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Are those who define the assessments and proposals of David Sassoli and Enrico Letta on the health sector and improvised public debt fully aware of the economic and public finance prospects of the eurozone and Italy with ‘unchanged policies’? Have you had a look at the European debate? Finally, do you know the article published by the Delors Institute in Berlin?
The public debt of most euro states, due to the collapse of the economy by an average of 10 percentage points, has jumped well above 100% of GDP, in a scenario of zero inflation and modest growth, beyond the expected rebound. The closures imposed by Covid have been overcome, given the end of the mercantilist route promoted for a quarter of a century by the United States.
In this context, to reduce the weight of public debt, the only alternative to Sassoli’s proposal to sterilize, not cancel, the State Bonds acquired by the national Central Banks within the framework of the Asset Purchase Program and the Pandemic Emergency Purchase Program. on the part of the ECB, it is the formal restructuring with the inevitable and very serious consequences on the banking system and the real economy. Tertium non datur.
Measuring the mountain of debt to climb, aiming for a primary balance above 4% for a very long period would be, in addition to being totally ineffective on the public debt side, devastating for the economy and social stability. It would make promises to reactivate the National Health Service and public schools, rediscovered as decisive “thanks” to the pandemic, ridiculous and irritating.
The failure of the Monti operation, attempted in a much better context than the current one, should teach something. It is necessary to consolidate the intervention of the ECB.
The ECB, without statutory changes, without actions in the European Council, in the Strasbourg Parliament or in the national parliaments, simply because of its mandate as guarantor of the survival of the euro and the inflation target, can do it.
The objective is not the cancellation of the Securities acquired by the national Central Banks, but their perpetual refinancing, that is, the perpetual repurchase at maturity, therefore without consequences on the financial statements of the Central Banks themselves and of the parent company in Frankfurt. The very modest interest expenses that would continue to be paid by national budgets would be returned, to a large extent, to the Treasury of each state as a profit of the respective Central Bank. A common sense solution: A mainstream economist, fully credentialed in our establishment, like Carlo Cottarelli, explained it well in La Repubblica, after hundreds of leading academic economists, but less mainstream and less spoiled by the media. We have been invoking for months, in addition to a few parliamentarians excommunicated as populists, sovereignists and anti-Europeanists (the undersigned has insisted on proposing it since last March 6).
The transformation of government bonds into perpetuity would be a win-win solution, with no loss for anyone and no unsustainable political costs for the various “frugal nations.”
It would be an unjustifiable historical responsibility if, out of unconsciousness, out of subordinate Europeanism in defense of the strongest interests, out of respect for their identity as insurmountable guardians of the most stupid ‘external coercion’ or through conjunctural tactics, the Democratic Party irreversibly affected the interests of Italy and, above all, the workers and their social groups most in difficulty.
In any nation in the world, the indications of the President of the European Parliament and the President of the Delors Institute would have been collected and endorsed by the entire ruling class as decisive in safeguarding the future of our democratic Republic, founded on labor.
In Italian. Myopia, obtuse corporatism and a resigned reading of the national historical-political situation predominate. We thank Sassoli and Letta for the courage of the truth.
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