Fabio Panetta, Governor of the Bank of Italy, in a strong speech at the Assiom Forex congress in Venice, assessed that Donald Trump's trade war has not halted global trade but is ricocheting back to hit the United States itself. While the global economy shows unexpected resilience, Panetta warns of progressing market fragmentation and appeals to Europe to urgently invest in artificial intelligence and integrate capital markets to avoid marginalization.

Failure of US tariff policy

Global trade has not slowed down despite tariffs imposed by Trump; costs are mainly borne by American consumers and companies.

Call for investments in AI

Italy and Europe must accelerate the implementation of digital technologies to not lose ground to the USA and China.

Stability of Italian banks

The banking sector remains strong, but excessive caution in lending could hinder innovative entrepreneurship.

Criticism of judicial reform

Elly Schlein questions the purpose of constitutional changes, claiming they serve to protect power, not citizens.

During the 32nd Assiom Forex congress in Venice, the Governor of the Bank of Italy, Fabio Panetta, presented an in-depth analysis of the current geopolitical situation and its impact on financial markets. According to the head of the Italian central bank, the protectionist tariff policy of the US administration has not achieved its intended goal of drastically slowing globalization. Panetta noted that international trade has not shrunk but has changed its routes, and the highest price for the imposed tariffs is currently being paid by the American economy. At the same time, he emphasized that companies from other countries, including China, have adapted to the new reality by lowering prices and seeking alternative sales markets. In 2024, trade relations between the USA and the European Union entered a phase of the greatest tension in decades, forcing central banks to revise forecasts regarding the stability of supply chains. The governor drew attention to the need to build a new multilateralism, warning that Europe cannot remain passive in the face of great power rivalry. According to Panetta, a key element of the Old Continent's defensive strategy should be the rapid adaptation of artificial intelligence (AI) and the completion of the capital markets union. Panetta also pointed to the solid condition of the Italian banking sector, but appealed to financial institutions not to let their risk management turn into excessive caution that could stifle innovative entrepreneurial projects. Regarding monetary policy, he declared flexibility on interest rates, monitoring inflationary risks stemming from commodity markets. „L'onere dei dazi finora è ricaduto soprattutto sull'economia statunitense.” (The burden of tariffs so far has fallen mainly on the US economy.) — Fabio Panetta Regarding Italy's internal situation, Panetta noted that although the country has shown some resilience in recent years, its growth remains below the EU average, and the model based on low wages and extensive employment growth is unsustainable in the long run due to unfavorable demographic trends. He advocates shifting the focus to increasing labor productivity through digitalization and investments in human capital. Simultaneously, on the Italian political scene, the leader of the opposition Democratic Party, Elly Schlein, sharply criticized the government's judicial reform, accusing it of limiting judicial independence and lacking real impact on speeding up court procedures for citizens. 0.7% — was Italy's GDP growth last year GDP growth in selected periods: Średnia 2010-2019: 0.2, 2023: 0.7, 2024: 0.8, 2025: 0.7

Mentioned People

  • Fabio Panetta — Governor of the Bank of Italy (Bankitalia), former member of the ECB Executive Board.
  • Elly Schlein — Leader of the Italian Democratic Party, critic of the Meloni government's reforms.