At the start it appeared only the proposal of a neophyte in political economy, excited by his first appearance on television and not to be taken too seriously; Then Armando Siri has been appointed Undersecretary of the Ministry of Economy and Finance and therefore it must be given due attention. As undersecretary, Armando Siri landed on the pages of the most famous national newspaper: in the Corriere della Sera of 1 July 2018with the proposal "Bots and BTPs only for Italian families to stop the spread". Proposal which, at first sight, brings to mind, to those who have a minimum knowledge of the history of Italy, the famous and tragic "Oro alla Patria" in the "Day of faith" (wedding) which took place in 1935 of twenty years of fascism, the undersecretaries, whose words must therefore be considered with due seriousness and authority, in fact maintain that Italian families should buy back all the public debt securities (about 780 billion euros) currently held in the hands of foreign investors; Also this time assumed in the sovereignist vulgate as perfidious speculators who make the spread rise.
In order to achieve the result of this proposal, economic and financial logic would have it that, since expropriation measures of securities in foreign hands are not yet permitted, families and Italian financial intermediaries launch an equivalent (789 billion euro) public purchase offer aimed at all foreign holders of Italian public debt securities; in the hope that "foreigners" do not ask to join the offer at a price higher than the market price, given the urgency of the Italian state to restructure in a sovereign key its public debt.
But the story hypothesized by the undersecretary cannot end like this: even if risky, it would be too simple. In fact, all the public bonds held in Italian hands today and tomorrow would sooner or later expire in the various portfolios, leaving each individual investor with the option between abandonment and renewal. But the undersecretary trusts in love for the country, so that at the expiry date all the patriots renew, so as to reduce the spread: otherwise the entire operation will fail.
It should be added that, in line with the accounting obligations (sad but necessary), the complex patriotic restructuring of the public debt also involves the renaming (and the related international code) of the securities. For the sake of simplicity, it is proposed here that the new government bonds be identified with the following acronyms: BOT-FSS and BTP-FSS (i.e. BOTs and BTPs bought and held by act of faith in the Sovereign State), whose auctions would be remembered with similarities to the days of the “Gold to the Fatherland”.
The success of such days logically follows that all the public debt past and that of the new issue will be in Italian hands (which entails, in order not to fall back into the past, the closure of the borders to foreign capital wishing to purchase Italian government bonds. At that point, the next move is forcibly and consistently with the "Siri approach" for the reduction of the spread, it would be child's play for the Sovereign State: the consolidation of the Italian public debt: once called “Prestito Littorio”, consolidated in the XNUMXs of the Fascist era.
Japan has 250% debt but no one is crying out for default. Why'? Because those debts are investments capable of guaranteeing job stability and wealth! We Italians have thrown away those billions that make up our debt in consumption, in the financing of useless works, in patronage operations, in the abnormal costs of politics, in corruption and in bribes. That's why in Italy, with the debt at 130% (practically half of Japan) we are at a junk level.
Furthermore, if the state auctions BTPs to foreign investors at the rate they decide, it is obvious that we lose. Therefore it is more than right to try to remove the "tons" of BTPs from the hands of foreign speculators and re-distribute them within the country. Speculations would not be fed and we would not be so exposed to Spread blackmail. I don't see anything "twenty years" in it
Cavazzuti, do us the favor. Monti did the same too. The Italians earned a little while foreign speculators bought our BTPs at 70-80 and resold them 5 years later at 120. So the Italians gave Monti gold and received the same slightly polished gold. The speculators gave Monti ferrovecchio and received gold. It seems to me that you, dear Cavazzuti, are a bit in bad faith.