Over eighty-five billion euros. This is the interest expense on the public debt incurred by Italy in 2012. It is an "enormous" cost, as the President of the Republic's end-of-year message authoritatively recalled. It is a charge whose movements are correlated to the medium-term trend of the "spread". When the spread between the BTP and the Bund increases steadily, the overall cost of public debt also rises. And viceversa. The effects are, of course, delayed, as today's increase in the spread affects only new debt issues and not the entire stock. But, over time, the bill arrives at the cashier. The spread rises or falls for various reasons, internal and external to national borders. The origins of spread variations can be the subject of academic debates as well as political comparisons. The consequences of a variation in the spread consolidated over time in any case represent an objective fact that is always relevant for the repercussions on the situation and prospects of our economic fabric.
Analyzes by the Bank of Italy indicate that an increase in the spread of 100 basis points for ten-year maturities and 50 basis points for annual maturities reduces overall growth by around one percentage point over three years, and that it increases the average cost of the debt of 0,1 points in the first year, 0,2 points in the second and 0,3 points in the third. In addition, other things being equal, "an increase of 100 basis points in the yield spread between ten-year Italian and German government bonds tends to be reflected in an increase of about 50 basis points in the average rates on loans to businesses after a quarter, in full within a year”. In other words, two hundred points more of the Btp-Bund spread mean within a year a two hundred cent increase in the rates paid by companies to banks, a two tenth point reduction in GDP growth and an increase of around four billion in the debt burden of the Italian Republic. In 2012 the annual average of the spread between Btp and Bund stood at 390 cents.
If, on average in 2013, the yield gap between our securities and German ones fell by 200 cents, from 390 to 190, the savings for the cost of public debt could be significant, as could the positive effects on the change in GDP. Of course, the spread at 190 would not ensure recovery, but it would help reduce the extent of the further drop in product expected for the year we have just begun. A necessary condition, even if not sufficient to make the restart of growth less distant. The problem is that reducing the spread always depends on more than one person. Today it depends on the extra-European context, on Europe, and on Italy. In the non-European context, the new year opened with the comforting signal of an initial response to the problem of the American "fiscal cliff".
For Europe, the challenge is to meet the deadlines set by the plan prepared by the European Commission for the meeting of the European Council at the end of 2012. Work, in the first place, on the implementation of all the fiscal policy surveillance mechanisms envisaged by the Six-Pack and give life to the banking union through a unified supervisory tool. Make this planner without repeating the expensive stop-and-gos of the past. Give the merge completion path a steady pace. To achieve this, it will probably be necessary to obtain a "commitment", a stronger political involvement of national governments and, therefore, of the European Council.
Removing the risks of "stop-and-go", of steps backwards with respect to the progress achieved, also represents the challenge for Italy on the road to a reunion between recovery and recovery. Avoid, as unfortunately happened in the past, reversing the considerable improvement achieved on the front of the primary balance of the public accounts. On the recovery front, make choices that restore competitiveness and cohesion, investment and work. If read correctly, the signals that come from exports, from the internationalization of companies and from competitiveness itself are not all discouraging. From here you can start again.
