Italy has the savings. Why doesn’t it finance its businesses?

I’ll put it bluntly.

Our savings in current accounts are slowly being eroded by inflation and, at the same time, an increasing share of Italians’ financial wealth is being channelled toward economies other than our own.

We have built a banking and financial system increasingly focused on fundraising, wealth management, fees, liquidity and volumes.

A system that is perfectly rational from a professional and compliance standpoint, but less so from the perspective of the country, unless we rediscover a renewed individual and collective commitment capable of translating into systemic action that combines investment returns with national economic development, preserving Italian continuity.

Banks are announcing strategies centred on the growth of asset management. They collect Italians’ money and direct it — net of annual management fees — mostly toward open-ended funds and global ETFs, rarely managed by Italians, which inevitably end up concentrating a predominant share of investments in large international market-cap companies.

Not because someone has necessarily determined, on the basis of fundamental analysis, that those companies are worth more than ours. Simply because they are large, liquid, included in the indices and purchased by the flows that replicate those indices.

Meanwhile, many excellent Italian companies trade at earnings multiples that are dramatically lower.

This does not mean claiming that their shares will rise more than international large caps, but something much simpler: for the same amount of invested capital, we buy a much larger share of the profits generated by the company.

A P/E of 10 means paying ten euros for one euro of earnings. A P/E of 25 means paying twenty-five.

The market may then decide that the “second euro” of annual earnings deserves to cost two and a half times the “first”.

But at least let us ask ourselves a question: why must Italian savers be guided so efficiently toward the second and so little toward the first?

The contradiction becomes even more evident when we move from listed companies to unlisted ones.

On the one hand, Italians’ savings are collected to be invested in large foreign companies. On the other, national banks often finance leveraged buyout transactions that allow private equity funds and consolidating groups, often non-Italian, to acquire some of our best companies.

And so we find ourselves in a paradox: we sell cheaply the companies that generate income in Italy and, with the proceeds, we buy at a high price infinitesimal shares of companies that generate income elsewhere, in which our savings are diluted and over which we will never have control.

When a good Italian company is sold, of course, its owners realise the value built over one or more generations. That is legitimate. Sometimes it is inevitable.

And a foreign buyer may even be able to grow that company more than it could have grown on its own in the hands of an increasingly diverse owning family.

The problem arises when the exception becomes the system, and an alternative path of growth supported by Italian capital on Italian stock markets never seems to be considered.

If we look at the fifty or one hundred million euros received by the entrepreneur, or by their family, we discover that it is unlikely that all of it will return to financing new Italian businesses. It will enter the private banking, asset management, fund, ETF, compliance and global diversification circuit.

And so a portion of Italian productive capital is transformed into financial wealth invested predominantly elsewhere.

The seller may even become richer; the country not necessarily.

And this is where a potential social divide begins to emerge, one that we talk about far too little.

On one side, there will be the children of those who sold the company, with millions in the bank and a beautifully diversified portfolio.

On the other, the children of those who worked in that company. More than one of them left with nothing.

Because owning a company is not only the right to its dividends. It is control. It is headquarters. It is research. It is supplier selection. It is managers’ careers. It is the relationship with the local area. It is the decision about where to open the next plant and which one to close.

We can keep telling ourselves that capital has no nationality.

Work, however, has an address.

Meanwhile, we are ageing and having few children.

In the bleak landscape of demographic decline, we Italians, who are widely homeowners, can at least count on one prospect: we will have more houses per inhabitant, a substantial inherited real-estate wealth.

And probably parts of the “Bel Paese” will be attractive to those who, elsewhere in the world, will have accumulated the great fortunes whose growth we ourselves will have diligently contributed to through investments in global funds and ETFs managed by foreigners.

Someone might think that these wealthy foreigners will at least buy our homes. Perhaps.

But I do not believe the world’s “Scrooges” will come to Italy to enjoy the experience of living in a three-room apartment on the outskirts of Milan or Rome.

They will look for a villa with an endless sea view or a picturesque lake view, a penthouse overlooking magnificent monuments, a masseria, a home in the centre of Florence, Venice or Rome.

Or they will stay at the Four Seasons.

The price of those properties may rise, perhaps reaching extremely high values per square metre.

The value of the average Italian family’s three-room apartment will not enjoy the same surge; quite the opposite…

We may then discover that we have become, at the same time, a country rich in assets and poor in future prospects.

We will have sold companies, accumulated liquidity, bought global funds, revalued a few extraordinary properties and perhaps the luckiest among us will be able to celebrate the growth of the capital entrusted to asset managers.

But we will have fewer companies of our own, fewer decision-making centres, less work for people and domestic supply chains, less capital willing to take risks on the next Italian entrepreneur and an ever-widening gap between those who live off wealth accumulated by previous generations and those who still have to build an income for themselves.

Italy, as we know very well, does not have too little savings; it has an enormous amount. So how is it possible that a country full of savings is unable to invest in its vibrant real economy and share in its growth?

If we do not find an answer, one that begins with individuals before the system, we can continue like this: the road is clear. The wall of the apartment block on the outskirts is straight ahead of us.