Bini Smaghi: "No conspiracy against Italy, the markets punish our delays"

ROME – Not at all conspiracy against Italy, if anything self-conspiracy: “The complaints about conspiracies and the request that the ECB not stop buying Italian securities are restarting,” accuses Lorenzo Bini Smaghi, who was a member of the ECB board until 2011. ” The message that investors perceive, who are asked to buy Italian securities, is that there is no intention of addressing structural problems. Therefore they consider Italy more risky ».

For the same self-harm, the debt in years of easy money has only risen?
“Italy has not used the low interest rate hoard accumulated since 2015 with the Qe to increase investments and reduce debt, unlike others: now it is in a more difficult situation”.

Without imagining plots, are you sure that there are no currents in the markets that try to drive Italy out of the euro?
«This reaction, widespread in a certain part of the political class, demonstrates the fragility of this and poor analytical capacity. In the last three months, rates have risen everywhere, in Germany by 120 basis points, in France by 140: BTPs have risen more, 200 points, because they are considered more risky. But if there is a conspiracy it should be against everyone. Including America, where rates have also risen ».

Is the anti-spread plan feasible?
“I don’t know what they’re talking about. In the past, some tools were adopted to buy Greek bonds or the OMTs announced with whatever it takes, but they were subjected to strong conditionality and are not current. Just as it is unrealistic to transfer part of the debt to the ESM, counting that it purchases a greater quantity of Italian bonds than those maturing, and vice versa for other countries: such a political agreement is unthinkable and the space for such operations would in any case be limited “.

P.Why is the ECB accused of communication errors or even from the areas of Palazzo Chigi of making a mistake with the squeeze?
«Central banks have underestimated the dynamics of inflation. But now they have reacted and the markets are adjusting. If the squeeze had come earlier, the ECB would have been criticized for not waiting for more concrete signals. Now the criticism is for opposite reasons: it should not have raised rates since inflation is largely imported. It is forgotten that even with the increases, real rates remain negative ».

Why with his charisma Draghi fails to avoid the “Berlusconi” drift of the spread?
“The spread is not out of control, it is well below 2011. Of course, in Portugal it is half the rating even though the rating is similar to ours: there is a more prudent management of finance and less political instability”.

Is it true that the ECB will continue to buy back maturing bonds?
“Those from the pandemic add-on program, the Pepp, for at least two years. But we cannot continue to rely on the ECB: we must work on Italian politics, stop asking for budgetary variances and give bonuses just to gain approval ».

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