It was the years 1980-1983, the government was led by Giovanni Spadolini (which succeeded one of the many Andreotti governments) and the Minister of the Treasury was Nino Andreatta. In those times of flexible exchange rates, the lira continued to devalue against the German mark, nearly 600 lire per mark; interest rates on CCTs fluctuated between 19 and 20%, as did those on BOTs that also fluctuated between 19 and 20%. For its part, interest expense amounted to around 5-6% of GDP, against the stock of public debt equal to around 60% of GDP itself. The bank rates applied to customers were around 18% with peaks of 20% in 1981; inflation reached 20-21%.
In this context, Minister Andreatta addressed the Governor of the Bank of Italy Carlo Azeglio Ciampi directly and without political and/or partisan mediation due to any government contract, writing to him on 12 February 1981 that "I have the opinion has long matured that many problems of monetary policy management are made more acute by an insufficient independence of the conduct of the Bank of Italy with respect to the financing needs of the Treasure". The Governor of the Bank of Italy Carlo Azeglio Ciampi he replied with a letter dated 6 March 1982 declaring that he "was substantially in agreement" with the proposed line of action. Since then the interest rate to be paid subscribers of government bonds it responds to the market laws of supply and demand of securities and their assessments of the convenience of such an investment.
In the specific case of public debt, the most important condition is the degree of confidence that investors have in the ability of the sovereign state to repay the bonds upon maturity as well as to pay the interest rate resulting at the time of the placement auction. Since then, despite the abnormal growth of the Italian public debt, Italian and foreign investors have always shown confidence in the Italian state, as evidenced by the progressive lengthening of the maturities of government bonds (currently around six years). The certainty that the governments that have followed one another since then would always have operated with the due flexibility and energy to keep Italy in compliance with the treaties and exchange agreements gradually signed until entry into the euro and therefore in the regime of fixed exchange rates it has contributed to the progressive reduction of interest rates in the long run and to achieve, in this way, the best control of expenditure for interest expense. In some cases it was necessary to adopt costly and unpredictable fiscal policies due to the collapse of confidence in the ability of governments to service public debt.
Today exaggerated sovereignty, in view of the forthcoming European elections, boasted without interruption by the yellow-green coalition, rather than populism stuffed like a Christmas turkey with unfeasible proposals, is forcing the Treasury towards a de facto divorce with the entire European Union. Circumstance which, in the growing distrust of domestic and international markets, would in fact make it impossible for the Italian sovereign state to honor its public debt, even in the short term; to stop the flight of capital abroad; to continue extending debt maturities; to continue to convince savers not to seek security in the new liquidity obtained by not renewing the public securities held in the portfolio upon maturity; as evidenced by the recent disaffection for the BTP.
A violent financial destabilization would ensue; if anything fueled by the unfortunate words of those who regret the lira or hint with dangerous puns, to the possible cancellation of the public debt, as if this could suddenly disappear in the face of the wealth of the Italians. Bringing the term "consolidation" back into the narrative should be a lexical obligation for some of the most hilarious singers of the government contract, of its vaunted rigidity, which instead makes measures impossible in the face of the changeable conditions of the internal and international economy. Singers of the incomprehensible budget maneuver. Incomprehension also due to the lexicon that is never minimally technical but always and only political narrative from an electoral campaign, but which is perpetually used, never finds a counterpart in normal discussions of economics and finance that require even minimal technical language.
In the face of such narrative babel, it should be remembered that it is however true that in the history of Italy the State has not always respected the commitments made with savers: as happened in 1926 when Mussolini, in order to achieve monetary stabilization, authorized by decree law on 6 November 1926, the issue of the "prestito Littorio", first announced in his speech in Pesaro on 18 August 1926, which imposed the immediate conversion into securities with no maturity date of the five-year and seven-year maturity bonds, the stock of which constituted approximately a quarter of the public debt at the time. It was an unfortunate important step to achieve sovereignty and economic autarchy and Italy's isolation from the rest of the world. Just as it could happen when the current de facto divorce between the Italian Treasury and the European Union were to turn into a legal divorce, this time by amending the government contract.
