x Abu Dhabi, UAEMonday 24 July 2017

Padoa-Schioppa: father of the euro

The Italian, who possessed fearlessness and wit in his role with the European Commission, has died.

The description of taxation as a beautiful thing is not likely to endear a minister of finance to his countrymen but it reflected an uncommon combination of fearlessness, pragmatism and wit that Tommaso Padoa-Schioppa exhibited through four decades - as a nationalist, in the service of his country and, as a federalist, in the service of Europe.

Born in Belluno in the Dolomites during a family holiday, Tommaso was the son of Milanese intellectuals and grew up in cosmopolitan Trieste where his father, a teacher, became an insurance executive. After economics at Bocconi University, Milan, and a master's under the Nobel laureate, Franco Modigliani at MIT, his first job was with the Dutch retailer C&A in Germany. Two years later he joined the Bank of Italy and it was as a central banker that he sustained his career.

By 1980 he was attached to the European Commission in Brussels and two years later, at a symposium, he raised the issue that the movement of capital and free trade was incompatible with individual monetary policy and fixed rates of exchange. In 1988 he was appointed joint secretary of a committee that recommended a common currency. Its implementation through the Maastricht Treaty in 1992 was led by Padoa-Schioppa.

From 1984 to 1997 he was vice director general of the Bank of Italy but was never to be governor. He was, however, chair of the Basel Committee, the international body that sets banking standards. In 1997 he became chairman of Consob, Italy's national securities commission.

In 1999, the year that the euro was adopted, he became a founding member of the six-man executive committee of the European Central Bank. That year, he famously announced that the euro was "a currency without a state".

All his strengths were called upon in 2006 when he joined the government of Romano Prodi as minister for economy and finance. Italy's budget deficit in 2005 was 4.3 per cent of GDP, 1.3 percentage points above the EU limit. This situation provoked the comment that taxes were "una cosa bellissima".

He also caused some controversy in calling for "the bamboccioni" (Italian men in their 30s still living with their parents) to be slung out of the house. In May 2008 the Prodi government fell but Padoa-Schioppa had managed to reduce the deficit to within EU limits.

From 2007 he chaired the policy committee of the IMF.

In August, he was appointed an adviser to the Greek government by George Papandreou, accepting it without a fee; and only days before his sudden death, of a heart attack, at a party for 100 he was hosting in Rome, it was announced he had become a board member of a new arm of the fabled Italian company Fiat.

He was divorced from his wife, economist Fiorella Kostoris. Their two daughters and a son survive him.

Born July 23, 1940; died December 18, 2010.