Antonio Fazio: Amintore Fanfani
Address by Mr Antonio Fazio, Governor of the Bank of Italy, at the inaugural meeting of the Amintore
Fanfani Foundation, Rome, 9 March 2005.
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Amintore Fanfani was a protagonist of Italian institutional and political life; possessed of a strong
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will, he always acted in the light of an elevated and internally consistent view of society and domestic
and international reality that was rich in historical references and ideals. This breadth of vision was
apparent when one had the opportunity to talk with him on economic and social issues. His action was
directed to achieving concrete results, with the definition of objectives and instruments able to impinge
on reality. His declared aim, sometimes enounced amidst polemics and disagreements as to the
means, was always that of serving the common good.
His shows him to have emerged first as a scholar and teacher of economic history;
cursus honorum
subsequently, as a political leader, member of the Constituent Assembly, government minister and
holder of high positions in State institutions. He was an architect of projects of social reform and
promoter of international peace initiatives.
I have personal memories of Fanfani, as well, since he was one of my professors at Rome University.
His historiographical work traced the thinking that over the centuries investigated the evolution of the
economy and contains reconstructions covering long periods. He showed great ability in setting the
relationships linking the economy, institutions and society within a unitary framework.
His background, the debate on reconstruction, after the enormous material, civil and moral damage
inflicted by the Second World War, and his vision of how the economy should operate, necessarily in
man's interest, led him, especially as a government minister, to foster reforms that influenced the
organization of the State and left their mark on Italy's history.
In the Constituent Assembly Fanfani contributed to the search for agreement among the reforming
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forces - Catholic, leftist and liberal democratic - on a formula that is a synthesis of the fundamental
features of the new State and the centrality of democracy.
The first article of the Constitution states that the Republic is founded on labour, expression of the
dignity of citizens, guarantee of everyone's full participation in organized civil life, the means for all to
exercise popular sovereignty, to the benefit of all.
We have perhaps not yet reflected enough on the right to work; the political sphere and the economy
must contribute to its realization; the former must preside over the latter's autonomous operation.
The right to work in many cases still has to be realized.
The conditions for achieving a satisfactory level of employment vary with the changes in the economic
context, the state of technology, the organization of society, and the relations between economies and
States. The right to employment is realized in the first place through growth and development.
In the 3rd Subcommittee of the Constituent Assembly, Fanfani was the rapporteur for matters
concerning the social control of economic activity. The text, approved after a series of amendments,
affirms the freedom of private initiative, but draws attention to its social function. While recognizing
economic freedom, a proviso is introduced allowing the public authorities to set limits in order to
protect the general interest.
In recent years this principle has been widely debated; some have seen it as conflicting, in a changing
economic reality, with the principle of competition, which in the meantime has become widely
established in the legal order. But it needs to be reaffirmed that, even in the present context, the
relationship between freedom of enterprise and public regulation and control remains valid, albeit to
differing degrees.
In the period of postwar reconstruction Fanfani, coming from the experience of the Great Depression,
operated in a political and economic system characterized by an extensive presence of the State in
the economy. It was certainly not a question of a planned economy; it was a conception of economic
life that, based on social guidelines, lay somewhere between liberalism and statism.
After the catastrophe of the Second World War, state intervention in the economy played an
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essential role, mobilizing the nation's best intellects and with the inefficiency that would later cripple it
still far off.
In the 1930s the public sector accounted for about 15 per cent of the economy in the industrial
nations. The Depression that swept the private sector had a devastating impact, with major political
repercussions, in the absence of the stabilizing effect of a substantial sector not subject to cyclical
swings. In the 1950s the State's share of the economy in all the economically advanced countries was
near 30 per cent. By the 1980s it had reached and in several countries exceeded 50 per cent.
Problems of efficiency and rigidity became increasingly evident.
In the 1950s Amintore Fanfani fought to put the principles of the Constitution into practice and
guarantee economic and social rights and freedoms: the right to work, to housing, to a more equitable
distribution of wealth.
On various fronts he furthered projects to improve the condition of Italy's economy and increase the
use of manpower: reforestation programmes, public works and energy policy.
As Minister of Labour, Fanfani undertook the first public residential construction programme, the
INA-Casa Plan, financed by worker and employer contributions supplemented by State resources and
the intervention of the banking system. In a situation of high unemployment, this programme helped to
create jobs. As Minister of Agriculture, he completed the land reform initiated by Antonio Segni, a
reform of fundamental importance because it significantly affected not only economic but also political
and social relations.
During the 1950s and 1960s the Italian economy grew at remarkably rapid rates. Employment and
labour productivity increased. There was substantial private investment alongside public investment. A
whole set of institutional, financial and foreign policy instruments were created that enabled Italy to
advance by leaps and bounds. The opening of the economy, investment in public works, the
extraordinary programmes for Southern development, incentives for economic activity and the creation
of new categories of banks were all factors that reinforced industry and enhanced competitiveness,
creating a virtuous circle of unbroken expansion.
These were also the years of postwar reorganization in banking, with the creation of new special credit
institutions and the introduction of subsidized credit. Donato Menichella, who headed the Bank of Italy
from 1948 to 1960, ensured monetary and financial stability, thereby creating conditions conducive to
the long period of growth and Italy's integration into the world economy. In this context he successfully
combined a rigorous credit and monetary policy with the funding of rapidly expanding investment. He
contributed decisively to the creation of the Southern Italy Development Fund, which was conceived to
lay the institutional and structural foundations for economic growth.
The Cabinets headed by Fanfani during those years helped to shape new patterns in the relations
between business and labour. The convertibility of the lira was achieved in December 1958. The
electricity industry was nationalized. Lower secondary schooling was made compulsory and
standardized. Projects for the creation of regional governments were launched.
It was above all in his fourth Cabinet, in office in 1962 and 1963, that Fanfani promoted a new policy
which revived reform and initiated an as yet hesitant experimentation with non-mandatory
medium-term economic planning.
Thanks to rapid growth, by the end of the 1960s Italy was approaching full employment and had
become one of the world's leading industrial countries.
The oil crisis of 1974 and the wage explosion of the following years slowed down economic growth
worldwide and in Italy. Rapid inflation required drastic credit restriction.
The balance-of-payments deficit, the devaluation of the lira, and the price-wage spiral, fueled in part by
the wage escalator, further curbed growth and distorted the allocation of income.
In the early 1980s, with Fanfani's fifth Government, the wage escalator agreement was terminated and
then revised as part of a process of disinflation in the framework of a policy of concertation with the
social partners, based on the theoretical contribution of Ezio Tarantelli. This was the premise for a new
approach to economic policy.
His last term as prime minister saw the beginnings of foreign exchange liberalization in connection
with Italy's endorsement of the Single European Act.
Serving three times as President of the Senate, from 1968 to 1973, 1976 to 1982 and 1985 to 1987,
Fanfani stood out for his dedication, rigour and the absolute impartiality with which he fulfilled this
mandate.
In his career as a politician, Fanfani also fought some lost battles, as he himself readily acknowledged.
It is still early for serene reflection on these defeats, on the core issues involved, without the distraction
of the polemics and conflict by which they were marked. What can be underscored is his forthright
advocacy of the independence of political action, which led him to inquire into the relationship between
modernization, ethical principles and the essence of truth.
The bond between Fanfani and Giorgio La Pira, strengthened by their common vision of the values
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of man and their trust in dialogue, by their religious faith and their reference to Thomism and Maritain,
led both to support courageous foreign policy initiatives for détente and peace.
In 1975 La Pira telegraphed this message to Fanfani: "So many memories come to my heart and mind
concerning your legislative and political interventions for a policy of reforms and renewal. But allow me
to recall especially your role as a motor force of world politics for the liberation and social, political and
economic development of the Third World countries and for peaceful coexistence, disarmament and
peace in Europe, in Asia, in every continent."
The international stature Fanfani enjoyed in the different positions in which he represented Italy was
due to his uncommon abilities, to his activity inspired by the ideals of peaceful coexistence, open to
the creation of new opportunities for foreign policy, aimed at constructing relations of cooperation and
solidarity among peoples.
In his travels abroad and in international meetings he worked for the beginning of talks to halt the arms
race, to establish more advanced relations with the Soviet Union, to promote a "thaw" between the
opposing blocs, to develop fruitful relations with the countries of the Mediterranean area.
On assuming the presidency of the United Nations General Assembly in 1965, Fanfani declared that it
was necessary to make every effort to achieve the objective of "general and complete disarmament",
including a treaty that would commit all countries "to cooperate to halt nuclear weapons". In a
statement that is striking today for its relevance, he stressed how important it was that the action of the
United Nations in defence of peace and justice be made effective through concrete agreements, over
and above generic declarations of good will: "Specific pacts and the resolve to realize constructive
agreements will be necessary. Otherwise we will have to admit that we do not intend . . . to make our
Organization something more than a simple international forum, that is to say the engine of peace, the
keeper of law and the guarantor of security for us all."
In Fanfani's conception, social justice, democracy and protection of the environment were both a
premise and an effect of the development of trade, of the spread of technologies, of the drive for
growth.
At a time when we had yet to witness the acceleration of globalization, he foresaw the risks as well as
the opportunities inherent in the nascent phenomenon.
Today, facing the transformations that globalization has brought, we are pondering the ways to govern
it, to create a new international order and guarantee every nation a fair share in the potential benefits.
The free market, fundamental for the efficiency of the economy, needs to be regulated if it is to operate
in the interest of society. It requires rules, controls, the reign of legality and security, the sharing of
principles and values. Not a Manager State but a State that effectively regulates and at the same time
is able to ensure the provision of essential public goods directly or indirectly. These are goods of
collective interest, such as good administration, justice, basic infrastructure and, at global level, goods
of primary interest for humanity: the climate and the preservation of the environment. That a good is a
public good does not necessarily imply that it is supplied by a public entity; what is fundamental is the
use to which it is put, the function it serves.
Very important work has been accomplished in recent years in numerous international fora and
institutions to defend the essential interests of humanity, natural resources, the climate, international
security. Its progress needs to be accelerated.
What makes Amintore Fanfani's work relevant today and prompts us to study its underlying thought is,
above all, the perception of the close, organic links between all the factors of social, economic and
political life at both national and international level.
In view of the complexity and originality of Fanfani's work, the fields to be ploughed in the
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Foundation's research range from economic policy to foreign policy, from technological innovation to
the transformation of markets and the globalization of the economy. Of the heritage he handed down
together with La Pira, we have to rediscover and make actual the concern for
The expectations of poor
the ability to translate lofty visions of the dignity of man and society into the realm of practical
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action.
In the years of Italy's great economic and social transformation a generation of thinkers,
entrepreneurs, labour leaders and statesmen charted the country's course. The drive to come together
and plan with a view to objectives of general interest was present in all the components of society and
politics, even though they clashed fiercely on some basic decisions. The social partners likewise
sensed the connection that the interests of a specific category must have with the general interest; a
union plan for employment was drawn up.
The economic policy choices effectively accelerated the course of developments. Among the
personalities who took part in elaborating those guideline I should like once more to recall Donato
Menichella, who enjoyed relations of mutual collaboration and respect with Fanfani, as did my other
illustrious predecessors who followed him, Guido Carli, Paolo Baffi and Carlo Azeglio Ciampi.
In the climate of rebirth, the emphasis laid on the role of the "public sector" reflected the need to plan,
to have an overview of the evolution of economic and social life in which to insert the action of
private-sector actors in a long-term perspective. It was a question of foreseeing, but also of fostering
expectations and aspirations, the will to advance, to risk, to invest in the future, of giving young people
a different future from the experience of those who had been young in the early part of the century.
The eminent statesman's sense of service drew sustenance from the force of his personality.
Fundamental among his qualities was his ability to act on the basis of an organic, far-sighted vision
and rigorous study of the problems, to grasp the course of history.
The endowment of programmes and institutional instruments, the possibility of employing unutilized
capacities, the start made at forging international links prepared, in the 1950s, the great burst of
economic growth. Confidence, a desire to test oneself and to improve, and expectations of a different
future were the major driving forces.
The times are different now, but the ability to plan ahead and an organic vision are fundamental
components of our action, the basis of shared choices, a precondition for carrying out specific
initiatives.
In these absolutely different conditions, we must rediscover the élan of those times.