Draghi’s left foot

link to italian version Peter Praet, ECB policymaker, released an interview on the sidelines of a conference in Milan, in which he spoke his mind about Italy:

“Italy was much too slow in reforming its economy but the work now being done by the technocrat government of Mario Monti is crucial for its future – it is very spectacular, it is a radical change that is going on. Asked whether Monti would need a second term of office to finish the job, Praet said the government guided by Monti marked a sudden and welcome change for the country. Late indeed, unfortunately late, but now decisively reforms are being conducted in Italy. Markets must acknowledge the political and social support for the reforms – which is the key for all reforms. The process of reforms, in fact, must be understood and shared by the majority of the population. Citizens must understand that these are reforms are absolutely necessary for the future. A healthy fiscal sector in Italy would also benefit the banking sector, which is negatively linked with a vicious circle to public accounts, due to the high exposure to Italian treasury bonds. It is key for the stability of the financial industry that the sovereign debt issue is tackled and it is being done. When the crisis started in 2007, Italian banks were much stronger than others because they weren’t as much exposed to financial products, especially from the US. The weakness of this system are a relatively low profitability and high costs, but also, even more perniciously, the high exposure to Italian sovereign debt – and this is exactly what happened with Italian banks. They are in fact currently undergoing a period of severe adjustment, and it is hence basic to adjust public accounts too. This has been acknowledged and correctly faced by the current government. As per Europe in general, and per ECB intervention in particular, it is necessary to bear in mind that monetary policies can have a positive influence on economies, but that they cannot solve basic problems, which are usually structural ones. The creation of massive liquidity can have collateral effects which must be carefully monitored.”

audiopost available here:

According to the President of the Young Entrepreneurs, Jacopo Morelli, adjustment must be accompanied by growth – here’s his recipe for recovery:

“Away with the thieves, the ignorant and the incapable. We need responsible, prepared, skilled people for the new political class. We are no longer available to support, with our taxes and our efforts, parasitic classes which, even now, even as 2,000 people are losing their job every day, continue to erode public money. We are disgusted by the idea of public office as shortcut for getting rich. We rebel against this decay. Enough with the humiliation of our civil responsibilities. Our watchwords have always been merit, transparency, legality. In the immediate future, the Young Entrepreneurs ask political parties to better select the ones who are going to represent Italians and to share with them, jointly and severally, the responsibilities for possible civil and capital breaches done by their representatives. Because even lack of surveillance is a fault. That’s why we ask to anyone willing to lead Italy what are they going to do in terms of autonomy – how it’d possible to think again about autonomy for jobless young people who cannot even think about getting their independence. We cannot stop the reforms which have been started, we cannot get back – especially in terms of pensions (that is a progressive and fair reform in terms of generations’ ratio). We’re going to submit to every candidate proposals about what we consider as an emergency, which would be supposed to be at the top of any political agenda but that, unfortunately, hasn’t been acknowledged by the political class yet. Crisis isn’t fading away, recession has hit hard on the industrial base, which has shrunk up to 20%. This is maybe the first time in which even our organization is counting its fallen ones. If enterprises held by young people close, hence Italy is destroying its future, its hope, Its dynamism. The way out of the crisis is the creation of new workplaces, reinvigorating the firms which can consequently express their full potential. Austerity policies are leading to a progressive industrial desertification – austerity was needed to get back our international credit, now it’s time to stimulate the growth. The government has acknowledged that Italians are showing a great sense of responsibility by accepting drastic and unpopular measures. If this is true, then there’s a moral obligation to restore faith in the country, immediately, by substantially lowering tax pressure on workers and businesses that reinvest.”

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Operatore finanziario professionale dal 1998; ha collaborato con diverse banche italiane ed estere. Si può scoprire dell'altro cliccando qui. Oggi é responsabile di un centro di Private Banking. Professional financial trader since 1998; he has worked with several Italian and foreign banks. You can learn more here. Bimboalieno is currently in charge of a Private Banking centre.