ContextWelcome address by Fabio Panetta, Governor of the Bank of Italy, at the "International macroeconomics in a changing world - old questions, new realities" workshop, organised by the Bank of Italy, Centre for Economic Policy Research (CEPR) and LUISS ….
Why it mattersA short reflection linking the intellectual origins of the euro to today's geopolitical and technological shifts.
- War and geopolitical rivalry are reshaping trade and energy.
- Economic fragmentation creates strategic dependencies.
- AI raises questions about productivity, inequality and sovereignty.
- Draw lessons from Mundell's work on monetary unions.
- Strengthen the international monetary system.
- Support research on how geopolitics shapes money.
Read the speech summary
1. Honouring Mundell
Opening a Rome workshop held with CEPR and LUISS in memory of the Nobel laureate Robert Mundell, the Governor of the Bank of Italy recalled that Mundell's work covered optimal currency areas, the global monetary system and its geopolitics. His 1961 analysis saw low labour mobility as Europe's main obstacle to a shared currency, while others stressed the lack of common fiscal stabilisation.
2. A political project
In a 1969 plan, Mundell argued that Europe's money should rest above all on political reasons. Panetta agreed: monetary union grew from the post-war drive for reconciliation that produced the Coal and Steel Community in 1951, and three decades after Mundell's plan the euro was born.
3. Two waves of crises
The 2008 financial crisis and the 2010-11 debt crisis split the area into core and periphery, with uncoordinated budgets leaving monetary policy alone until Draghi's pledge restored calm. The pandemic and energy shock, though larger, met a joint response through Next Generation EU and national support.
4. What remains to be done
Europe should revive growth with reforms and joint investment in research, energy, digital networks and AI; build a true savings and investments union with simpler rules and a common safe bond; and digitalise payments, including a digital euro, to protect monetary sovereignty, a risk Mundell already linked to the dollar. Quoting Monnet's idea that Europe is built through crises, he argued that such slow, crisis-led progress no longer fits a fast-changing world: Europe must act before crises force it to, and the euro stands for unity, sovereignty and shared values.