Savona (Consob): “Inflation can deform democracy and unleash social violence”

MILAN. There is inflation, the “unfair tax” and the “many-headed hydra”, at the center of the speech that the president of Consob, Paolo Savona, gives in Piazza Affari on the occasion of the annual meeting with the financial market. “The increases in the cost of living have been transmitted to taxation, but not to wages – says Savona – which have shown greater rigidity. Financial wealth continues to register a serious impoverishment of its real value”. Savona launches an alarm that goes beyond the financial consequences of the cost of living: “History teaches that high inflation also creates the conditions for a deformation of democracy and the emergence of forms of social violence, which would damage everyone”.

Getting out of it using public and private investments does not appear to be the solution. “They – argues the President of the Commission – in the current circumstances, even considering the good results of 2022, are insufficient in both sectors”. Instead, “a policy that solicits savings towards investments in productive activities could allow for an exit from the top, ie not at the expense of real growth”. According to the president, fiscal and monetary policies “cannot be used to the extent necessary to cancel the effects of inflation”. Therefore, alternatives are needed, among which “the construction of portfolios whose movable and real estate assets perform a protective function against inflation of household financial programs is still valid, provided that they enjoy the same regulatory treatment, including taxation”. To improve the management of these portfolios, Savona also promotes the use of artificial intelligence, which he prefers to call “human-enhanced”. This and “generative” intelligence have “revealed to be suitable for the purpose of managing savings well, provided that they are regulated by rules that impose their rational use”.

Savona in his speech deems necessary a “reexamination of the institutional architecture within which money and finance must move, to achieve the common goal of using savings aimed at real growth”. The request is to have a “common legal treatment of monetary and financial forms, now unbalanced in favor of the former”. Savona needs a strengthening of the capital market. And he promotes government initiatives which, he says, “go in the right direction”. In this regard, he cites the Fintech law decree just converted by Parliament, and the bill to support the competitiveness of capital” which, he recalls, “provides incentives for companies to resort to the opportunities offered by the market, such as raising the multiple vote, new ways of forming boards of directors and corporate control bodies”. Now, however, it is “urgent to reconsider how to realign charges and regulations, including fiscal ones, between the various forms of investment of savings, remedying distortions that have stratified over time and contrasting the distributive inequity that they cause”.

That said, Savona appears optimistic about the country’s future. “It has never happened that Italy has not been able to face the difficulties, many of which are far more serious than those we are currently experiencing. We don’t see why he can’t do it even in the current difficult international circumstances”, between war and national selfishness. “The country has given its best in every age and in every circumstance”.