Everything will play out in the next 10-12 days, from here to 8-9 December, when the highly anticipated new one will be held European summit. Either on that occasion Europe, after too many delays and guilty wavering, will really strike a blow, making the markets understand that it has the means and the political will to save the euro, or it will be the end. And in this second unfortunate hypothesis, the major American and Asian banks, which are already free to leave the eurozone, will once again prepare their intervention plans to manage the post-euro period. The alarm launched in recent hours by Moody's on the risk of multiple defaults captures the delicacy and danger of the moment and the state of war that is experienced every day on the markets for or against the euro.
Already tomorrow, in the Ecofin meeting in which Mario Monti will participate as interim Economy Minister, will serve to understand in which direction Europe is heading. But after Sarkozy's pressure on Italy (“Whoever strikes Italy strikes the single currency in the heart but you Italians do what you are committed to”), the horizon seems a little clearer, in the sense of a new Stability Pact that provides for more stringent rules and sanctions on state budgets and a step towards European fiscal union but which also includes the full participation of Italy, if it is able to respect the severe conditions envisaged which will have to take into account both the evolution of the deficit and debt and the prospects for growth.
The mechanism could be that of accessions of individual countries on the Schengen model. On the other hand, the hypothesis advocated by the Nordic countries of a triple A club (Germany, Austria, Luxembourg, Holland, Finland and for now France) seems to be losing ground, which would give rise to a sort of Super-Europe with the exclusion of Italy (but in perspective with problems also for France) and with the launch of a sort of two-speed Euro.
Much will also depend on Monti: in two directions. First in the ability to launch in the Council of Ministers of 5 December a package of emergency interventions and of initial reforms that demonstrate with deeds the concrete will to turn the page and regain control of the economic and financial situation, putting growth first as the main way to reduce the enormous mountain of public debt. And secondly by exercising an active role in Europe to make the renewed Italian credibility weigh by avoiding insidious conventio ad excludendum.
Tomorrow Monti will have to tackle again – in addition to defining the team of undersecretaries and participating in Ecofin – the examination of the markets with avery tricky Btp auction and there is no doubt that a loan, such as the one suggested and then denied by the IMF of 600 billion at a rate of 4-5%, would be useful as a bridging solution (although certainly not free) to ferry Italy on the road of reforms without the nightmare of Btp auctions. But it is said that it is the best solution and above all that it is the only one. It is no coincidence that it is supported more by France than by Italy.
The role that the ECB will play in this dramatic phase of the crisis will be decisive and only now even the blind see how important the Draghi presidency is, not because he is Italian but because he has the competence and credibility to manage complex cases such as this epochal passage of the crisis. Without waiting for the long lead times for a change of treaties and statutes, already today Draghi - in his autonomy - could, as in fact is rumored, announce an unlimited offer of liquidity for European banks in two or three years, close to the European summit which would finally restore oxygen to the world of credit and loans to the economy, businesses and families.
But a second move is also expected from the ECB after Monti will have guaranteed, with the maneuver of 5 December, a path of financial stabilization of Italy and that is the announcement of targets for the spread of government bonds beyond which he would intervene forcefully the ECB itself is unlimited. “But the thresholds – notes Federico Fubini today in the Corriere della Sera – will be high enough to oblige governments to do their part to lower returns anyway”.
In short, the path to save the euro and avert the darkest prophecies has been mapped out. It's up to Europe to do its part: now or never.
