They would increase the public debt, they would not work as money and they would not even be real government bonds. But then, what would they be for really the minibots? Despite the distancing of the undersecretary to the Prime Minister, Giancarlo Giogetti, the League has by no means abandoned the project of launching these small paper titles (from 5 to 100 euros). Basically, the State should use them to pay off commercial debts, while citizens could spend them to pay for public goods and services (from taxes to train tickets).
In recent weeks Claudio Borghi, economic manager of the Carroccio and father of the minibots, has produced many explanations on the nature of this new tool, but the fog remains thick. To clarify, we consulted Giovanni Ferri, full professor of Political Economics at the Lumsa University, formerly at the Bank of Italy and the World Bank.
Professor Ferri, Borghi says that minibots would not increase public debt, while Draghi and Visco argue the opposite. Who is right?
“Commercial debts do not fall within the definition of public debt. Thus, by issuing minibots, the State would transform commercial debts into actual debt. That is, it would harm itself, because it would bring out further public debt ».
If currencies parallel to the euro weren't illegal, could minibots work as money?
«The problem is that the minibots would have a face value, that is a nominal value, but they would not be fully expendable. So whoever received the minibots would have to find someone to buy them for them. And the price would be less than the face value, so with an exchange rate of less than par. That's why minibots can't function as currency. The currency must be exchangeable at par: 100 euros are 100 euros, they cannot expect me to give 100 euros to someone to receive something of a lower value in exchange».
Instead, as government bonds, would minibots be useful?
“Unlike real Treasury bills, minibots would have no maturity or interest. So one could say that in reality they would not even be real government bonds, because they would never be repaid".
But then what are minibots really for?
«Some have hinted that they could help Italy slide towards an exit from the euro. This is a hypothesis that I don't want to consider as reliable, but certainly even just worsening relations with the European Union and the ECB is a very bad idea".
If Italy printed minibots, what would happen on the markets?
«It would be a sign of a further drift towards a possible exit from the euro, a possible Italexit. This would mean that Italy would immediately pay even higher interest rates on the markets. And the reassurance, which the Government would certainly give, that it is not a step towards leaving the euro, but simply an internal operation to settle commercial debts, would be useless. The Italian markets, investors and savers would welcome the arrival of minibots as a further sign of danger. By now, on an international level, Italy is looked at like Argentina twenty years ago».
