Carlo Azeglio Ciampi
Writings in the Nuova Antologia
Speech by Deputy Governor of the Bank of Italy
Luigi Federico Signorini
Introduction
1. On the day Carlo Azeglio Ciampi was born in Livorno, on 9 December 1920, the Italian
daily Corriere della Sera featured, among other things, a political and institutional
maelstrom and two important economic questions. The former was related to the
Government's 'resolution to apply the Treaty of Rapallo'. Under the treaty, the city of
Fiume (hotly contested by Italy and Yugoslavia in the wave of nationalist sentiment that
followed the end of the European war and the dissolution of the Hapsburg Empire) was
to become an independent state. Gabriele d'Annunzio's self-proclaimed Italian Regency
of Carnaro was opposed to this solution, and called instead for Fiume's annexation by
Italy. A few weeks later, the 'Bloody Christmas' clashes signalled the end of the Regency
under the guns of the Italian navy and army, sent by the last Giolitti government. As for
the two economic questions, one regarded the regulated price of bread: this had been
set during the war but by 1920 had become unrealistic owing to wartime inflation and
had to be heavily subsidized, creating a gaping hole in the public accounts. The abolition
of the subsidy was entrusted by Giolitti to Marcello Soleri, Under Secretary for Food
Provisioning and Consumption, and was approved in February 1921. Although it met
with strong opposition at the time from several political parties (as reported in the
Corriere), the measure made a substantial contribution to rebalancing the budget. The
second question was the subject of a second-page article written by Luigi Luzzatti,
entitled 'Nuova carta moneta?' ('New paper money?'), which allowed the newspaper to
highlight the 'deep concern about an increase in money in circulation which is having
noticeable effects on prices and exchange rates'. 'If prices and exchange rates go up,
the money press is to blame', observed the columnist.
2. Back then these issues recurred so frequently that perhaps traces could be found on
any given date. I quote them nevertheless, because it is still somewhat amusing to
think that if one picks up the Corriere published on the day Ciampi was born, one finds
references to the three lodestars (if I may call them that) that guided his personal,
professional and institutional life, from the outset of his career to the highest offices
he held: the stability of the currency, balanced public finances, the ideal of a united
Europe. The latter, however, should not be read in opposition to love for the smaller,
national homelands; rather, Europe was to be founded on a healthy sense of
patriotism - to stand as a bastion against the fratricidal destruction seen repeatedly in
the course of history. In the two volumes of his contributions to the journal Nuova
Antologia, all three stars are very clearly visible.
Europe
3. I shall begin with the third star, the European ideal, to which Ciampi's writings return
again and again. This aspect, perhaps, strikes me more than anything else.
4. In 1966, recalling his time spent in Scanno in Abruzzo, from 1943 to 1944, while waiting
to try and get beyond the front of the Italian Co-Belligerent forces (the regular army,
which after the 1943 armistice started fighting alongside the Allied forces), Ciampi
wrote: 'During that time, we became convinced - and it is a conviction that still drives
and sustains us - that the European Union must be created for reasons that go far
beyond economic considerations. We must remain fully aware of the tragedies that can
be triggered by the rekindling of nationalism, creating a risk of moral and political
decline that has certainly not diminished in our time, as witnessed by the tragedy of the
former Yugoslavia. Europe must either move towards a Union solidly based on common
institutions, or risk going backwards. We must not forget the dramas we have lived
through, to spare our children and our grandchildren a similar fate.'1
5. For the success of the European project, however, the knowledge that 'for the
civilization to which we belong, [political union is] the only way to avoid losing the
thread that was broken by two world wars and retied by those with the vision to
imagine Europe as a community'2 is only a necessary, not a sufficient condition. What is
also needed is 'the creation of institutions that are appropriate for the new size of the
European Union, which allow us to face up to our responsibilities towards European
citizens'.3
6. Allow me to underline the previous sentence, which is taken from a speech in 2002,
when Ciampi was called on to give the laudatio at the awarding of the International
Charlemagne Prize of Aachen to 'the euro - our money'. These words are still pertinent
today. Compared to one generation ago, today's Europe is indeed 'a new size', not only
because the number of member countries has increased, but also - and really above all
I would say - because the areas in which we have pooled sovereignty have increased
greatly. In the last twenty years there has been a formidable transfer of sovereignty in
the economic, monetary and financial fields. Ciampi was one of its driving forces. The
European institutions have adjusted in part, at times making unexpected progress, at
others falling behind. Today, while the debate on the completion of economic union
continues, other questions have returned to the fore, and are once again among those
closest to the heart of sovereignty: security, border controls. These are challenging
areas which are of intrinsic common interest and are difficult to deal with at a national
level. But they cannot be properly managed together without 'appropriate institutions'.
7. We can draw some lessons from the experience of Europe's economic institutions. The
incompleteness of Economic and Monetary Union, as we know, returned dramatically
to the fore, propelled first by the financial crisis and then by the sovereign debt crisis.
The year 2012 saw the publication of the so-called 'Four Presidents' Report'4 which
proposed taking, in the course of a decade, concrete steps towards banking and
budgetary union, and supplementing or replacing national intervention tools with
similar supranational instruments. The Report also suggested accompanying this
gradual transfer of sovereignty with a strengthening of the democratic legitimization of
common institutions.
8. Most of the proposals in the Report have been included in later and more detailed
documents and certainly not all of them have remained a dead letter. Indeed, the steps
taken over the last few years have been extraordinary in some respects: at a time when
the economic situation has been particularly challenging, the EU and the euro area's
institutional and regulatory framework has been broadly redesigned, filling glaring gaps.
And yet the progress made has been uneven. Notably, while restrictions were rapidly
placed on the use of national levers, the introduction and complete pooling of
supranational instruments have lagged behind.
9. This is not the place to mull over issues that Governor Visco and the rest of us have
dealt with on many occasions. Namely, the incompleteness of the banking union, the
fact that the capital markets union is still in its infancy, and the marked asymmetry - the
'lameness', as Ciampi would have called it5 - of an institutional architecture that,
despite having a single monetary policy, continues to have a fiscal policy that remains
largely fragmented along national lines, albeit in the context of an increasingly intricate
regulatory network. Instead I should like to make a more general comment, to which
6
many other observations can be directly or indirectly linked.
10. Though differing in many ways from the traditional sovereign state, the European
Union has a framework whose legislative and judicial branches resemble those of
many normal constitutional democracies. Nowadays the Union has a Parliament
which, according to the Treaties, has a status, make-up and powers comparable to
those of a national parliament; it has courts of justice that ensure the uniform
application of European law in very conventional ways. In contrast, executive power
works in a rather peculiar way. There are two institutions that share power of political
direction, namely the Council and the Commission, with a division of roles that I
believe to be unique, and with different forms and sources of legitimacy. Both,7
moreover, perform non-governmental functions: the Council shares the legislative
role with the Parliament, while the Commission has some tasks typically associated
with independent authorities, which are hard to reconcile with its political role - a
combination which is a perennial source of controversy.
11. The distinctive nature of the Union's institutional framework is not without
consequences. The absence of a single governing body results in a lack of certain tools
typically used by the executive branch, which greatly hampers the discretionary action
of the European 'government'. The Union's economic governance is therefore
essentially based on defining the rules and checking that national governments comply
with them. It is this imbalance between rules and discretionary governance, far more
than the oft-discussed lack of democratic representativeness, which is the most unusual
feature of the European constitutional framework. This situation is not accidental: it
arises from the reluctance of member states to confer what they see as excessive
powers on a central government. Yet what is sometimes forgotten is that, since a
considerable portion of sovereignty has already been pooled at European level in
various sectors (and for good reason), these arrangements create a paradox: with little
discretionary power at European level and little at national level, the entire system
appears inflexible.
12. A far-sighted view would be required to solve this paradox. I do not know if this is
possible today; certainly, it will not be unless a climate of trust, which seems to have
been lacking recently, is rebuilt between countries and between European citizens and
institutions. In his 'Concluding Remarks' at the annual meeting of shareholders in 1988
Ciampi recalled the progress made in creating a 'genuine, united Community that can
stand alongside the United States and Japan as a point of reference in the world
economy', and concluded, 'The major disputes about minor issues appear to have
subsided: though the road ahead is still arduous, the way is now clear for progress
towards the completion of economic union, which will prepare the ground for political
union'. It is to be hoped that the current European debate also dismisses the 'minor
issues' and regains a sense of direction that will allow us - to quote Mario Draghi, one
of Ciampi's successors at the Bank of Italy - to 'avoid remaining prisoners of incomplete
projects'.8 It is not, or at least it is not only a question of an ideal vision: the
incompleteness of the project can seriously undermine its actual effectiveness and
social acceptability. We see examples of this every day.
13. Ciampi belonged to that generation and that school of thought which, in the spirit of
Jean Monnet, saw every step towards building Europe as the forerunner of the next
inevitable steps. In 1998, on the eve of the birth of the euro, he said he was convinced
that 'when eleven countries begin to jointly manage this common currency, they will
realize [...] that other things will need to be jointly managed too [...] This is the slope
along which the single currency will roll [...] a slope which, with the same inexorable
strength as gravity, will force the main policy domains, and not just the domain of
economic policy, into a framework of cooperation'. And yet while he described the euro
as 'an example of imagination in power', and underlined that 'putting the cart of the
single currency in front of the horse of political union had been a unique historical
initiative', Ciampi also warned us about the need for unflagging commitment: 'We now
need even more imagination and creativity to blend elements of sovereignty and
supranationality, States and federation, and unity and diversity into an efficient
institutional framework'.9
Money
14. 'The independence of the European Central Bank and its primary objective of
maintaining price stability are solemnly enshrined in the Maastricht Treaty: there can be
no divergences, no doubts of interpretation.'10 But the autonomy of central banks, as
the articles printed in the Corriere della Sera on 9 December 1920 remind us, is not part
of the natural condition of mankind; quite the opposite.
15. How much power or discretion the Sovereign can exert in printing money is an age-old
question. In the West, the idea that sovereigns could not exercise this prerogative in a
discretionary manner without endangering the well-being of their subjects or even their
own, dates at least as far back as Nicole Oresme and his Treatise on the origin, nature,
law, and alterations of money, written six and a half centuries ago. But the task of
translating these principles into institutional rules that would sanction the separation of
the State Treasury and the 'money press' took a long time and varied from country to
country. In Italy the matter was settled between 1981 and 1993 with Ciampi the
undisputed protagonist of that process.
16. In one of the essays in the Nuova Antologia, Ciampi recalls the first, crucial step in this
direction in a conversation with Giovanni Spadolini, who on 15 June 1981 - as the
newly-appointed President of the Council of Ministers - asked the governor to 'describe
the economic situation to him as clearly as possible'. 'This I did' - Ciampi recalls - 'by
largely repeating what I had said two weeks earlier on 30 May at the Bank of Italy's
annual meeting of shareholders, in the governor's traditional 'Concluding Remarks'. The
situation was complicated. Driven by the second oil shock, annual inflation had risen
above 20 per cent [...] To defeat it, I had called for a series of structural and behavioural
changes, a kind of monetary constitution, indicating three pillars'. The first two pillars
were incomes policies and new rules and strict constraints on public expenditure; the
third was the 'full autonomy of the Bank of Italy to prevent any interference in the
creation of money by government expenditure centres'.11
17. When he outlined his government programme on 7 July 1981, Spadolini said nothing
about the third pillar, but he 'de facto approved the new arrangements for financial
transactions between the Treasury and the Bank of Italy, which Andreatta, already
Treasury Minister in the previous government, had agreed with me in April 1981 and
which took effect in July that same year. This ended the Bank of Italy's obligation to
purchase Treasury bills not sold at auctions.'12
18. That 'divorce' marked the beginning of a process which would ultimately lead to the
Governor of the Bank of Italy being made responsible for setting official interest rates in
1992 and to the end of the Treasury's permission to borrow up to 14 per cent of its
budgetary expenses from the central bank in 1993, for a token interest rate. 'In this
way', Ciampi again recalls, 'the independence of the Bank of Italy was given full
recognition'.13
19. To those who believed in those days that excessive attention was being paid to price
stability, in his 'Concluding Remarks' in 1981 Ciampi responded that in previous years
high inflation had 'not only caused vast and unintended transfers of wealth and created
the forms of inefficiency that are due to unpredictable and volatile relative prices' but
had 'also changed the very essence of the currency by largely stripping it of its function
as a store of value and leaving it only a humble role as a unit of account and medium of
exchange. A complex trading economy cannot function without a unit of value that is
reliable both in the present and with regard to the future.'14
20. The return to monetary stability was a success. After reaching 21 per cent in 1980,
inflation fell to 6 per cent in 1986 and to 3 per cent in the mid-1990s. However, while
the monetary 'pillar' was built without delay, the other two, incomes policies and public
expenditure, were only partially completed. This, wrote Ciampi, 'cost the country
dearly. It slowed economic development; it weakened the currency.'15
21. No longer Governor, it was again Ciampi acting as Minister of the Treasury in Prodi's
government, who steered Italy's participation in the single currency from its
inception. The end of the long 'return to stability', which began in 1981 and was
pursued with determination in subsequent years, coincided symbolically with the
completion of a fundamental step in European integration. To Ciampi's mind the two
elements were indissolubly linked: 'If [...] we look again at the patterns of events in
our economy in the 1980s and 1990s we can see a defining dual motif: the return to
stability and the creation of Europe. Stability, which until the mid-1960s our country
had proved capable of delivering together with strong development; Europe, which
had been uppermost in our hearts and minds since the end of the Second World
War'.16
22. It may be worth recalling here as an aside a perhaps little-known fact, which Ciampi
alludes to in another essay: 'As Minister of the Treasury, I wanted the image of Castel
del Monte [on the one cent euro coin] as a tribute to Frederick II, an Emperor who was
at once German and Roman, the embodiment of a supranational ideal.'17
The public finances
23. To talk about the third of Ciampi's lodestars, public finance, we need to return to the
three pillars of stability, more specifically to the non-monetary ones. In recalling, years
later, the events of the Spadolini administration, Ciampi underlined their importance:
'the government programme that the Prime Minister [...] presented to Parliament
indicated that the reining in of public spending, together with the cost of labour, would
be a fundamental part of the fight against inflation'. He said that 'regrettably, in
finalizing the budget, its contents were first affected by the conflicts that emerged
within the Government and among the economic Ministers, and then by the
modifications made during the Parliamentary debates which, in large part, tended
towards easing the budget', adding 'the gap between the budget's results and its
objectives was particularly wide. The deficit-to-GDP ratio, which had already increased
from 9.3 per cent in 1980 to 10.7 per cent in 1981, jumped to over 13 per cent in 1982'.
Lastly, he recalled that 'at the end of May 1982 [...] I deemed it necessary to make a
public comment on the gap between the acknowledgment of the problems and the
inadequacy of the proposed solutions, expressing with great clarity the risks and
concerns deriving therefrom'.18
24. In his writings Ciampi expressed his constant concern that 'growth [could be]
disrupted by fiscal disorder'.19 Nearly 15 years later, at the end of 1995, speaking from
a medium-term perspective he complained again about 'the prolonged lack of
consistency between the consolidation and convergence objectives set out by
Parliament and the Government in connection with the process of European
integration, and the manner in which the public finances and wage negotiations were
actually managed'.20
25. Shortly afterwards, however, it fell upon Ciampi to reorganize the accounts, a requisite
for Italy's entry into the European Monetary Union. The success of this endeavour
hinged upon three characteristics which marked Ciampi's entire career: his insistence
on an accurate diagnosis of problems; his urging of clear objectives; and his awareness
of his personal responsibilities, an indispensable precondition for mobilizing the
energies of all.
26. In his speech before the Chamber of Deputies where he presented the Economic and
Financial Document (EFD) for the three years 1997-99, Ciampi clearly described the
diagnosis, objectives, and responsibilities. The diagnosis is clear: 'the new Government
was forced to acknowledge the changes that had taken place [...] in the macroeconomic
context. In addition, a thorough analysis of the public accounts demonstrated [...] a
worsening with respect to the projections'. The objective, however, remains
unequivocal: 'Italy's participation as of 1 January 1999 in the third phase of the
Economic and Monetary Union'. Lastly, on responsibilities, he emphatically and clearly
stated that the EFD outlined the future of Italy's economy and public finances and that
'this future is still in our hands. Nothing is inevitable or predetermined, there is no room
for fatalism'.21 The importance given to technical diagnosis aligns Ciampi with the
tradition of the Bank of Italy, where he himself once said he received his 'Masters in
Economics'.22 In an essay dedicated to Einaudi, Ciampi recalled the origins of that
tradition in the important analytical work carried out by Menichella and the Bank, which
contributed to the success of the 1947 stabilization measures.
18
'1981: emergenza economica e nuove vie per il risanamento', in Scritti nella Nuova Antologia, vol. 1,
pp. 69-73.
19
'Operare Europa, pensare Europa, sognare Europa', in Scritti nella Nuova Antologia, vol. 1, p. 167.
20
'1981: emergenza economica e nuove vie per il risanamento', in Scritti nella Nuova Antologia, vol. 1,
p. 68.
21
'Quale futuro per l'economia e per la finanza pubblica', in Scritti nella Nuova Antologia, vol. 1,
pp. 79-83.
22
'I ministri del Tesoro raccontano', in Scritti nella Nuova Antologia, vol. 2, p. 214.
27. He had the chance to underline concisely and effectively the importance of an impartial
diagnosis in the 1981 meeting with President Spadolini mentioned above. Indeed, he
recalled that, after having 'invited him to describe the economic situation to him as
clearly as possible [...] Spadolini listened very closely, took several pages of notes in his
own handwriting and when he had finished, commented that the outlook he had
described was even bleaker than he had thought. We agreed' - said Ciampi - 'that one
can construct something on worries but not on illusions'.23
28. That he was very clear on the motivations underlying his actions in his successive roles
as Governor, Prime Minister, Minister, and President of the Republic, I believe is
sufficiently apparent from all that I have said so far. What I would still like to underline
is Ciampi's habit of taking full responsibility for each role he held while simultaneously
including others and encouraging them to take on their own responsibilities. It's that
idea of 'it is up to us' - a phrase used by his predecessor Donato Menichella - that
appears in all of his written work and, even more importantly, in his actions. Again,
while presenting the EFD for 1997-99, Ciampi said, 'it has taken Italy four years to step
away from the abyss, halve its deficit, and virtually wipe out its foreign debt. A country
such as this does not deserve to be excluded from the fundamental transition towards
Europe's new political and economic framework'. And he warned that 'failure would
only be due to a lack of faith in ourselves, in our doubting our strengths during the final
leg of the journey [...] We have twenty months ahead of us. Not a single week must be
lost'.24
29. Today, we have no such tight deadlines, but the challenge is hardly different from the
one we faced in the 1990s. We have to complete the task of consolidating the public
finances, as was done so determinedly in those years, deploying structural measures to
curb the debt-to-GDP ratio's tendency to escalate and bringing about a rapid
contraction. Last year, when the Bank of Italy was called on to testify before Parliament
during the debate on the 2017 Update of the Economic and Financial Document, I
stressed the 'need to seize the opportunity offered by the current situation [...] to
strengthen the public finances and visibly reduce the debt, our perennial weak point,
and to lay the foundations for long-term growth'. I again stressed that a 'credible
commitment to ensure orderly public finances is essential if we are to ensure that a
gradual return to normality in eurozone monetary and financial conditions does not
widen the gap between the cost of the public debt and economic growth, as this would,
in turn, set off a vicious circle, causing the debt to expand'.25 As Ciampi would have
remarked, and in fact did in 1996, 'it is a matter of regaining a degree of freedom in the
adoption of budget policies that has been lost, or at least greatly curtailed, owing to the
structural imbalance of our public finances. This freedom is particularly important in a
system such as ours, which has to turn economic policy around and redirect it towards
growth and employment'.26
Conclusions
30. Carlo Azeglio Ciampi's qualities cannot be fully appreciated without considering his
cultural roots. The writings collected in these two volumes clearly illustrate his
intellectual heritage; though never explicitly named, this heritage is apparent from the
citations: Mazzini, Cavour, Einaudi, De Gasperi, and onwards to Giovanni Spadolini,
Paolo Baffi and Tommaso Padoa Schioppa. In an article written in 2009, he is more
explicit and precise about this heritage: 'My advanced age,' Ciampi wrote at the time,
'leads me increasingly to seek out people and voices from the past; whether this is to
recapture the spirit of youth or to lighten the burden of my present weakness, I do not
know. Sometimes, I will pick up, at random, an old piece of writing: books of literature,
history or politics that were my companions years ago. Many of them are the voices of
writers that I, too, consider to be among 'my elders': from Ruffini to Calogero, from
Salvatorelli to De Ruggiero, from Omodeo to Calamandrei, right up to my near
contemporary Galante Garrone. Whatever the specific subject of their writing, I am
always surprised to discover that single, unbroken thread that runs through our history,
from the Risorgimento to the Republic via the Liberation'.27
31. Ciampi was known to be fascinated with the Italian Risorgimento. His passionate
interest in this period of history, so far removed from the rampant Chauvinism of the
Fascist years, led him to view the European Union not as a threat to national identity
and culture but as a means of ensuring their survival and expansion within a global
framework because, as he said, 'no one alone can nurture their invaluable cultural, civic
and religious heritage, which is an integral part of our European identity'.28
32. From the same cultural roots sprang Ciampi's vocation to 'serve the general interest'.
The Italian patriots were not only fighters, 'they were an honest, disinterested ruling
class present in every town and every region of Italy'.29 To serve the general interest, 'in
his own words, ... "you do not - indeed should not - have to be an exceptional human
being, a saint, a hero or an anchorite, [but] you do need to believe firmly in the basic
values of democracy; importantly, you should set realistic goals for the development of
society; you only need to be an honest, capable man or woman, practising the values
and beliefs that you preach, and ... look on the task you have undertaken above all as a
civic duty"'.30 This is why, when Ciampi took responsibility for tasks with which he was
entrusted at difficult times, 'tasks [I quote another of his successors, Ignazio Visco] that
he sometimes imagined would, as he put it, prove beyond his power',31 he managed to
set aside all his doubts and hesitations.
33. It has been said that we owe Ciampi more than just his contribution to the economy: we
owe him 'a great and enduring belief in the capabilities of Italians'.32 During the
inception of the euro, in May 1998 Ciampi told the Chamber of Deputies that 'Italy has
given Europe what the European Union most needs: proof of how much a country and a
people can do when they are given a great purpose and put all their best efforts into
achieving it'.33 Now that we have come through a ruinous economic crisis and find
ourselves half way along a path of reform which has already greatly changed the
functioning of our economy and will continue to change it even more; now that we are
called on once again to make our voice heard clearly in the European debate, Carlo
Azeglio Ciampi would exhort us to prove that we can do again what we did in the past:
when faced with momentous choices, we have always taken the course that was
difficult but right.
30
Ignazio Visco, Ciampi a Via Venti Settembre, p. 5, (https://www.bancaditalia.it/pubblicazioni/
interventi-governatore/integov2016/visco-141120126.pdf).
31
Ignazio Visco, Ciampi a Via Venti Settembre, p. 5, (https://www.bancaditalia.it/pubblicazioni/
interventi-governatore/integov2016/visco-141120126.pdf).
32
G. Nardozzi, 'Il governatorato di Carlo Azeglio Ciampi (1979-1993)', in Governare la moneta -
La Banca d'Italia da Einaudi a Ciampi, Biblioteca della Nuova Antologia, Edizioni Polistampa,
Florence 2004, p. 168.
33
'Operare Europa, pensare Europa, sognare Europa', in Scritti nella Nuova Antologia, vol. 1,
p. 177.
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