LA CANNATA: “DON'T PANIC. ITALY CAN DO IT”
PASSACANTANDO: WITH A GROWTH OF BELGIAN DEBT BELOW THE GDP
The increase in government bond yields will not have "major impacts on Italian public finances" as long as "this disturbed environment" does not last too long. Words from Maria Cannata, Director General of Public Debt at the Ministry of Economy, who chose the AIAF (Italian Association of Financial Analysts) conference to take stock of the situation after a terrible summer and coinciding, fortunately, with the start of a new political phase. Italy, said Cannata, is facing a difficult but not new or impossible task. First because "despite everything the latest auctions, as regards the absorption of demand, went well". "In 2009 - he commented - we issued 530 billion euro of BTPs, the following year we placed 480. Next year we will issue government bonds for 440 billion, a level that seems absolutely prohibitive but which in reality is not And". Furthermore, on the basis of the latest Istat estimates, the debt-GDP ratio will be 120%, perhaps even – added Cannata not without irony – 119,9%”.
In short, the situation has not yet gotten out of control. But there is a risk given Europe's impotence to give convincing answers. “The cost of debt and market confidence is not just a problem for Italy but also for Europe”. In fact, the contagion has spread, also affecting triple A European countries. This is because “there is a problem of credibility for the Eurosystem and we must speed up and be more courageous with more decisive measures. But for these measures, an agreement between many is needed and this takes time: democracy leads to slowdowns that are incompatible with a crisis that has lasted a bit too long".
”A mechanism has broken down – is the summary – which saw government bonds as a safe haven. It is a damage that will take a long time to repair”. It was Great Britain who benefited from it, to which Europe “is giving a big gift. THE
Sterling bonds are now appreciating. But our English colleagues are also worried about volatility”.
That said, “one thing that makes me suffer a lot – confesses the manager of via XX Settembre – is the juxtaposition of Greece to Italy which we often hear about in the press and on television. These are two completely different realities between which there is an abyss from the point of view of the economy, of the fundamentals, of the recovery capacity”. "We must talk about the problems - concluded Cannata - but not only about the problems because otherwise a general climate of distrust is generated, people get scared and entrepreneurs don't invest".
In recent weeks, the outburst of the woman who operates from the trenches of the third largest public debt on the planet has ended – “an atmosphere almost of panic has spread. But fear is almost always a bad advisor and makes people do the wrong things”.
A reminder of the optimism of the will also comes from Franco Passacantando, central director of Bankitalia who illustrated the strategy of via Nazionale to face the threat of the credit crunch. In the Italian credit system
"We know that there are institutions that have abundant liquidity and others that have deficits - he said - Bank funding is therefore in a difficult situation, but there are still margins". Bank of Italy, to counter the liquidity crisis, has made available to Italian banks another 100 billion euros of eligible assets to be financed by the ECB in addition to the 106 billion already allocated previously.
But, beyond the contingency, the problem is to grow again. "In the Bank of Italy we have done a simulation - he concluded - If the Italian economy in recent years had had the same growth dynamics as Belgium today our public debt would be well below 100%".
