Mafia Now The Biggest Lender In Italy

A testament to the state of the banking industry in Italy and the resilience of a criminal network declared dead many times over the years

(Reuters) – Organized 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 on Tuesday.

Extortionate lending by criminal groups had become a “national emergency,” said the report by anti-crime group SOS Impresa.

Organized crime now generated annual turnover of about 140 billion euros ($178.89 billion) and profits of more than 100 billion euros, it added.

“With 65 billion euros 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.

Organized crime groups like the Sicilian Cosa Nostra, the Naples Camorra or the Calabrian ‘Ndrangheta have long had a stranglehold on the Italian economy, generating profits equivalent to about 7 percent 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 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,” the report said.

It estimated about 200,000 businesses were tied to extortionate lenders and tens of thousands of jobs had been lost as a result.

I don’t imagine collecting on the loans is a problem, though.

FILED UNDER: Economics and Business, Europe, Quick Takes, World Politics,
Doug Mataconis
About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010. Before joining OTB, he wrote at Below The BeltwayThe Liberty Papers, and United Liberty Follow Doug on Twitter | Facebook

Comments

  1. michael reynolds says:

    Yeah, they’re tough on bankruptcy.

  2. Bleev K says:

    Borrowing money from criminals? That’s unheard of.

  3. lunaticllama says:

    I’m sure shrinking the legal economy, while giving free money to bankers, is the best way to remedy this problem.

  4. Jenos Idanian says:

    I feel safe saying that they won’t ever beg for a government bailout.

    Demand, yeah. Simply take, sure. Extort, absolutely. But beg? Nah.

  5. mtnrunner2 says:

    That’s what happens when you ban legitimate activities, like high-interest lending, drugs, prostitution, and your government tries to control every aspect of life: you’re still stuck with the things you tried to ban, but now criminals are in charge of them. It would be funny if it weren’t so tragic.