The state has monetary sovereignty, by Francesco Carraro

Speech by Francesco Carraro at the conference "A POSITIVE WORLD – Analysis, design and implementation of an economic renaissance", which was held on 24 March 2023, in the Parliamentary Groups Hall of the Chamber of Deputies.

Francesco Carraro made an examination to demonstrate why monetary sovereignty is still firmly in the hands of the Italian state, despite the euro. This is the video of his speech:

This is the transcript of his speech in the Chamber:

“Speaking of monetary sovereignty today is a taboo, or rather any discussion on this subject often crashes on the erroneous assumption that, “ juribus” sic stantibus , a national currency parallel to the euro (jealously “administered”, and administered, by the ECB) it's not "legal".

We live in the era of the SINGLE CURRENCY, i.e. the euro which is no longer issued by our country and therefore – here is the mantra – WE HAVE LOST MONETARY SOVEREIGNTY.

But is it really true?

In reality, article 117 of our Constitution, integrated with the constitutional reform of title V in 2001, added the following formulation to the original text: " The state has exclusive legislation on (…): currency , protection of savings and financial markets ; protection of competition; currency system".

Now, as is known, the principle of hierarchy of sources is in force in our legal system, so at this point we have to ask ourselves where the European treaties fit in this context. According to a dating interpretation, international treaties must be given the same legal "force" as the laws with which they are ratified. Therefore, if a treaty is ratified with an ordinary law, it will have the force of an ordinary law. If it is ratified with a constitutional law, it will have the force of constitutional law.

However, in the same and aforementioned article 117 a "distinction" was inserted; and that is that the State exercises the legislative power "in compliance with the constraints deriving from the Community legal system and from international obligations". Well, according to the majority interpretation prevailing in doctrine and jurisprudence, this modification has attributed to international treaties the effectiveness of "interposed rules", therefore with an "intermediate" position between the Constitution and ordinary laws.

With judgments no. 348 and 349 of 24 October 2007, the Judge of Laws established that the treaties, although they can be classified as interposed rules (and therefore superior to ordinary law) do not, however, rise to the rank of constitutional rules and it is necessary that they comply with the Constitution : " In the event of any question arising from alleged conflicts between interposed norms and internal legislative norms, it is necessary to jointly verify the conformity of both with the Constitution and precisely the compatibility of the interposed norm with the Constitution and the legitimacy of the contested norm with respect to the same interposed norm " .

In the case, however, of the Community treaties, the so-called "counter-limits" are represented, by the granitic jurisprudence of our Judge of Laws, by the fundamental principles (articles 1-12) and by the inviolable rights (articles 13-54) of the supreme charter. Ergo, even the European treaties are, albeit to a lesser extent, subordinate to the Constitution.

Having said that, let's now go and check the dates, because dates are important in law.

When the amendment to article 117 was approved in October 2001, clarifying unequivocally that the State has exclusive rights in matters of "currency", the Maastricht treaty had already been stipulated (7 February 1992), the euro was already fully operational on the financial markets as scriptural currency (January 1, 1999) while banknotes and coins would soon enter our pockets (January 1, 2002).

Therefore, our legislator knew very well that the Union had the exclusive right to "monetary policy" (subsequently consecrated in Article 3 of Lisbon) and he also knew that in Europe the only legal tender "banknotes" would be those in euro under the exclusive competence of the ECB.

Ergo, article 117 of the Constitution not only has a legal force superior to international treaties in general and to European treaties, but it can be interpreted in only one coherent, rational and logical way: and that is that the State retains legislative power in monetary matter. Therefore, this means, among other things, the power to issue "state tickets", something different and alternative to the "banknotes" referred to in article 128 TFEU, but also obviously alternative monetary forms such as fiscal currency.

One last note, always of a "chronological" nature. On 13 December 2007 the Treaty of Lisbon was signed which entered into force on 1 December 2009. Well, that treaty is not only hierarchically subordinated to the fundamental principles and inviolable rights of the Constitution and, therefore, also to article 117 – declination of sovereignty of the Italian people (of which article 1 speaks) in monetary matters – but it is also stipulated "after" the reform of the same article 117.

It codifies, in article 3, the exclusivity in matters of "monetary policy" (with primary reference to the single currency "euro", of course) of the EU. While Article 128 TFEU attributes the monopoly – in the matter of legal tender of "banknotes" – to the ECB, therefore it cannot, for legal, historical, hermeneutic reasons and simple common sense, have usurped the sovereign power of the Italian State to mint money.

There is no doubt that the Italian State has ratified it only to the extent that (and for the decisive reason that) it has deemed it fully compliant with the unshakeable sovereignty (including monetary) of the Italian State made explicit by article 117 of the Constitution and the correlated exclusive legislative power attributed to the Republic in matters of money.

If you want an authoritative endorsement of this thesis, see and read the petition in favor of state tickets launched on 31 March 2020 by the Emeritus Vice President of the Constitutional Court, as well as president of the "Implementing the Constitution" association, Paolo Maddalena.

Now let's see another very authoritative source able to endorse what has just been specified.

We extract the following excerpt directly from the Bank of Italy website: "When instead the central bank issues banknotes …, these are not spent on goods and services but provided to commercial banks, in the form of loans, for the needs of the system economic, or used to purchase financial assets, such as government bonds or foreign currency assets; the value of the banknotes, entered in the balance sheet liabilities of the central bank, therefore corresponds to the entry of interest-bearing assets in the balance sheet assets, which yield interest. When money is produced by the State, it is the latter which, by spending it for example to purchase goods and services, puts it into circulation in the economy and immediately realizes the equivalent value , net of production costs. Today, therefore, seigniorage is initially perceived by central banks, which however then transfer it to the states, the ultimate holders of monetary sovereignty .

The passage above demonstrates, irrefutably, that even the highest assemblies of "banking power" are aware of a legal fact unfortunately ignored even by too many "sovereignists". The money creation system provides for it to be generated by the central bank through the placement of newly issued banknotes as liabilities on the balance sheet, while assets such as debt securities are placed on assets (according to the double-entry logic). public. The seigniorage received by the ECB, i.e. the interest paid on the securities in question, is then transferred to our national central bank which, in turn, "pays" it to the State "ultimate holder of monetary sovereignty". Ergo, the State could easily create money and spend it to purchase goods and services, putting it into circulation in the real economy, immediately realizing the equivalent value net of the emission costs.

So why doesn't it happen? Because there is no political will to do so. The State, though sovereign, has decided to outsource its most precious power to a third party which was once, if nothing else, our National Bank. Today it is an extraterritorial and transnational body based in Frankfurt.

But at least let's clear the field of the "legal" alibi thus declined: it cannot be done because there are treaties. It is not true. It can be done and it would be legal. We are the first to recognize that "legal" does not necessarily rhyme with "appropriate" or "convenient". And yet – let us add – perhaps an era is approaching in which courage and will will count far more than opportunity and convenience. In exceptional times, it is exceptional measures that save your skin. Not only that: with the opportunity and convenience – especially those of others, more than ours – we have already practically destroyed the most beautiful country in the world.”

The full video of the conference, divided into 3 parts, can be seen on "Byoblu – Citizens' TV" with these links:

– 1st part – HELL – https://www.byoblu.com/2023/04/02/un-mondo-positivo-marzo-2023-1-parte/

– 2nd part – PURGATORY – https://www.byoblu.com/2023/04/02/un-mondo-positivo-marzo-2023-2-parte/

– 3rd part – PARADISE – https://www.byoblu.com/2023/04/02/un-mondo-positivo-marzo-2023-3-parte/

Fabio Conditioni

President of Positive Money

https://www.youtube.com/@MonetaPositiva

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The article The state has monetary sovereignty, by Francesco Carraro comes from Scenari Economici .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/lo-stato-ha-la-sovranita-monetaria-di-francesco-carraro/ on Sat, 06 May 2023 12:18:53 +0000.