NEWS

Italian Mafia is Europe's Number One Business

By Matthew Harwood

The global recession may have hit Europe hard, but there's still one business that's thriving in these lean economic times: Italy's organized crime syndicates.

The Italian mafia's revenue for 2008 jumped 40 percent, reports Bloomberg.com.

Sales increased to 130 billion euros ($167 billion), up from 90 billion euros in 2007, according to figures supplied by Eurispes and SOS Impresa, an association of businessmen to protest against extortion. Drug trafficking remains the primary source of revenue, bringing in about 59 billion euros, and the mafia earned 5.8 billion euros from selling arms, the Rome-based research group said today.

“Studies show the criminal market never suffers during a crisis," says Roberto Saviano, author of the best-selling Gomorrah, the story of the Camorra crime bosses . "I’m convinced that this crisis is bringing huge advantages to criminal syndicates.”

The Italian mafia also relies on its tried and true profit generating scheme: the protection racket. Eurispes estimates that the mafia drains away 6 percent of Italy's GDP through extortion. That's 92 billion euros a year, 250 million euros a day, and 10 million euros an hour, according to Saviano.

As former editor John Barham pointed out last year, revenues such as these are nothing new.

However, a report (available in Italian) from Confesercenti, Italy’s association of small businesses, says crime syndicates have never been more powerful—or more profitable. Confesercenti, a small-business association, estimates that organized crime posted aggregate revenues of €90 billion ($128 billion) in 2006, a sum equivalent to 7 percent of Italy's GDP. Confesercenti's researchers calculate that these gangs took in about $106 billion in 2005.

Bloomberg reports that Confindustria, Italy's association of small businesses, pursued aggressive policy to throw out any member that pays protection money, known as the "pizzo," may hurt the syndicates' profits.

But David Lea, western Europe analyst at London-based Control Risks, told Barham  that the campaign working is just wishful thinking.

"The campaign against the pizzo took hold of public imagination," he said, "but it seems to have completely run out of steam after shopkeepers started to get threatening messages left on their shutters."

And from the recent estimates of the mafia's 2008 revenue, Lea's analysis seems spot on.

 

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