The ECB extinguishes the idea of canceling the debt contracted by Italy in the bud to cope with the pandemic shock.
With President Christine Lagarde who refuses even to enter into the merits of the question: it is prohibited by the Treaties, "period".
Thus ends the fuss that arose in front of the hope that the ECB could monetize the more than 100 billion euros of debt issued (so far) by Italy to keep the economy afloat and that the ECB has financed almost entirely, without being able to however, prevent the debt from flying to around 160% of GDP.
Lagarde was clear.
"I always read with interest everything that the representatives of the EU Parliament and especially the presidents say, my answer is very short: everything that goes in that direction is against the treaties, there is article 103 which prohibits that type of approach and I respect the treaties. Period ".
The amount of debt, now 2,600 billion euros, is scary.
And so the idea of canceling it, or 'sterilizing it', the Lega's workhorse, began to make its way into the 5 Star Movement.
Until in an interview with Repubblica, the president of the European Parliament David Sassoli defined "an interesting working hypothesis" to cancel the debt contracted to deal with the pandemic.
Words that have created maldipancia in the Democratic Party.
The EU Commissioner for Economic Affairs Paolo Gentiloni, two days ago, said that "we cannot cancel" this question of the debt, confident that it will be reduced over time.
Economy Minister Roberto Gualtieri took up the invitation: "Italy is working on a path to reduce its public debt based on a strategy of growth and investment and a responsible medium-term budget policy. This is the position that Italy assumes responsibly as a country with a high public debt ".
In reality, the choice on how to manage Italy's monstrous debt seems to have already been made.
As explained by Carlo Cottarelli, a former senior executive of the IMF and today head of the Observatory on public accounts of the Cattolica, until inflation rises (and it will take years) the ECB "will continue to do a rollover", that is to buy back bonds. as they expire.
When inflation picks up, instead of dumping them on the market, the required bank liquidity reserve can increase.