Former Italian Finance Minister Tremonti Takes on Draghi, from ‘Whatever It Takes’ to ‘Whatever Mistakes’

June 11, 2022 (EIRNS)—In a television appearance and in an interview with Il Giornale, former Italian Finance Minister Giulio Tremonti took a little vengeance against Mario Draghi and the financial oligarchy against which he fought during and after the 2008 financial crisis. The financial storm has arrived, and it originates from central banks’ monetary expansion, Tremonti said. Referring to the bloodbath on the European stock markets, he said: “The storm started yesterday. It is evident in the sales volume, in their objects, in their rapidity and in the action coming from the financial market as a whole.”

After listing classic exposure of financial alchemy in Goethe’s Faust, Pinocchio and Thomas Mann’s The Magic Mountain, Tremonti said: “In 2008-2009 they thought that the crisis of globalization could have a financial solution and not a structural one. The Berlusconi government proposed to adopt a Global Legal Standard, going from free trade to fair trade. The idea, supported by OECD, was rejected by the Financial Stability Board, successfully chaired by Mario Draghi—which, unfortunately, produced very little stability. And that is how we went to Plan B: unlimited creation of money from nothing. It is so that in Europe, the ECB has bypassed the two principles of the euro: [contain] inflation and a ban on government financing.”

Inflation, he said, is scarcely contained, as the target of 2% has been left behind, and is now at 8%.

The ban on direct government financing

“has been bypassed with a government-banks-ECB triangulation: governments issue bonds which are undersubscribed by banks, which sell them to the central bank. This is how money from nothing is created and the ECB has become a sort of Bad Bank. What was supposed to be an emergency scheme became long-term care. It lasted ten years among delusionary and universal satisfaction. That is how the ‘Whatever It Takes’ became ‘Whatever Mistakes’: all possible mistakes were made.”

Governments submit to finance, Tremonti said. “Two years ago, at the Eurotower for the changing of the guard between the two chairmen, heads of state and government from the whole of Europe were applauding in the audience. You would have hardly seen De Gasperi, Adenauer, Mitterrand or Cossiga rushing to applaud bankers.”

Tremonti is pessimistic. The storm is hitting overexposed governments. The priority, he said, is to use the little money available to concentrate on protecting people from inflation, lest the situation in autumn become explosive.