This year Davos feels more Italian. In many ways it is. The opening night was dedicated to Italy and this year Italians responded more prominently to the World Economic Forum.
In addition to Prime Minister Renzi and Minister Padoan, I see more entrepreneurs, institutions, representatives of the Italian economy and finance. The inaugural speech by the Prime Minister he spread a certain new enthusiasm for Italy in a crowded and curious audience. The premier spoke as a leader who was not at all intimidated or defensive, "selling" Italy to investors who seem willing to find good ideas to make the low-interest money they have available bear fruit. Renzi did not speak of the divisions of our country but of the visions that the government has for it and that the country can develop. Italy destination of museums and tourism but above all Italy of innovation, who is once again a leader in a Europe of high politics and not bureaucracy. Even if we want to think it's marketing, it's nice to think it is the right language for international marketsbecause that's what they want to hear. On the first day, government representatives took part in three panels, a sign of the great attention that Italy is once again attracting here in Davos.
There was no shortage of mea culpas especially for some still firm reforms of which the government is aware. In relation to the economy, the premier underlined how the increase in the dollar and the drop in the price of oil are two elements that favor Italian companies that export. Wind blowing the sails.
The stabilization of financial systems was the main theme addressed by Minister Padoan, who rather than as a minister spoke as an economist: damaged financial systems must first be repaired and then re-built, built again.
There's a lot of anticipation in the next few hours here in Davos, though the meeting of the Governing Council of the European Central Bank and for the words of Mario Draghi in the following press conference: today we will all be glued to the screens to await the decisions on quantitative easing. Yesterday we were surprised by the unusual advances on the size of the interventions, even if it is not clear whether they will be 600 or 1.100 billion euros or 50 billion a month.
Central will know if it will be a quantitative easing with strong mutualisation of credit risk. This would be positive news for the Euro and for the construction of Europe, and could lead to a further reduction in the Btp/Bund spread. If this does not happen, i.e. if there is partial or lower mutualisation than the market expects, the impact could lead to investor distrust, with a spread that could widen. Germany is reluctant towards the first solution, he is afraid of sharing the risk of buying government bonds with other countries having already completed, in his view, the structural reforms and awaiting the reforms of others. The decision of the ECB will be voted by majority, but let's not forget that Draghi cannot fail to take into account, even minimally, the influence of his first shareholder.
