As reported by the Financial Times, the ECB invites the Commission to make the Recovery Fund a permanent non-temporary intervention element as agreed between the Commission and the Council. The uniqueness and temporariness of the Recovery Fund is also linked to the need to overcome the opposition of the "Austere" countries, Austria and the Netherlands in the lead, which cannot accept a permanent fund, a symbol of unwanted mutualisation of the debt. On the contrary, the ECB would prefer this situation to become permanent also to provide an alternative risk-free security to the Bund, which is now the only Benchmark at European level. This should sound many, many, alarms in Italy also in anticipation of the reform of the MES which provides for the "weight" of the risk of the securities of individual states with a limit to their purchase. The presence of a second zero-risk security seems to have been designed to invite banks to download the securities of peripheral countries and then devote themselves completely to those of central countries.
However, for the ECB, forced growth with the Recovery Fund seems to be the only solution for debt growth, as Board member Fabio Panetta said "the substantial funding provided at European level represents a unique opportunity to address the concerns of long-term competitiveness and sustainability ". "Growth will be the only solution to the accumulation of public and private debt." But are we sure that contributions and funds strongly conditioned to policies whose return in terms of efficiency and productivity is doubtful to be the real answer to the need for strong growth?
However, the ECB has also gone a little further by indicating which countries will benefit most or least from the Recovery Fund:
On the one hand, Italy is not even the greatest beneficiary: it will be Bulgarian, Greek, Portuguese and Spanish Croats who will have the greatest advantages. On the other hand, we will see if Holland, Germany, Austria and Denmark will be willing to make sacrifices to truly accept this form of Recovery Fund, or if the national parliaments will not intervene with restraints. For example, that of The Hague seems rather cold towards the measure, as the Austrian Prime Minister Kurz did.
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-bce-spinge-a-rendere-il-recovery-fund-permanente-chi-ci-guadagna-e-chi-ci-perde-vedrete-la-reazione-di-olanda-e-germania/ on Wed, 30 Sep 2020 17:14:25 +0000.