Tommaso Padoa-Schioppa:TOMMASO PADOA-SCHIOPPA, who has died aged 70 after a heart attack, was the best sort of economist, who saw in his discipline not maths and money but people and values.
He had a towering intellect but was utterly devoid of that arrogance and condescension that all too often characterise the keepers of finance’s arcane mysteries. Padoa-Schioppa had as good a claim as anyone to have been the intellectual father of the euro, though how much posthumous glory that will bring him will depend on events that have only this year begun to take shape.
One thing is certain, though. He is unlikely to be much missed by his fellow Italians. As their finance minister in Italy's last centre-left government, he tried to make them pay their taxes. In 2007 he notoriously described taxes as una cosa bellissima(a beautiful thing) because, he said, they were a civilised way of contributing to the common good.
That is a wholly revolutionary and subversive thing to say in Italy. Il Giornale, the newspaper of the Berlusconi family, carried a cartoon on its front page the next day showing Padoa-Schioppa in a straitjacket. There are plenty of people, of the left and right alike, who believe the sacrifices demanded by Padoa-Schioppa made an important contribution to Silvio Berlusconi's 2008 election victory.
Born in the mountain town of Belluno, in northern Italy, Padoa-Schioppa was from a Milanese family. His father became a senior executive of the insurance company Assicurazioni Generali, based in Trieste, so he went to school in that windy city at the head of the Adriatic which – then as now – was Italy’s most inherently cosmopolitan place.
By upbringing as much as vocation, Padoa-Schioppa was an internationalist. He graduated from Bocconi University in Milan, did a master’s in economics at the Massachusetts Institute of Technology in Boston and found his first job with the German-Dutch group CA. In 1968, he returned to his home country to join the Bank of Italy, one of a handful of institutions whose probity and excellence stop the whole place descending into anarchy. Padoa-Schioppa was the vice-director-general from 1984 to 1997.
Although twice tipped for the governorship, it was outside Italy’s central bank that he achieved greatest distinction. In 1982, while on loan to the European Commission as director general for economic and financial affairs, Padoa-Schioppa wrote a paper arguing that it was inconsistent for the EU member states to clear away barriers to the movement of capital and goods, aspire to fixed exchange rates and yet hope to retain control of their monetary policies. He proposed a single currency as the solution.
Six years later, when the EU adopted economic and monetary union (EMU) as an objective, Jacques Delors, then president of the European commission, made Padoa-Schioppa joint secretary of the committee, which came to be known as the Delors committee, charged with drawing up a blueprint for its introduction. When the European Central Bank came into existence in 1998, Padoa-Schioppa was appointed to the executive board and remained a member until 2006 when he again returned to Italy, this time to be economy and finance minister in Romano Prodi’s newly-elected centre-left government.
He inherited from the previous Berlusconi government an apparently daunting situation. The economy had been floundering for the previous five years and the government seemed to have lost control of the budget deficit, which had already reached 4.3 per cent of GDP in 2005. Padoa-Schioppa persuaded the rest of the cabinet that the situation was so dire it required draconian measures, both to increase tax revenues and cut government spending. But what he did not realise – or chose not to tell them (this will be a subject for future historians) – was that a string of tax amnesties adopted by the previous government, and much criticised as short-term expedients, had widened the tax base and were bringing in far more revenue than expected. Padoa-Schioppa’s austerity measures did the trick. The budget deficit fell below the EU’s 3 per cent limit in 2007 for the first time in five years.
But an impression was created that he had demanded sacrifices that were not strictly necessary, and his praise of taxation did nothing to dispel that impression. It was not his only memorable remark. He was the first person to describe the euro as “a currency without a state” and once compared EMU to the emu because “neither can go backwards”.
In 2007, he shocked his compatriots and amused many non-Italians with a comment on Italy’s stay-at-home youngsters. Explaining to a parliamentary committee the reasons for planned tax breaks, he said “we’re slinging the bamboccioni [mummies’ boys] out of the house”.
There were complaints, true in themselves, that many young Italians were forced to remain with their parents because they did not have the money to leave home. But the protests tended to ignore the fact that Padoa-Schioppa was making a rare attempt to tackle the reasons why they did not.
He married the economist Fiorella Kostoris in 1966 and they had three children, Camillo, Caterina and Costanza. After their divorce, he became the partner of a journalist, Barbara Spinelli. She and his children survive him.
Tommaso Padoa-Schioppa: born July 23rd, 1940; died December 18th, 2010