Tremonti Clobbers Draghi for Banking Separation
September 1, 2012 • 9:31AM

At a public meeting in Belluno, Italy on Aug. 29, former Italian Economy Minister Giulio Tremonti blasted European Central Bank President Mario Draghi for having abolished the legislation that since 1936 had regulated Italy's banking system under Glass-Steagall-like rules.

"Draghi is the father of the banking legislation in Italy which de facto re-established a dangerous entanglement between chartered banks and investment banks, a situation which had already provoked the 1929 crisis," Tremonti said. Draghi "makes capital injections, for which banks pay 1% and loan at 6%."

Tremonti, who has broken with former Prime Minister Silvio Berlusconi, said he will soon make a comeback, "but I am not yet ready." He has a government program, however: "I would do like Roosevelt in 1933: shut down banks and reopen only the healthy ones, eliminate speculation by law and relaunch a massive plan of public works." Tremonti said common European bonds should be used for that.

In a previous interview with Corriere della Sera, Tremonti blasted the Monti government, charging that the labor reform "will produce 1 million unemployed." Again, he promised a comeback, although neither in his old PDL party, which "is more and more anthropomorphic" (i.e., modeled after Berlusconi's personality), nor in the Lega Nord which, under the new leadership, "has positions very different from those [it] expressed in the last government." Tremonti was referring to current Lega leader Roberto Maroni, who has adopted a "Europe of the regions" separatist pitch.

Rumor has it that Tremonti is thinking about a new party which would draw votes from a section of the PDL and a section of the Lega led by founder Umberto Bossi, who is ready to split.