Governor Fabio Panetta, speaking at the Assiom Forex congress in Venice, assessed that global trade has shown unexpected resilience to tariff barriers. According to the head of the Bank of Italy, the burden of tariffs imposed by the US administration has fallen mainly on the American economy, not on its partners. Panetta called on Europe to deepen capital market integration and accelerate the adoption of artificial intelligence, warning against a growth model based on low wages.

Ineffectiveness of tariff barriers

World trade is growing despite tariffs, and the costs of protectionism are borne mainly by the United States, not exporters.

Need for digitalization

Italy and the EU must accelerate the implementation of AI and digital technologies to maintain competitiveness and increase productivity.

End of the cheap labor model

Growth based on low wages is inefficient in the face of an aging society; investments in technology are key.

Stability of the banking sector

Italian banks are strong but should more boldly support innovation instead of excessively limiting credit risk.

During the 32nd Assiom Forex congress in Venice, the Governor of the Bank of Italy, Fabio Panetta, presented a comprehensive analysis of the current macroeconomic situation. His speech coincided with a ruling by the US Supreme Court, which declared some tariff schedules illegal. Panetta noted that despite pessimistic forecasts from a year ago, global trade has not collapsed, and companies have been able to adapt to the new reality through market diversification. However, he pointed out that protectionism is a mistake that generates costs primarily for consumers in countries imposing tariffs. In the domestic context, the governor emphasized that the Italian economy has been growing at a rate close to the EU average for five years, which represents a significant change compared to the previous decade. However, he warned that the current model based on low wages and employment growth is unsustainable in the face of the demographic crisis. The solution is to radically increase productivity through investments in human capital and digital technologies. Panetta noted that Italy and Europe cannot miss the revolution brought by artificial intelligence, which has become the main driver of global GDP growth in 2025. The Italian economy, after the debt crisis in 2011, struggled with prolonged stagnation. Structural reforms and the inflow of funds from the EU Recovery Fund after the pandemic have been a key impulse for the current recovery.The governor also referred to monetary policy, announcing that the European Central Bank must maintain flexibility. Risks to inflation are now two-sided: on one hand, they could be fueled by commodity prices, on the other, the euro exchange rate and the condition of financial markets could have a dampening effect. Panetta appealed to commercial banks, despite their solid results, not to show excessive caution in financing innovative enterprises, which are crucial for the continent's technological sovereignty. „L'onere dei dazi finora è ricaduto soprattutto sull'economia statunitense.” (The burden of tariffs has so far fallen mainly on the US economy.) — Fabio Panetta

Mentioned People

  • Fabio Panetta — Governor of the Bank of Italy (Banca d'Italia), previously a member of the ECB Executive Board.
  • Christine Lagarde — President of the European Central Bank.
  • Donald Trump — President of the USA, initiator of trade tariff policies.