It may have seemed an incontrovertible fact that the global economic crisis was doing no one any good, but it appears there is an exception — Italy’s central bank governor said the recession could represent a bonanza for the mafia.
Mario Draghi, the head of the Bank of Italy, told the Rome parliament’s anti-mafia commission: “During a recession, firms see their cash flows dry up and watch the market value of their assets fall. Both these phenomena render companies more easily assailable by organized crime.”
The governor highlighted the dangerous possibility that mobsters belonging to Sicily’s Cosa Nostra and the country’s other mafias, anxious to launder “hot” money, could grab stakes in hard-pressed firms at bargain prices. This, he said, could happen without the knowledge of the firm’s executives, but also in some cases with it.
Draghi warned of “the risk that, for personal benefit, or the misconstrued good of the firm, certain executives might opt to accept — or even to search out — funds of dubious provenance.”
Italy’s mafias offer a vast pool of temptingly ready cash. A study two years ago by small businesses federation Confesercenti concluded that their combined annual turnover of 3 billion euros (US$4.3 billion) was bigger than that of any legitimate Italian corporation. Organized crime generated the equivalent of 7 percent of the country’s GDP, the study estimated.
Just how far mobsters have burrowed into the fabric of the Italian economy was underscored on Wednesday when police closed 10 restaurants and bars in Rome, including one of the capital’s most famous haunts, the Cafe de Paris on the Via Veneto. The assets they seized, worth 200 million euros, belonged to one of 100 or more clans that make up the Calabrian mafia, which has grown rich on cocaine trafficking.
The Bank of Italy’s warning prompted another from the employers’ federation, Confindustria.
Antonello Montante, a senior official, said the danger to companies was “dramatic,” adding that many also risked falling prey to loan sharks.
Montante said it was necessary to avoid a situation in which “the only way to find credit is by way of usury.”
“There is a danger of organized crime replacing the banking system,” Montante said.
Confindustria is pressing for measures to ensure that Italian businesses get continued access to credit.
Central bank figures show that the flow of loans to businesses has fallen drastically in the past 18 months. By May, the volume of credit made available to companies of all sizes had shrunk to less than a quarter of what it had been in December 2007.
Partly because of the prevalence of organized crime and partly because of the difficulty of obtaining credit in Italy, loan-sharking is widespread.
Annualized interest rates usually range between 120 percent and 240 percent. Mobsters rarely extend these loans themselves, but often supply usurers with capital — and enforcement muscle.
Airlines in Australia, Hong Kong, India, Malaysia and Singapore yesterday canceled flights to and from the Indonesian island of Bali, after a nearby volcano catapulted an ash tower into the sky. Australia’s Jetstar, Qantas and Virgin Australia all grounded flights after Mount Lewotobi Laki-Laki on Flores island spewed a 9km tower a day earlier. Malaysia Airlines, AirAsia, India’s IndiGo and Singapore’s Scoot also listed flights as canceled. “Volcanic ash poses a significant threat to safe operations of the aircraft in the vicinity of volcanic clouds,” AirAsia said as it announced several cancelations. Multiple eruptions from the 1,703m twin-peaked volcano in
Farmer Liu Bingyong used to make a tidy profit selling milk but is now leaking cash — hit by a dairy sector crisis that embodies several of China’s economic woes. Milk is not a traditional mainstay of Chinese diets, but the Chinese government has long pushed people to drink more, citing its health benefits. The country has expanded its dairy production capacity and imported vast numbers of cattle in recent years as Beijing pursues food self-sufficiency. However, chronically low consumption has left the market sloshing with unwanted milk — driving down prices and pushing farmers to the brink — while
China has built a land-based prototype nuclear reactor for a large surface warship, in the clearest sign yet Beijing is advancing toward producing the nation’s first nuclear-powered aircraft carrier, according to a new analysis of satellite imagery and Chinese government documents provided to The Associated Press. There have long been rumors that China is planning to build a nuclear-powered aircraft carrier, but the research by the Middlebury Institute of International Studies in California is the first to confirm it is working on a nuclear-powered propulsion system for a carrier-sized surface warship. Why is China’s pursuit of nuclear-powered carriers significant? China’s navy is already
‘SIGNS OF ESCALATION’: Russian forces have been aiming to capture Ukraine’s eastern Donbas province and have been capturing new villages as they move toward Pokrovsk Ukrainian Commander-in-Chief Oleksandr Syrskyi on Saturday said that Ukraine faced increasing difficulties in its fight against Moscow’s invasion as Russian forces advance and North Korean troops prepare to join the Kremlin’s campaign. Syrskyi, relating comments he made to a top US general, said outnumbered Ukrainian forces faced Russian attacks in key sectors of the more than two-and-a-half-year-old war with Russia. Ukrainian President Volodymyr Zelenskiy in a nightly address said that Ukraine’s military command was focused on defending around the town of Kurakhove — a target of Russia’s advances along with Pokrovsk, a logistical hub to the north. He decried strikes
RSS