Tommaso Padoa-Schioppa

Tommaso Padoa-Schioppa, OMRI (Italian pronunciation: [tomˈmaːzo ˈpaːdoa ˈskjɔppa]; 23 July 1940 – 18 December 2010) was a well-known Italian banker and economist who was Italy's Minister of Economy and Finances from May 2006 until May 2008. He is considered as a founding father of the European single currency. He is a former member of the Steering Committee of the Bilderberg Group.

Biography

Born in the mountain town of Belluno, in north-eastern Italy. Both his parents were intellectuals. His father, Fabio (1911–2012), whom he did not meet until after the war in 1945, was a teacher and later became a senior executive at the insurance company Assicurazioni Generali.

He graduated from Bocconi University (Milan) in 1966 and received a master's degree from the Massachusetts Institute of Technology in 1970. After a first job in Germany with the retailer C&A Brenninkmeijer, he joined the Bank of Italy in 1968, eventually becoming Vice-Director General from 1984 to 1997. In 1980 he became a member of the influential Washington-based financial advisory body, the Group of Thirty and remained one till his death. From 1993-97, he was president of the Basel Committee on Banking Supervision, and from 2000-05 Chairman of the Committee on Payment and Settlement Systems. In 1997–98 he was head of Consob, Italy's stock market supervision agency. He was a member of the European Central Bank's six-member executive board from its foundation in 1998 until the end of May 2005. In October 2005 he became president of Paris-based think tank Notre Europe.

On 17 May 2006 he was appointed as Economy and Finances Minister in the government of Romano Prodi, serving in that post until May 2008, when a new government headed by Silvio Berlusconi took office following the April 2008 general election. From October 2007 to April 2008 he was Chairman of the IMFC (International Monetary and Financial Committee), the top policy steering committee of the International Monetary Fund (IMF). In June 2009 he was appointed as chairman for Europe of the private finance consulting Promontory Financial Group.

Personal life

He was married to the economist Fiorella Kostoris; they have three children. After their divorce, he became the companion of Barbara Spinelli, a journalist, daughter of Altiero Spinelli and Ursula Hirschmann.

Death

Padoa-Schioppa died on 18 December 2010, aged 70, after suffering a fatal heart attack during a dinner he had organized in Rome.

Terms coined or popularized by Padoa-Schioppa

In 2006 Padoa-Schioppa coined the expression "il tesoretto" (the little treasure) to describe the increased government revenues under his administration. The term was widely used by politicians as they debated how this new money should be spent. In October 2007 he spoke to a parliamentary committee about the government's plan for tax relief (approx. €500/year) to people 20–30 years old still living with their family, saying it would help them move out on their own. He used the ironic or sarcastic term "bamboccioni" (big dummy boys, or big stuffed children) and this created a big fuss in Italian public opinion.

Newspapers received numerous letters from readers personally taking offence and pointing out that he understood little about the situation of a considerable part of the 20–30 years old Italian population, who live on approximately €1,000 per month and cannot afford to leave their parents' house. According to some lexicographers, "bamboccioni" was the most popular new Italian word of 2007. He was the first to describe the euro as "a currency without a State" (in a book published in 2004), a term that was later popularized by Otmar Issing.

Role in the creation of the euro

Padoa-Schioppa has been called the "intellectual impetus" behind the euro and the "founding father" of the new currency. In an economics paper written in 1982 he pointed out that it is impossible for a group of countries like the EU to simultaneously aim at:

• free trade,
• capital mobility,
• independent domestic monetary policies, and
• fixed exchange rates.

These four goals, each apparently desirable on its own, he called "the inconsistent quartet" (see also the similar Impossible trinity concept).

At that time, European Union countries maintained some restrictions on trade and (especially) on capital movements. These were gradually eliminated through the Single Market programme and the liberalization of capital movements, so that by the late 1980s one of the two remaining objectives had to go to for consistency to be maintained. He proposed that the third objective (independent monetary policies) be abandoned, by creating a single currency and a single European central bank, so that the other three objectives could be attained. The Delors Report of April 1989 endorsed this view and recommended a European Monetary Union (EMU) with a single currency. He worked on designing and setting up the new European Central Bank and became one of the first executive board members (June 1998-May 2005).

Books

•  
•  
•   (Italian language)