Mafia tightens grip on Italy’s economy

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, adding that organised crime generates annual turnover of about €140 billion and profits of over €100bn.

“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.

Organised crime groups such as the Sicilian Cosa Nostra, the Naples Camorra and the Calabrian ‘Ndrangheta have long had a stranglehold on the Italian economy, generating profits equivalent to about 7% of national output.

Extortionate lending had become an increasingly sophisticated and lucrative source of income, alongside drug trafficking, arms smuggling, prostitution, gambling and racketeering, the report said.

“The classic neighbourhood or street loan shark is on the way out, giving way to organised loan-sharking that is well connected with professional circles and operates with the connivance of high-level professionals,” the report said.

It estimated that about 200,000 businesses were tied to extortionate lenders and that 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Old-style gangsters handing out cash in bars and pool halls had been replaced by apparently respectable bankers, lawyers or notaries.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,” the report stated. “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 access credit during the economic slowdown, may have been increasingly tempted to turn to the mafia, said the report.

Typical victims of extortionate lending were middle-aged shopkeepers and small businessmen who would struggle to find a new job and would try anything to avoid bankruptcy, it added.

“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,” the report stated.

According to a separate report this week from small business association CNA, 56% of companies had seen banks tighten their lending requirements in the past three months.