In an interview published today by the Italian daily La Repubblica the CEO of Intesa Sanpaolo, Carlo Messina, announced €50 billion in lending to companies in difficulty during Italy’s COVID-19 emergency and a new ‘impact loan’ for social initiatives.
Looking to the future, Carlo Messina is optimistic: “If Italy gets this right, the country can emerge stronger from the crisis. But everyone must do their part without hesitation, both as citizens and as an active part of the economy”. He added: “If we fail to do this, we risk 10 million people falling into poverty”.
“There is significant private wealth in Italy, and solid businesses. Those in a position to help need to do more; today this means supporting the healthcare system, and tomorrow it means helping to mend the tears in the social fabric. Much more will need to be done in this sense over the next two years”, said Carlo Messina.
Intesa Sanpaolo will continue to sustain the country as it faces the Coronavirus emergency, with €450 billion in credit made available – equal to more than 25% of GDP – and through donations that total over €100 million.
“In March, we provided €5 billion in additional credit, free of any collateral requirements, and I believe we were one of the few to do this when the virus was just starting to explode. We then created a €15 billion facility for new credit, and the Government’s measures passed on Monday enable us to immediately increase this to €50 billion,” said Intesa Sanpaolo’s CEO.
Carlo Messina also announced a new zero-interest, long-term impact loan “dedicated to initiatives with significant social impact: those building a hospital, those conducting scientific research, those helping the needy and sick”.
The recovery, says Messina, will require business owners to recapitalize their companies, and a reduction of the public debt by securitizing state real estate assets, along with support from the European Union.
Carlo Messina’s recipe for EU intervention proposes a solution “by which the ESM sells debt on the market, used to recapitalize the European Investment Bank, which in turn can finance countries without restrictions. If the ESM were to issue bonds for €100 billion, the EIB could then apply its multiplier of over 6x to finance €600 billion in European projects, with about €100 billion going to Italy prorated based on its shareholding in the EIB. With this, Italy could tap other resources on its own, by selling bonds to institutional investors backed by public real estate assets worth between €200 billion and €400 billion. With these resources, Italy could support the economy and begin to look to future transformation”.
Asked about the bid for UBI Banca, the CEO said: “The public offer makes more sense than ever. We are proceeding with determination, aiming to offer even more credit, bringing value to people and communities, protecting jobs and supporting social causes. I am increasingly convinced that the Italian banking scenario will change profoundly this year, and scale will be all the more important”.
(Associated Medias – Red/Giut)