By “March if not February” it will be launched a new Italian debt security intended for savers and placed directly online. This was announced today by Maria Cannata, director general of public debt at the Ministry of Economy, during a hearing in the Budget Committee of the Chamber.
The new bond “will not be a three-year bond – continued Cannata -. We are still defining the technical characteristics”.
As for the next placements, “we have to hold on these three months, show that we are able to handle the difficulties. It's a bit of a fight against everyone, but I hope we'll make it. The market is in great need of good news”. But if the next three months are exceeded, "the appetite for Italian paper will return", because "the situation of the Italian public debt is not explosive, it remains under control, even if it certainly does not improve". In short, “concerns about debt sustainability at current interest rates are decidedly excessive, especially now that the yield curve has largely normalised”.
MORE SHORT-TERM AND BOT ISSUES IN THE FIRST MONTHS OF 2012
Cannata then explained that in the first few months of the year “shorter-term issues, Treasury bonds, commercial paper and bonds up to three years will certainly be increased, to more easily manage the renewal of maturities”. However, "already from the second half of the year it will necessarily be necessary to try to return to a more uniform distribution along the yield curve, to avoid that the shortening of the debt life, which stood at 7 years at the end of the year, remains modest and can be resumed as soon as possible with the ordinary policy of consolidating the debt structure”.
The increase in overall gross issues in 2012 "will be modest after all: compared to 432,378 billion in 2011, the Treasury will have to issue around 450 billion this year, an amount lower than the total annually issued from 2008 to 2010".
PAY PAYBACK OF PAYMENT DEBTS WITH GOVERNMENT BONDS
Meanwhile, the idea launched by the Minister of Economic Development and Infrastructure, Corrado Passera, of repaying public administration debts with government bonds continues to make headway. “It's true, there is this hypothesis”, confirmed Cannata.
ALMOST 200 BILLION BOND PURCHASES FROM THE ECB
But the main aid to the state coffers still comes from Frankfurt. “The ECB intervened consistently in August and then reduced a lot in September – explained Cannata -. The amount committed is substantial, certainly above 100 billion, and perhaps close to 200 billion".
DOWNGRADE S&P EXCESSIVE, NEED AN INTERNATIONAL AGENCY
The decision by Standard & Poor's to cut Italy's credit rating "it has been judged by many investors and analysts as excessive and inconsistent", underlined the Treasury executive again, reiterating that "too much weight is given to the evaluations" of the rating agencies.
To calm the climate, the creation of "a truly international public agency" would therefore be appropriate, because "States should not be judged by private subjects". However, Cannata does not believe that the solution is "a European agency, because it would be seen as local and in any case partisan".
