Panetta Urges Global Debt Reform, Says Solidarity ‘a Necessity, Not an Option’

8 October 2025

By David Barwick – FRANKFURT (Econostream) – Banca d’Italia Governor Fabio Panetta on Wednesday called for renewed international cooperation to address unsustainable debt in low-income countries, arguing that solidarity was essential to global stability.

Speaking in Rome at a conference on cooperative financial institutions, Panetta said solidarity, justice and responsibility toward future generations were the foundations of resilient societies and stable economies.

“The debt of low-income countries is not a peripheral issue but a central global challenge,” he said. “Failure to act will leave 1.8 billion people behind, with consequences for global stability and justice.”

Panetta warned that debt burdens were diverting resources from schools, hospitals and infrastructure, and said restructuring must be paired with reforms to strengthen institutions and broaden tax bases. The G20’s Common Framework, he said, had been a step forward but suffered from “slow and uneven” implementation.

He urged greater transparency and faster action, as well as innovative measures such as debt-for-development swaps and climate-resilient clauses to suspend payments after natural disasters.

At the domestic level, he praised cooperative banks for their contributions to financial inclusion but said they must adapt to new challenges. Their small size and local focus limited diversification, he said, and they would need to embrace innovation while remaining faithful to their community mission.

Panetta said cooperation and solidarity “are not burdens but strategic investments” that underpin stability and prosperity. “Solidarity is a necessity, not an option,” he said. “Leaving almost two billion people behind is hardly a reliable foundation for stability and prosperity...”