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Panetta warns US tariffs could cut global growth nearly one point; highlights Italian recovery

He proposes a European public bond to finance investments, cautions on protectionism’s toll, flags ECB’s shift toward lower rates

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Overview

  • Panetta warns recent US tariffs could reduce global GDP growth by nearly one percentage point over two years; US output may face up to twice that impact.
  • Italy’s economy shows improving fundamentals including robust bank capitalization and higher employment; it remains challenged by high public debt, stagnant productivity and real wages below 2000 levels.
  • The Bank of Italy forecasts 2025 growth at 0.6%; the ECB appears poised to cut interest rates toward expansionary territory ahead of its June meeting.
  • Panetta proposes issuing a European public bond to finance strategic investments and establish a common benchmark for the EU financial system.
  • He cautions that volatile cryptocurrencies and stablecoins pose risks to financial stability and urges tighter EU regulation and deeper capital market integration.