The reception of the financial markets towards the "Juncker Plan" and, above all, the "Quantitative Easing" program of the European Central Bank (ECB) has been positive, but the way in which these projects will translate into practice is by no means obvious nor if all the countries of the Union will benefit from it in the same way.
1. Juncker Plan
The "Juncker Plan" provides for the establishment of a European Fund for strategic investments, the EFSI, which will start operating on 5 June with an initial endowment of 21 billion euros. In the estimates of the Community legislators, this shock mass should represent a driving force for private financing and activate total resources for 315 billion, of which 240 intended for financing long-term investments (in infrastructure, transport, research, energy) and 75 billion to financing for SMEs. A significant part of the private financing capacity could come at the European level from the insurance sector. The EFSI will select the projects to be financed and so far around 2.000 have been identified at the continental level for a total value of 1.300 trillion. In the coming months we will move on to the executive phase and each country will obviously try to attract the greatest resources to its own territory. The premises, for Italy, are not positive. Last December, a special task force made up of the EIB, the European Commission and the Member States published an initial list of 44 potentially eligible projects. The list is not exhaustive nor does it limit the final choices but it is representative of the selection criteria that will be used. Well, only 4 Italian projects appear in the list, one of considerable dimensions relating to the restructuring of schools (8,7 billion), and three others of smaller dimensions (between 170 and 480 million euros) concerning funding for the Italian electricity integration in the single market, for a European biomolecular research network, for incentives for high-tech industrial production. But the list does not include, for example, the strategic plan for Italian broadband which was also included in the list of projects presented. The concrete risk is therefore that Italy will not be able to use not even the resources contributed to set up the new European Fund for the modernization of its infrastructure network. Improving the quality of projects will prove essential not only to enable them to pass selection but also, and above all, to attract sufficient private investment. At stake are also the insurance companies which obviously follow what is happening with interest but which, in the absence of a certain and reliable picture, could give up intervening or decide to finance projects in other areas of the continent where the conditions of investment are more favourable. This is what happened in the past for project finance plans and could also be repeated in the future for the new European Investment Fund. In order for the plan to be able to channel investments into activities that support the real economy effectively and in the general interest of the country, it is desirable to encourage savers - also from a fiscal point of view - to invest in the categories of projects proposed by the Juncker Plan same in paragraph 2 of the art. 5 (Conditions for using the EU guarantee). In particular, these are projects aimed at achieving the following objectives: i. development of infrastructures included in the transport sector, especially in industrial agglomerations, in the energy sector, in particular for energy interconnections, and in the digital sector; ii. investments in education and training, health, research and development, information and communication technologies, and innovation; iii. expansion of renewable energy, energy and resource efficiency; iv. infrastructure projects in the fields of environment, natural resources, urban development and society; v. financial support to companies with up to 3000 employees, with a particular focus on small and medium-sized enterprises, including in the form of venture capital financing. We are sure that a strong incentive to invest in national projects could arise from measures of this kind. For this reason we have proposed, first of all, to apply the categories of the "Juncker Plan" to the decree provided for by article 1, paragraphs 91 and 92, of the law of 23 December 2014, n. 190 (“2015 Stability Law”). In order to mitigate the tightening of the taxation charged in particular to supplementary pension schemes, in fact, starting from the 2015 tax period, the possibility of using a tax credit equal to 9% of the accrued net result is envisaged provided that an amount corresponding to the accrued net result is invested in "medium- or long-term financial assets" identified by the aforementioned decree. It will then be necessary to think about how to extend the tax incentive – for now guaranteed to members of pension funds – also to savers who through insurance policies or other instruments decide to invest in the Italian economy in the medium and long term. In doing so, it will be easier to achieve the leverage effect necessary to achieve the objectives of the Plan and ensure Italy a substantial share of investments.
2. "Quantitative Easing"
An even greater impact is expected from the "Quantitative Easing" announced on 22 January by the ECB and aimed at further reducing the cost of loans for businesses and households, in a context characterized by the spread of dangerous deflationary tendencies in the euro area. The program envisages the purchase of securities of European and government institutions, in addition to those, already launched in recent months, of securitized bank loans (ABS) - limited to the senior tranches and, if backed by adequate guarantees, mezzanines - and covered bonds. Monthly purchases of securities for €60 billion are expected from next month (March 2015) until, at least, September 2016 and in any case until the price trend converges towards the objective of 2 per cent in the medium term. In practical terms, the distribution of monthly purchases, according to estimates by Unicredit researchers, should be as follows: 45 billion in national public bonds, 5-10 billion in private securities (securitized and guaranteed) and the rest in bonds of European institutions supranational. Focusing attention only on private securities, if Italy were the recipient of 15 per cent of the flows, we could imagine fresh loans coming from Frankfurt (remunerated with rates close to zero if they were only the senior tranches) for a value between 750 million and 1,5 billion a month. The ECB has so far purchased (between October 2014, when the program on private securities started, and 13 February 2015) 3 billion euro in ABS and 46 billion in covered bonds. As stated by the Institute itself, this is a much lower rate than expected, especially for ABS; this is mainly due to the fact that there are no such titles in circulation. Unfortunately no Italian securitization operation has so far been led to the purchase of the ECB. It seems to us a great wasted opportunity. There have been various proposals, aimed at securitizing performing bank loans, at segmenting them into tranches as well as, also thanks to a State guarantee on the mezzanine tranche, at 8 obtaining benefits for the operators involved and, above all, for the companies that could enjoy more funding. By structuring operations, banks could free up regulatory capital and would see the possibility of granting new loans to businesses increased. Institutional investors (including insurance companies) may be interested in buying securities to improve the yield and composition of portfolios, which are currently very concentrated in government bonds. However, the interest of the insurance companies will only be realized in the presence of a high quality of the new "card" offered on the market, of an appropriate framework of guarantees, of a return that allows the commitments undertaken with customers to be satisfied, of a sufficient level of product standardization and transparency on underlying credit portfolios. It is therefore essential to act promptly, making the offer of Italian securitized securities attractive for purchases by the ECB and also attractive in the eyes of Italian and foreign institutional investors.
