It’s only business
Organised crime has tightened its grip on the Italian economy during the economic crisis, making the Mafia the country’s biggest ‘bank’ and squeezing the life out of thousands of small firms, according to a report.
Extortionate lending by criminal groups had become a “national emergency,” said the report by anti-crime group SOS Impresa.
Organised crime now generates annual turnover of about €140bn and profits of more than €100bn, about 7 per cent of Italy’s GDP, it added. “With €65bn in liquidity, the Mafia is Italy’s number one bank,” said a statement from the group, which was set up in Palermo a decade ago to oppose extortion rackets against small business.
The country’s four mafia groups have broken out of their traditional strongholds and spread their tentacles across the whole country, taking advantage of the economic crisis to snap up ailing businesses and ramp up their loan-shark operations.
They now boast estimated cash reserves of €65bn, collectively making them “Italy’s biggest bank”, according to another study released last week by Confesercenti, an employers’ association.
“According to our estimates, loan sharking caused the closure in 2010 of 1,800 businesses and destroyed thousands of jobs,” said Marco Venturi, the president of Confesercenti. “Right now, Mafia Inc is the only business enterprise willing to make substantial investments.” The Mafia’s revenues were far greater even than big companies such as Eni, Italy’s oil giant, which in 2010 notched up around €100bn in sales. Confesercenti, which represents 270,000 small-to-medium-sized businesses, said the new technocrat government of Mario Monti had to help firms “retake territory occupied by the Mafia”.
Extortionate lending had become an increasingly sophisticated and lucrative source of income, alongside drug trafficking, arms smuggling, prostitution, gambling and racketeering, according to the anti-crime group SOS Impresa’s report, ‘Criminality’s Grip on Business’. “The classic neighborhood or street loan shark is on the way out, giving way to organized loan-sharking that is well connected with professional circles and operates with the connivance of high-level professionals.” It estimated about 200,000 businesses were tied to extortionate lenders and tens of thousands of jobs had been lost as a result. Old-style gangsters handing out cash in bars and pool halls had been replaced by apparently respectable bankers, lawyers or notaries: “This is extortion with a clean face,” said the report. “Through their professions, they know the mechanisms of the legal credit market and they often know the financial position of their victims perfectly.” Small businesses, who have struggled to get hold of credit during the economic slowdown, may have been increasingly tempted to turn to the Mafia. Typical victims of extortionate lending were middle-aged shopkeepers and small businessmen who would struggle to find a new job and who were ready to try anything to avoid bankruptcy.
“They are usually people in traditional retail sectors like food, greengrocers, clothes or shoe shops, florists or furniture shops. These are the categories which, more than any other, are paying the price of the (economic) crisis.”