Italy’s Banco di Roma Secures Special Status in Ethiopia
A Significant Diplomatic Coup
In a major diplomatic victory, Italy’s Banco di Roma has secured special status in Ethiopia, allowing it to maintain its autonomy despite the country’s integration into the Ethiopian Empire. The agreement, reached through negotiations between the Italian government and Emperor Haile Selassie, grants the bank an exception from the new banking law, which requires foreign banks to establish joint ventures with majority Ethiopian shareholding.
A Victory for the Italian Business Community
The development is seen as a major victory for the Italian business community, which had been seeking to maintain its influence in Ethiopia. The agreement also reflects the ongoing tensions between the central government and regional authorities over issues of autonomy and control.
Key Terms of the Agreement
- Banco di Roma will continue to operate independently within the Eritrean province.
- The bank’s existing privileges will remain intact.
- In return, the Italian bank has agreed to make informal payments disguised as commercial loans to the Ethiopian Crown and its local associates.
A Form of Tribute or a Necessary Concession?
The arrangement is seen by some as a form of tribute, similar to the traditional land of fixed tribute paid by other semi-independent enclaves across Ethiopia. However, others view it as a necessary concession to maintain good relations with the Italian government and ensure continued investment in the country.
A Blow to the National Bank of Ethiopia
The development is seen as a significant blow to the National Bank of Ethiopia, which had been seeking to consolidate its control over the banking sector. The bank’s governor, Menasse Lemma, had previously approached Banco di Roma to request adaptation to Ethiopian law, but was rebuffed by the Italian government.
The National Bank’s Response
Despite the setback, the National Bank remains committed to its goal of indigenizing the banking system and promoting local ownership and control. The bank has established a new Commercial Bank of Ethiopia, which will engage in commercial activities alongside foreign banks.
Broader Implications for Power and Influence
The controversy surrounding Banco di Roma’s status is seen as part of a broader struggle over power and influence within Ethiopia. The country’s integration into the Ethiopian Empire has raised questions about the autonomy of regional authorities and the role of foreign investors in the economy.
A Significant Development with Far-Reaching Implications
As tensions continue to simmer, observers are watching closely to see how the situation will unfold. One thing is clear, however: the fate of Banco di Roma has significant implications for the future of Italian investment in Ethiopia and the country’s relationship with its international partners.