To what purpose the compulsion to borrow?

by Francesco Cappello

From loans, to bankruptcies, to sell-offs, to mass unemployment, the road is short

While this government locks us up at home, it does not seem to notice yet another trap set against us. Rather, it collaborates in encouraging the spread of misery in the country. Two weeks ago I argued that we would not need to get into further debt with instruments such as the Recovery Fund and the Mes (see https://www.francescocappello.com/…/la-luce-in-fondo ……/ ) and that, vice versa, we would have many excellent alternatives (PSN) to finance and support, in this dramatic situation, the country and allow its recovery. Among these, the most common is the offer of government bonds at very advantageous conditions because even at a negative rate! (Whoever entrusts his savings to the state is willing to receive less than what he gives!). The phenomenon of sub-zero rates dates back to the precovid era but is very recent for Italian bonds and was encouraged by the ECB's pandemic emergency purchase program (PEPP). However, this is not appreciated because the PEPP is reducing the borrowing costs for the most fragile countries of the eurozone in order to allow them to avoid the EU halter loans in the form of RF and Mes, in favor of the collection of unlimited liquidity on the bond market . But recently the British reuters agency revealed that the PEPP must be given up . We have to stop it, go back to the more usual APP expanded asset purchase program , better known as Quantitative easing , to force ourselves into mes, RF loans, with all the conditionalities and negative consequences of the case.

Conte, therefore, still hopes in the Recovery Fund despite the lack of approval from other countries and in all probability it will never arrive; it insists on placing our hope of salvation in the granting of halter loans that carry blackmail that would nail us to debt, in the same way as the 30 denari of the Mes.
Thus, while the leading countries piloting the policies of the ECB are asking to stop the purchase program of anti-pandemic bonds, Gentiloni, more "realistically", had proposed to tax the first house and Visco, listen, to return to austerity policies !
All this while the economic depression is gripping the country.
Better failed, blackmailed, lost, enslaved, so that the sale of the country, which began in the 90s, can be more easily completed, together with its subsequent colonization.

It is one thing to collaborate with other countries and another to give them our infrastructures and their control, our strategic assets, that is the very factors of production.
This has recently happened for the port of Trieste, which the Chinese coveted as the head of the maritime silk road is now 51% controlled by Hhla, a strategically important German logistics and transport company that manages three of the four terminals of the port of Hamburg. .

Capital hemorrhage
Unable to propose virtuous methods capable of enhancing savings capital, they are allowed to take the path abroad . At least three reasons that push Italians to transfer capital abroad:
on the one hand, the risk of an asset or a forced withdrawal from current accounts, on the other hand, the introduction of the bail-in by the European banking union which penalizes users in the event of bank failure.

A report by Unimpresa denounces the withdrawal of foreign funds from Italian spas

These are the main data of a report by the Unimpresa Study Center, according to which from the first half of 2015 to the first half of 2019, joint-stock companies have seen their value rise by more than 60 billion euros, while "listed" companies have seen their value drop by 43.5 billion their capitalization. “After years of raids, we register a step backwards by foreign parties. The decline appears to be linked more to the loss of value of listed companies and not to a return of Italians . Probably, thanks to several reasons, our entrepreneurial and financial system is less attractive and the reasons are different: economic growth is slow and politics is unable to give the necessary answers, i.e. less taxes, less bureaucracy, more investments in infrastructure, speeded up civil justice ”Comments the vice president of Unimpresa, Andrea D'Angelo.

Non-performing loans
The effects produced by the economic shock generated by Covid-19 will see a new growth in the default rate of new loans granted to businesses. The deterioration rates of firms that had reached a peak of 7.5% (percentage of new loans not honored out of total loans) will rise again after reaching the lowest levels (2.9%) of the post- financial crisis of 2017. Consequently, the appetites of vulture funds grow with respect to the market for bank bad loans, the so-called non-performing loans , together with the Guarantee Fund on the Securitization of Bad Loans ( GACS ) and bank restructuring …

Borsa Italiana itself now wears European clothes; in an attempt to build a European financial market more independent from the city of London and Wallstreet, Piazza Affari, last October it was sold for 4.325 billion euros to the pan-European market that manages the Paris, Amsterdam, Oslo, Brussels stock exchanges , Lisbon and Dublin.
The Italian Stock Exchange was thus acquired by Euronext with the advice of JP Morgan and Mediobanca, in a consortium with Intesa Sanpaolo and Cassa Depositi e Prestiti through the subsidiary Cdp Equity.
Lazard advised CDP in the transaction. The London Stock Exchange took advice from Barclays, Morgan Stanley and Goldman Sachs.

Monte dei Paschi di Siena
Rather than making MPS a real public bank as suggested by the PSN , the Italian State which holds 68% of its capital, gives in to the will of the European bodies that ask it, by June 2022, to exit the capital of MPS while at the same time making load of 8 billion in impaired loans.

Affaritaliani.it interviews Giulio Sapelli who denounces, among other things, the maneuvers underway by the French towards the appropriation of Unicredit and Generali as well as the private savings of Italians.

… Even a child knows that
if work were to be hindered and / or prevented for a long time, together with the failure to produce what is needed for life, the destruction of real wealth would inexorably advance in the form of bankruptcies and consequent company closures, sale, privatization and neglect of all that was individual and common good.
Our Constitution reminds us that work is the primary source of all wealth together with the source of sovereignty that makes each of us a citizen. If we were to forget it as citizens we would find ourselves subjects, from a democratic republic, from a colony.

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The article To what purpose the compulsion to borrow? comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/a-quale-scopo-la-costrizione-ai-prestiti/ on Mon, 09 Nov 2020 13:07:44 +0000.