Jens Weidmann returns to stick Italy. In a speech given at the German embassy in Rome, the president of the Bundesbank underlined how the EU budgetary rules have been violated over the years by various countries, including ours: "The European Commission - he said - continually tends to compromise to the detriment of respect for the budget, for example by extending each time the expiry of the adjustment periods for states in a situation of deficit", with a reference to our country. The first country to violate the European budgetary rules was precisely Germany, whose deficit-GDP ratio exceeded the 3% ceiling without interruption between 2002 and 2005.
Furthermore, according to the President of the Bundesbank, it is necessary to introduce as soon as possible a new regulation which envisages coverage of capital by institutions and limits on the amount of bonds of individual countries held by a bank. Here too the disagreement with the Italian positions is clear. Weidmann instead promoted the establishment of the Atlante fund.
“To understand the architecture of our common currency – continued the number one of the Bundesbank –, we should reflect on the theory of the tragedy of the commons. The example is that of overexploitation of fish resources: overexploitation by a single fisherman reduces the availability of fish for other fishermen and threatens fish resources in the long run. Just as a high public debt can be attractive in the eyes of the individual country, however it is harmful for the Eurozone since it can lead to a rise in long-term rates for all states in the area”. If then the indebtedness threatens financial stability, the other Member States could be forced to assume responsibility for the debts of the State in question, "making the principle of liability fall". A clear reference to Greece, but also to Italy with a warning to the ECB not to be led by pressure to reduce "its mandate as guarantor of price stability in favor of a monetary policy aimed at guaranteeing the solvency of states".
Meanwhile, news arrives from Berlin that Mario Draghi has been invited to the Bundestag to explain (or justify) the low interest rate policy. The hearing in Parliament is set for 5 September.
