“The ECB has done and is doing everything it can: Draghi's move surprised me not on the merits, but on the timing. We didn't expect it to happen so soon, but it's better this way." To the chorus of acclaim for ECB-day, which arrived just on the eve of the traditional Ambrosetti workshop underway in Cernobbio, is also added that of one of the many protagonists of the financial world present on Lake Como: Giovanni Bossi, CEO of Banca Ifis, institute from the North-East which makes factoring and interaction on social networks its strengths, and which saw its net profit grow by 13,7% in the first half to over 50 million euro, with half of the current workforce hired during this period.
As a seasoned banker Bossi gives his personal point of view, which goes beyond the rate cut. “I don't want to say it but indirectly, in my opinion, the ECB's objective, as well as cutting rates to allow banks to get more money into the real economy, was – unofficially but in intention – to weaken the euro ”. Since Draghi spoke, the single currency has in fact fallen steadily below $1,30, to its lowest level for over a year and according to many, including Roubini, a downward trend could begin that would bring it down to $1,20. “Which really, and even before evaluating the effects of the banks' moves, will give a boost to growth. For three reasons."
“The first – explains Bossi – is known: a weak euro will boost exports throughout the eurozone, including the German one which has also slowed down. The second is that this will drive up the prices of imported goods, favoring domestic production. The third is that a part of imported goods, such as energy and commodities, is incompressible and is denominated in dollars, therefore its importation is in fact an inflationary import”. Inflation which, with deflation at the door, would be a panacea: "Real GDP, as unfortunately continues to happen in Italy, would remain unchanged, but the nominal one with a dollar at 1,20 could rise by 2%, which would allow the debt public at least not to go up”.
Thus favoring investments and reforms, currently hampered by budgetary constraints. But Bossi is a fan of the inflationary trend and looks even further: "Let's assume a highly unlikely scenario of inflation at 6%: in 3-4 years the debt would fall to 100-110% of GDP, the BTP-Bund balance would be guaranteed and in 10 years we too would be in the threshold of 60%”. However, the target set by the ECB is 2%: "I say that a 4% target would do the peripheral countries very well, and for this very reason Germany says no, because it would mean helping countries which, according to current standards, have not done enough sacrifices".
And the banks, revitalized several times by Mario Draghi during his mandate, what role can growth relaunch play? “Lower rates are a technicality to push banks to use the Tlter. Something that until recently might not have even suited a bank like Ifis, but we'll be there next time too”. The most important thing is therefore not the rates but the Abs: "The Abs are nothing more than Qe in a European sauce: we are talking about 1.000 billion euros, a considerable figure".
A big favor to politics in difficulty, therefore. “Now it's definitely up to politics – admits Bossi -, the priorities are the ones we have always known: tax authorities, justice, work. It seems to me that Renzi is working in the right direction, at the moment I feel like promoting him. But I emphasize: at the moment”.
