Executive Intelligence Review


Need for New System Raised in Italy, Against Speculators’ Attack

Aug. 13, 2018 (EIRNS)—Giancarlo Giorgetti (Lega), undersecretary to the Prime Minister’s Office, granted an interview to the daily Libero saying he expects a speculative attack against Italian bonds in September.

“I expect the attack,” Giorgetti said.

“The markets are populated by hungry speculative funds that choose their victims and act. We saw what happened at the end of August 1992 and seven years ago with Berlusconi. In summertime there is little movement in the markets and that makes it a favorable period for aggressive initiative against states. Look at Turkey. If the storm comes, we will open the umbrella. Italy is a large country and has the means to stand [the attack], including due to its large private savings. What I am worried about is that, in the general silence, a major part of Italian savings has been carried abroad and therefore the management of our bonds is not a domestic one.”

Giorgetti does not give indications on how Italy will eventually defend against speculation. But Lega Deputy Claudio Borghi, who is chair of the Chamber of Deputies Budget Committee, did so in very definite terms.

In Twitter posts, Borghi stressed that

“not only is Italy’s spread with German bonds widening, but also the ones of other nations like Spain are doing so. Either the ECB will provide a guarantee [to buy Italian bonds as lender of last resort] or the euro will be dismantled. There is no third option.”

Then in an interview, Borghi put the fault on the monetary system:

“There cannot be a system at the mercy of market movements without any shields by the central bank.... It is significant that an external event like Turkey, that has nothing to do with Italy, unleashes such an effect.”

It has also been reported that Paolo Savona had a meeting with ECB President Mario Draghi in Frankfurt at the end of July, in which Savona presented his ideas on how to reform the ECB and how to stimulate growth. The ECB should be a lender of last resort, able to defend sovereign bonds of each and every member of the Eurozone, Savona says. Italy should be allowed to spend EU50 billion in productive investments. This figure corresponds to Italy’s annual trade surplus, and should not be counted in the deficit under the EU’s austerity rules.