Italian capitalism won’t come away unscathed from Fiat’s latest manoeuvres. The era of grand families controlling swathes of the country’s industry through cross-shareholdings is on the wane.
The Agnellis were more than Fiat’s controlling shareholders. They have been the de facto royal family of Italian capitalism. Gianni Agnelli, the patriarch who died in 2003, was at the centre of a web the cross-shareholdings that gave a small group of entrepreneurs and bankers disproportionate power over Italian industry. The group was called the “salotto buono” (literally “the fine drawing room”).
Gianni’s grandson John Elkann is now willing to dilute the family’s 30% stake in Fiat Auto – reportedly to 10% – to allow the carmaker to merge with GM Europe. That would loosen the web for good.
This should be good news. The “salotto buono” was useful after World War II, when it helped guide a demoralised and divided country towards industrialisation and democracy. But two generations later, it tends to strangle meritocracy and cut into competitiveness.
The downturn has been tough on some of the old powerbrokers. Mediobanca, the investment bank disproportionately powerful because of its shareholdings, reported a plunge in profits after taking E281m of writedowns on strategic stakes in Telecom Italia and RCS Mediagroup.
But the old network might be replaced by something worse: “Berlusconism”. Silvio Berlusconi is prime minister, the richest man in Italy and master of most of the country’s media. His political opposition is shockingly weak. And the disgrace of “Anglo-Saxon finance” leaves an open space to be filled by the kind of statism he favours.
Berlusconi has already meddled directly in the national airline, Alitalia and the national telephone operator, Telecom Italia. His indirect influence is even being felt in old bastions of financial power such as Mediobanca where his daughter recently won a board seat.
Italy did not do too badly with the “mixed” state-private economic model it followed postwar. But Berlusconi’s version seems to have a special twist. His record shows he likes talking about reform, but his actions reveal an unhealthy interest in furthering his personal empire. With Italian GDP predicted to shrink 4% this year, that approach is the last thing Italian business needs.