No one in our Government, apart from Minister Triaseems to be interested in the trend of the spread of Italian government bonds against the German Bund. And yet for the tenth anniversary we are back close to guard levels, as the difference between the two securities is now between 250 and 260 points so that our BTPs now yield around 2,90-3%.
The difference compared to the other main European countries is also becoming very noticeable. Portugal, for example, has a spread of 160 points so that the yield on its bonds is 1,90%, i.e. well one point lower than ours. Spain is doing even better since its spread is just over 100 points and therefore the yield on its bonds is around 1,30%. France, which also does not have a very brilliant economy and public finances with some imbalances, has a spread of 0,40 points and therefore its ten-year bonds yield 0,70%, ie more than two points below ours.
Many among the grillini and pentastellati, in addition to railing against speculation orchestrated by enemy governments or greedy bankers, believe that the spread is just fluff and that its level has no consequences on the real economy. In reality, the spread is the thermometer of the degree of confidence that Italian foreign savers have on the prospects of our economy and on the government's programmes. At the moment, uncertainty is high and not a day goes by without some savers, even small ones, turning to their bank to look for a safe haven for their nest egg. So the Italian bonds are sold and the more reliable bonds of foreign states or solid international companies are bought.
This distrust leads to the request for higher interest rates to compensate for the risk of buying Italian securities. And this rate hike affects, and how, the real economy both directly and indirectly. In fact, on the one hand, bank rates are also adjusting to the increase in spreads and therefore loans to businesses and households will be more expensive, curbing both investments and consumption, while on the other, the burden that the State must pay on its own will increase debt for a figure that for next year, if rates were to remain at current levels, would be around 4 billion Euros. Consequently, public spending should be cut in the part that concerns services to citizens in order to be able to pay the debt burden. And it will certainly be more difficult to bear new expenses such as the basic income or the flat tax.
This rate hike, which for now only affects Italy, adds up to other negative events such as the war on tariffs or the rise in oil prices, for which most of the forecasting centers are already forecasting a certain slowdown in the economy whose dynamics should stop well below the 1,5% initially hoped for.
This situation should induce the government to concentrate its action on supporting the economic situation through reforms capable of increasing competitiveness and measures to contain the public debt in order to keep interest rates low. But none of this is happening. And certainly President Conte's generic statements on the sustainability of our debt cannot be enough while his deputies Di Maio and Salvini insist on public spending policies, restrictions on market freedom, and protection from the "invasion" of foreign goods through duties. The beauty is that the artisans (many of whom are strong exporters) applaud the threat of introducing duties (which in practice means leaving the EU) without having thought carefully about how much they would lose by losing a significant part of their foreign markets due to inevitable retaliation from other countries. And do the industrialists, especially those of Lombardy and Veneto closely linked to Germany, have nothing to say in the face of the adventurist policy of this government?
The government continues to feed the illusion that anything can be solved by printing money. To do this, we would have to leave the Euro. And in any case, printing money without control pushes the country not towards development (as they believe) but towards high inflation, a loss of value of savings (which in fact are fleeing) and a reduction in the spending power of those who live on income fixed. But the spread is already a wake-up call. The government should quickly change course, otherwise citizens who today seem enchanted by easy promises risk facing a rude and painful awakening.
