In the month, Prime Minister Conte lied to the Italians, Renzi and Zingaretti, what are they doing?

During the press conference in which Prime Minister Giuseppe Conte illustrated to Italians the content of the new coronavirus Dpcm (defined by many as something useless, ed), the Prime Minister responded to a question posed by a journalist about the possibility that The executive can draw on funds of the Month, the European stability mechanism that would allow Italy to obtain loans at subsidized rates.

In the month, Prime Minister Conte lied to the Italians, Renzi and Zingaretti, what are they doing?

Regarding the use of these resources, before the summer, we witnessed a real confrontation between M5, Lega and Fratelli d’Italia on the one hand, who press for the denial of the instrument “that would open the doors to the Troika” and Pd. with Italia Viva and Forza Italia on the other, who would like to have fresh capital to be able to combat the health emergency.

Last night, President Conte took a clear position for the first time, however, as many famous economic journalists underlined, the permier’s statements are somewhat questionable. Conte in fact said that “the money from the MES is loans and cannot finance additional expenses. Expenses already incurred can be covered in exchange for interest savings.”

That’s not true: lines of credit called Support for pandemic crises Born on May 8 precisely to finance additional expenses due to the pandemic crisis, this instrument aims to make available to each country an amount equivalent to 2% of its GDP (about 36 billion for Italy) with a single requirement: that the Applicant country agrees to use this credit line to support the financing of direct and indirect health care, costs related to the treatment and prevention of COVID-19. Therefore, healthcare costs can be financed with the Month whose lines Pcs it will be available for 12 months.

Conte also maintains that “since they are loans to be repaid, they would increase the public debt.”

The prime minister is thus incomprehensibly rigorous after having witnessed an exponential increase in the Italian public debt, given that the parliament has already authorized 133,000 million of new debt with the issuance of new government bonds. Not to mention, Italy has already applied for European loans from the SURE program and is preparing to apply for those from the Recovery Fund …

Would the ESM lead to new taxes?

In this sense, Conte argues that the opening of a line of credit from the Month would lead to “new taxes or spending cuts, because we have to keep the deficit (public debt) under control.” True, but the budget overrun is already worth nearly $ 200 billion thanks to the new snacks announced shortly before during the press conference.

Among the “excuses” is “the money from the Recovery Fund” which, however, will not be usable for the health emergency but only for the modernization of infrastructures for which it will nevertheless be necessary to use loans, or loans.

Conte also explains that “the advantage in terms of interest is now very limited”: to use the estimates of the Prime Minister himself, we are talking about 200 million a year, much more than what the Minister of the University was asking for.

“Technicians make the distinction between negative rates that affect three-year bonds, and they say that we should not consider negative rates up to three years, but at least the ten-year rates that are at 0.7%, however the advantage in terms of interest it is very content “. Conte rediscovers Antani, but ESM rates will always be lower than BTP rates. “

Conte and the Month and why it would be a stigma

The final masterpiece comes by defining the request of the Month as a stigma. According to the detractors of the use of the ESM, if the international markets saw Italy accessing the ESM funds, they would have the certainty that financially our country would no longer have the resources to pay the government bonds and no one would trust to buy public debt bonds . . If it is true that Italy has issued ten-year BTPs that places them at historic lows, it is true that this also occurs thanks to the quantitative easing programs of the European Central Bank, that is, the purchase of billions of securities of Italian public debt by the Bank of Italy with the authorization of the ECB. Furthermore, in the history of the 5 interventions of the MES, the stigma has never been seen and if there should be a leakage of the BTPs it will be because it increases the risk of default, not because we take loans at more advantageous rates.

Conte lied to the Italians when he finally affirmed that he did not have “ideological prejudices” and that “if we have cash needs, among the tools that we will have to consider is also the MES”: the ESM credit lines in fact would not cover the cash needs . Eligible expenses are medical care, not pensions and wages.

It remains to be asked why now Matteo renzi me Nicola Zingaretti They do not decide to make a strong decision, as announced at the beginning of this endless negotiation, which for now has ended in a tragicomic supercazzola on live TV. For now the leader of Italia Viva has chosen the line of realpolitik.

Mes, Gualtieri denies Conte (who retracts)

The Minister of Economy Roberto Gualtieri he intervened during the press conference to present the 2021 maneuver, explaining that the ESM would save interest, approximately 300 million a year for 10 years.

Prime Minister Conte himself returned to the topic explaining that there was “answered a question without saying that we will do this or this: there are the appropriate places and there will be an opportunity to talk about it“.

Article updated at 19:02 with statements from the press conference