Paolo Fresco, the Vice Chairman of General Electric and Alberto Cerrutti, its M&A tycoon, to assist them in their successful acquisition of one of the largest companies of the country, Nuovo Pignone, with strong connections to Russia’s Gazprom. It was a saga. The executives of ENI, the public energy holding, quickly nicknamed me Monsieur Poirot, because of the complicated need to create a “maggioranza Italiana” of Italian banks. I learned Italian on the spot and this one-year transaction eventually happened. It was implying the communist mayor of Florence, the Cardinal Archbishop who celebrated Christmas mass at the factory. It is still the largest and most complex European acquisition of General Electric.
I also traveled through Italy to present the European SME financing to tens of financial institutions. It was an encounter with those vibrant parts of Italy that are not visible in Rome or Milan that my chief of staff, Elena Rotondi, opened to me.
It is a unique country, whose European influence is an impenetrable network of senior officials that completely covers the financial services regulators and the Central Bank. It ensures that no sanction will ever be taken against Italian financial institutions and Italy will never have to implement the indispensable reforms.
Italy is today the biggest threat to the stability of the Eurozone, and therefore represents a systemic risk for Europe and the world. What is extremely worrying, is that the various Italian governments, and especially Silvio Berlusconi, have denied the problem and refused to act on it. Today, with 130% debt to GDP and € 2.1 trillion of debt, Italy is potentially a bomb.