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INTERVIEW with Giuseppe Vita – President of UniCredit

21.06.2012

«The euro will be saved, Germany cannot do without it»

THE NEXT STEPS

«Political Unity is necessary: each member-State is to delegate part of its sovereignty to Europe»

by Alessandro Graziani

«I am confident that the euro will be saved, since there is no alternative to the single currency. Is German Chancellor Angela Merkel too inflexible? This is partially true. But I believe that, in the interests of Germany, she will go down in history as the saviour of the euro. It may seem like a paradox, but she is the only one who can do it. And we Italians have to help her».

Giuseppe Vita, 77 years old, a good part of which has been spent at the top of the major German companies, was made President of UniCredit a few weeks ago. UniCredit is the large Pan-European bank group with its base and «head» in Italy, but also strongly present in Germany, where, through Hypovereins Bank, it is the second ranked German lending group. For years Vita was in top management at the multinational Schering, then president of the Italian branch of the Deutsche Bank and Allianz. He is still chairman of the supervisory committee of the German publishing group, Axel Springer. Above all, he is one of the Italians mostly highly respected by the German establishment, as well as being personally acquainted with Chancellor Merkel («I greatly admire her»).

Last Wednesday he was in Berlin, when Prime Minister Mario Monti received an award for responsible leadership. We are meeting him in Milan at the main office of UniCredit. He is looking at the first page of Bild, the popular German daily paper that published the banner of the Irish fans to the Europeans on the title page that reads: «Merkel thinks we’re at work». Leg-pulling that turned into a case in the eyes of German public opinion. Unfortunately, this is the climate in Europe. And Vita is sorry to admit it. This is also due to the fact that he is a convinced Pro-European and absolutely determined to support a greater integration of Europe.

«Remember, in 2001 Helmut Kohl and Romano Prodi – two of the last true great European leaders – said that, after the launch of the single currency, political unity would be necessary, otherwise the euro would suffer a very serious crisis. Unfortunately, this warning went unheard and now we are paying the consequences».

According to Vita, «Political Unity is necessary and each member-State needs to delegate part of its sovereignty to Europe. Otherwise we cannot forge ahead».

These days, on the eve of elections in Greece, which are being held today, and the EU summit at the end of the month, everyone is wondering: what will Germany do? In particular, what will Merkel decide? Will she be sensitive to the appeals she has been receiving from all sides to open up to a plan that will bring about the true birth of the United States of Europe?

«I am convinced that Merkel will go down in the history of Germany and Europe as the saviour of the euro. The German chancellor is not against saving the countries that need aid – fortunately and thanks to the action of Prime Minister Mario Monti, Italy is not one of them -, but she does not intend to put cash – allow me to say – into a European colander. In Germany, too, funds are not unlimited. Merkel and the Germans say about the indebted countries: first plug the holes in the balance sheet, then intervene. And I am sure they will do it».

The problem, however, is time. Should there be an urgent intervention or will the combination of recession and market unrest risk bringing countries like Italy down? Will the European Council meeting at the end of the month be decisive?

«I believe there will be certain decisive measures in favour of European economic growth. I am personally in favour of the measures that II Sole 24 Ore (Italian daily financial paper) proposed for launching a not only economic European Union, but also a political one: single guarantee for bank deposits, direct access to the EFSF (European Financial Stability Fund) by bank institutions and progressive unification of European public debts. Germany is ready to pay to support the euro. But we Italians have to help Germany, which, during this phase, means help Merkel save the euro».

Haven’t Italians already done enough?

«Italy has passed important reforms. And Monti has the utmost faith in the government and German establishment. But there is a big question going around in Italy. Who guarantees the markets and Europe that the reforms shall go ahead even after the end of the current government? Will what Monti has done today continue tomorrow?»

No one can reply during this phase because it is impossible to know, today, who will be governing in Italy from 2013 and thereafter.

Ideally, observes Vita, would be «a commitment by all political parties to uphold the reforms passed by the Monti government over the years».

But these are theoretical commitments, meant to founder in case of future, unforeseeable political alliances. Pre-electoral period, on the other hand, does not only condition policies in Italy, but in all European countries, including Ms. Merkel’s Germany.

«I remember that, when Merkel decided in favour of the first European rescue, she was brought before the German Constitutional Court. It «acquitted» her, but with the obligation to go to the Parliament from then on and get a majority of 66%, then decide on other ways of rescuing the European countries together with the opposition».

Did this result in Merkel deciding on Europe, by first looking for consent at home in view of the September 2013 elections?

«Unfortunately, and it is sad to say about those who sustain democracy as a chief asset, elections are the real problem of a united Europe. The electoral campaign is permanent; there are not only politics, but also – above all in a federal republic like Germany – regional elections. Every decision about Europe conditions the home vote. In 2003, former Chancellor Schröder passed decisive economic reforms for the revival of Germany, in crisis at that time, and then lost the elections».

Will Ms. Merkel do the same for Europe?

«I believe she will do it mostly because Germany cannot do without the euro. If we expand the horizon to the entire world, the 6o million Italians or 8o million Germans are about 1% of the world population of 7 billion. After the fall of the Berlin wall, prosperity – until then limited to Europe and the West – began to gradually spread to the rest of the world. In this scenario, neither Italy nor Germany may think of competing alone. We only have a chance if we move as a united Europe. For this, I believe that, in the end, it is in the interests of everyone to save and reinforce the euro».

REMARKS

Angela Merkel, German Chancellor «She will go down in history as the saviour of the single currency»

Mario Monti, Prime Minister «What is needed is a commitment by all parties to uphold the reforms passed by the current executive power over the years»

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