Periodically, even on the front pages of major newspapers, the idea resurfaces that the public debt is not really such a serious problem because it could be subject to what is sometimes called an "orderly restructuring". Even if few speak openly about it, many, on the right and on the left, seem to believe, more or less consciously, that such solutions are possible or perhaps even desirable in order to free themselves from the hated austerity.
It is strange to say the least that these ideas often come from the same subjects who are riding the protest of a few thousand subordinate bondholders subjected to the bail-in regime or who consider Giuliano Amato unpresentable, a real enemy of the people because in 1992 he put a a one-off levy on bank deposits of 6 per thousand, a tiny measure compared to what would be needed today to "solve" the debt problem.
Indeed, it is quite evident that any restructuring measure should have an order of magnitude such as to reduce the stock of public securities, or at least their current value, by several tens of points of GDP. Otherwise, it would only generate the expectation of a new restructuring and with it massive and unsustainable capital flight.
It would therefore be an absolutely huge tax, never experienced before, which would cause the bankruptcy of the banks and a sudden impoverishment of millions of families, especially the elderly, who hold debt securities of the Italian state. In comparison, the set of all the "hateful" measures taken in the past, from Amato's levy to Prodi's eurotax, Monti's Imu, the Fornero reform, the bail-in of some banks would appear as a small thing.
Obviously the huge tax on the public debt would have the effect of drying up consumption and domestic demand, desertifying the productive fabric and generating new mass unemployment: the opposite of the end of the hated austerity, even without counting the further austerity measures that would claims by international creditors.
So it would be about an unprecedented and in any case very serious scenario. Greece in 2012 is not a useful precedent for understanding what might happen, for various reasons. First of all, the restructuring, which by the way did not solve the Greek problem at all and did not make it possible to loosen the grip of austerity, took place after the value of the securities had collapsed following the crisis and was therefore voluntary or semi-voluntary in nature.
Second, only a small fraction of the debt was held by households; the bulk was local banks, which were bailed out with Troika money, or institutional investors. Finally, and above all, since the outbreak of the crisis in 2010, taxpayers from other countries have taken it upon themselves to replace the markets, renewing all maturing securities and financing new deficits.
Nor are comparisons with the more than one hundred restructurings managed over seventy years by the IMF in emerging countries useful because they almost exclusively concerned the component of the debt in foreign currency, mostly held by non-resident financial institutions.
A "cold" restructuring in a modern society with mass savings is an experience that humanity still does not know.
Working in my imagination on such a reality, I would not think, as Marcello Sorgi does for example, of “Colosseo vendesi”, which all in all is an almost ordinary story. Thoughts would rather go to the veterans of the first post-war period and to Italy swept by the black brigades. Instead of veterans there would be savers betrayed by the state and a few million unemployed.
It would not be difficult to find in today's reality a few thousand balillas in the wake of a virulent populist leader among the many who infect us every day with their chatter against the Euro and against Europe.
