The Strange Couple


The magazine, Internazionale, has published my article on the strange couple Profumo and Geronzi, the banker admired in Europe and the one convicted for bankruptcy. An all-Italian miracle.
Economy and the rule of law are two sides of the same coin. Without the rule of law, the economy is subject to a transformation: it becomes spaghetti-economy. What does this deviation from Adam Smith’s principles consist of?
There’s a text-book case to be taught in all Italian Economics Faculties. Imagine a block of cold spaghetti, a few days old, a white block, disgusting to look at. Select any single piece and try and pull it.
It will resist courageously. It will obstinately stay twisted up with the other strands.
You’ll never know where it finishes, or how long it is.
If you pull the spaghetti strand called Parmalat, where does it end? And the ones called Cirio, Banca Popolare di Lodi, Banca 121, or tango bond?
You have to make do with a view of the whole lot, outside the ball of spaghetti. It’s disgusting and that’s that. You can’t investigate further.
The conflicts of interest are so intertwined that a banker can also be a publisher, for example of il Corriere della Sera, an industrialist, on 2 Boards of Directors, can sell and buy from himself, an auditor can also be an administrator, a convict can be a president or a manager.
Economics, politics and publishing are a single thing. A triad that controls the System. An organisation defined by not snitching, much more powerful than the Camorra System denounced by Saviano in ‘Gomorra’. The merger of the two banks Unicredit and Capitalia is a demonstration of how the system protects itself.
In recent years Capitalia has been partly cleaned up, reorganized, returned to its ‘core business’ from the previous commercial management carried out in the corridors of Montecitorio. Before it was a bank to facilitate bipartisan politics.
Thanks to the CEO, Matteo Arpe, just a bit more than 40 years old. Arpe is one of the few bankers held in high esteem in the international financial world. He was against a series of manoeuvres by Cesare Geronzi, Capitalia’s 70-something president.
Geronzi tried to get rid of him. Arpe stayed in place thanks to the backing of foreign investors.
But who is Cesare Geronzi? His CV would be the envy of Al Capone.
The prosecutor of Parma asked for Geronzi to be debarred from being the president of Capitalia.
A Capitalia director, Andrea Del Moretto, had already discovered in 2002 how things were going in Parmalat, with bonds worth 7 thousand, million euro as opposed to the one thousand two hundred million declared on the balance sheet.
Geronzi did nothing. He didn’t withdraw credit to Parmalat and for more than a year they sold bonds with a hole inside.
Geronzi was convicted of preferential bankruptcy and sentenced to one year eight months in prison for the Italcase collapse by the Brescia Tribunal. The Board of Directors has obviously confirmed Geronzi in his position.
The merger with Unicredit creates the biggest Italian Bank. Profumo and Geronzi are triumphant on the pages of the newspapers. D’Arpe has resigned. Perhaps he’ll go abroad. The umpteenth brain drained.
D’Alema and Berlusconi are happy together with a well nourished group of politicians. Very happy. Perhaps too happy.
Geronzi is vice president of the Unicredit group, a 100,000,000,000 euro bank with shares quoted everywhere. In the media, with RCS, with the commercial banks, with Mediobanca.
It is said that Profumo will take care of the bank, and thus of the business, and Geronzi will take care of participation, thus of politics.
The best Italian banker at the side of Geronzi, the convict, is the photo of a collapse. The economy is based on reputation and we have lost that some time ago.

Posted by Beppe Grillo at 11:12 AM in | Comments (1)
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Posted by: Jobson Lemos | June 2, 2007 03:57 PM

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