High inflation is like a Hydra with
many heads and is a risk for democracy, the chairman of Italy's
stock market regulator Consob Paolo Savona said on Friday.
"Inflation is like a hydra with many heads; if one is cut off
and cauterized, the others act," said Savona in an address to
the financial markets.
High inflation also "creates the conditions for a deformation of
democracy and the emergence of forms of social violence,"
continued the Consob chairman, adding that "bringing down
inflation without creating a depression and social imbalances is
a very difficult task".
Savona said increases in the cost of living have been
transferred to taxation, but not to salaries, "which have so far
shown greater rigidity".
"Financial wealth continues to experience a serious depletion of
its real value," he added.
"Money, banks and capital markets are propelled in the same
direction by the power of technology, which already plays an
important role in real development and social stability,"
continued Savona, saying that it therefore becomes urgent to
reconsider how to "realign burdens and regulations, including
fiscal ones, among the different forms of savings investments,
correcting distortions that have become embedded over time and
countering the inequality in distribution that they bring
about".
Italy has always been able to cope, said Savona, adding that
many past difficulties have been "far more serious than those we
are currently experiencing". "There is no reason why it cannot
manage even in the current difficult international circumstances
where, among other things, the winds of war have begun to blow
with greater force, under the impetus of national egoism that
has never been quenched," said the Consob chairman.
Italy "has given its best in every era and in every
circumstance", he continued.
"Why should the opposite happen today, knowing full well that we
have cultural and material resources just waiting to be
mobilized?"
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