In his information speech to Parliament, President Conte, having to navigate among the rocks scattered along the route by its majority and wanting to dodge the daily bombardment of the opposition with arguments that are easy to grasp by the people, it was vague and ambiguous so as to try to leave all doors open. The key passages of his speech, peppered with the usual anti-European complaints, are two: on the Mes said that work is being done to avoid any present and future conditionality, e on eurobonds he revealed that there is also an Italian proposal on the table, but that he is also fine with those of the president of the Commission Ursula von der Leyen, France and Spain. In short, for Conte it is important that on Thursday the Council of EU heads of state and government launches a common instrument to finance Europe's exit from the recession. It is a question of setting a precise political direction as early as Thursday and then in a short time the technical details can be finalized.
The markets above all they grasped the political difficulties facing the government and reacted by pushing the spread over 260 points, while share prices recorded further declines.
It's not just the government's fault: it is the confused Italian political situation that undermines confidence and therefore turns market expectations on the fate of the Italian debt negative. The absurd controversy over the Mes in fact hides the increased strength of the anti-European party and of those who explicitly aim to leave the Euro. The conditions for staying in the EU, Salvini and Meloni clearly state, can be summed up in the word solidarity, which according to them means free transfers of resources from rich countries to the most disadvantaged ones, Like Italy. And mind you, these gentlemen would like a transfer without conditions, so that Italian politicians decide how to manage these resources.
Around this claim, the Northern League are entangled in many hypotheses, all bizarre. Some say that we must not fall into the trap of the money offered to us by Brussels because then the European bureaucrats will want to check how it was spent. And in any case, it is money that we will have to repay by loading a very heavy load on the shoulders of our children and grandchildren. So some Northern League colonel finds the courage to go on TV to say that it would be better to ask the Italians for a loan for reconstruction which, in his opinion, would be so patriotic as to grant it at very low rates and perhaps with a hundred-year repayment. Beyond the rhetorical fuss, this means that the Northern League wants to take possession, by hook or by crook, of a slice of the savings of the Italians.
Just as the sovereigns are spreading the fable that if we had the lire we could print it at will and thus all our problems of both public budget and private income would be solved.
Since these are patently absurd tales, one wonders if the Northern League and Melonians, from the leaders to the militants, really believe in what they are saying or if it is a ploy to throw up the Italian system and therefore easily take power over the rubble of the system. The trouble is that some professors who associate with these parties are truly convinced that Italy outside the Euro would enjoy an advantageous position and would recover its past prosperity.
It's an easy narrative. It doesn't require sacrifices to people or a stretch of the imagination to plan the future and to adapt our rules to the needs of change. To get money from Brussels on specific projects, you need to have the ability to make concrete and effective proposals. But if we can't even spend the funds from the cohesion program that have been assigned to us, how could we draw on the portion of the 1.500 billion fund that we want to set up?
All caught up in these controversies about the Mes and Europe, we neglect to delve into the issues on which the recovery of our economy will really depend. In the emergency we will have to find more effective systems of support for businesses and citizens who are temporarily out of work. For companies, the provision of liquidity through the granting of credit is not enough; a system is needed that strengthens their capital structure, without going towards generalized nationalization which, as we saw in the recent round of appointments, would give politicians of huge and inefficient allotment. There is on the ground a proposal from Assonime for the creation of a fund capable of strengthening the capital of companies ed a proposal by the former minister Tria and by prof. I scan which proposes to give a public contribution to companies that can demonstrate that they have lost a significant share of their added value. And it's not a matter of resources.
What has already been allocated by Brussels is sufficient for this first phase. Furthermore, drawing on the Mes and other funds would ease the pressure of our securities issues on the market, contributing, together with the ECB, to keeping our interest rates low, which are a crucial variable for us. Let us recall what happened in 2011 when Berlusconi let slip the spread.
Once the emergency has been overcome, a strategy is needed to improve the competitiveness of our system who, even before the pandemic, was not in good health. It will be necessary to make investments, accompany the reconversion of part of the productive apparatus, improve schools of all levels, reduce the weight of the PA, and create a stable and reliable legal system for businesses.
And this is a fundamental step to consolidate investor confidence in us. If, as now seems probable, we will have a debt/GDP ratio of 160% or more at the end of the year, then yes, if in the meantime we have not developed the right tactics and a credible strategy, we could go through some bad times.
The most impressive thing is this: in Conte's speech not even a word was dedicated to this perspective. We go on day by day and seem unaware of the difficulties we will face. And these are not obstacles that are impossible to overcome. You just need to have the right equipment.
That is, let me understand since the currency is created out of nothing without any upstream cover if we borrow it from abroad it's fine if we print it ourselves with our Bank of Italy and without debt to the bankers it would be a drama ... Blessed logic
Given that I fully share the contents of the article, I was wondering if a serious political discussion on the sources of state funding would not be more constructive, i.e. if it should be only tax revenues and recourse to the financial markets, or if, with limits and rules to be established, it is clearly agreed on the need for an even very important intervention by the Central Bank of issue, i.e. "to print money". Which is what Spain is proposing, I think.
Exactly the opposite of what was decided in Italy in 1981, with the Government-Bank of Italy divorce
However, it seems clear to me that a monetary policy of this type should refer to a single institutional political power. Which is not in the EU. This is the real problem, not the choice between Euro or Lira.