“Every day the situation changes, which means that the uncertainty – the dominant feature of recent discussions – is now moving in a positive direction, but this does not mean the situation is resolved,” said Economy Minister Giancarlo Giorgetti upon learning of the full reopening of the Strait of Hormuz. Giorgetti, who attended the IMF Spring Meetings in Washington DC, spoke with journalists at the end of his official trip to summarize developments after his days in the U.S. capital. He also discussed his meeting with U.S. Treasury Secretary Scott Bessent. “In the meeting with Secretary Bessent, which was as always friendly, strategic points of agreement emerged. Foremost among them is the need to become self-sufficient regarding critical materials and raw materials. Naturally, there are sometimes differing interests that only continuous dialogue can bring to mutually acceptable compromises,” the minister said.

The energy crisis caused by the closure of the Strait of Hormuz has not hit Italy as hard as in the past, thanks to improvements in Italian energy efficiency, said Bank of Italy Governor Fabio Panetta, who was travelling with the minister on an official visit. “Moreover, our conditions are better: that is the main point, and we acknowledge the Minister’s work, and public accounts are under control. There was no alarm about public finances. That does not mean we can relax; it means we must remain vigilant and keep public finances under control. We have a strong banking system and have increased investment levels, so overall the situation is positive,” Panetta said. Responding to market reactions that many analysts called overly complacent, Panetta noted that this was mainly the case in American markets, given the energy autonomy enjoyed by the United States, which supports continuous economic growth there.

Giorgetti said the outlook for Italy is positive but stressed that markets can be unpredictable: “Markets are rational, but also irrational. They react to the immediate and to expectations. So one must consider long-term trends, not just daily ups and downs. In these days any statement or event can push prices up or down. We need rationality and a cool head to assess long-term dynamics. The long-term outlook for Italy and the Italian stock market is favorable, and we hope it continues that way.”

Addressing the IMF’s view that the Meloni government’s cut to fuel excise duties was an unwise move to counter the effects of the Hormuz closure, Giorgetti commented: “From a technical perspective it can make sense. Obviously, those who make political decisions must weigh other considerations. I don’t envy finance ministers at the moment. The meetings these days, including at the European level, have confirmed a sense of unease, and there has been a request to the European Commission to take urgent, swift and effective measures to counter what we hope is a temporary situation.” Helge Berger of the IMF’s European Department said at a Washington press conference that Italy “has room to improve growth, which at current levels remains unsatisfactory: we hope for further progress in this direction.” On the path to fiscal consolidation, the Fund emphasizes the need for concrete reforms and precise programs.

The minister did not view those assessments negatively. “They are much better evaluations than three years ago when I first came here, which is a good sign. The course we have taken continues. That said, exceptional situations beyond our control risk creating shocks not only for Italy and Europe but for the global economy,” he warned.

Giorgetti and Panetta met, as usual, with the rating agencies for an exchange described as “frank and cordial,” without providing further details. A new international factor has emerged in the discussions. “Compared with the clear trajectory we had, the international situation is new – and if it persists it will create knock-on effects for everyone, not just Italy.” Regarding Kevin Warsh, who has been mentioned as a potential successor to Jerome Powell at the U.S. central bank, Governor Panetta said he expects Warsh to act as a central banker: “He is a capable economist and has previously worked at the Federal Reserve. He has a reputation to uphold and I expect him to perform his duties with dedication and integrity,” the governor added. (by Iacopo Luzi)