The always interesting Dagospia launches this title, which is perhaps just a kind of test to see what could be the answers to a sensational choice: to cancel the state debt, but also free, issued during the Covid-19 period.
There is no doubt that this is the only solution: the ECB has pledged to buy 1350 billion euros of public and private debt, a figure that will probably grow between 1600 and 1850 in December. Without this money the EU and the euro would be a memory, and maybe it won't even be enough. This debt is priceless, not seriously honorable, it can be issued only because it is monetized and, by trivial logic, destined to be either canceled or perpetually renewed and kept in the accounts of the ECB, ie canceled.
Now this may just be an uncontrolled rumor, even if it seems to be of French origin so reliable, but what are the possible fallout?
- from the point of view of prices or of zero inflationary pressure, as the money supply is already circulating and therefore the cancellation of the debt does not involve any variation in the basis;
- from a formal point of view, debt / GDP ratios are falling, so there is a greater guarantee of coverage for private investors;
- from a communication and intellectual point of view it is a real revolution, in the sense that a trivial question arises, but not too much "Why haven't we done it before?".
Recall that such an operation will also become a nice gift for private companies, because the PEPP and other QE measures have also affected private debt. a nice gift for big companies …
How have some economists reacted? Let's start with Vladimiro Giuffre who posted this tweet:
If they cancel the Covid debt, who this year has done everything to issue the least possible debt what is it?
– Vladimiro Giacché (@Comunardo) November 2, 2020
Obviously, when the debt is canceled who was "Austere" is the idiot of the century….
The always excellent Giuseppe Liturri helps us in this, with some interesting data on the public debt issued by Italy, France and Germany
I facilitate a slide on the January-September net issues of ITA / FRA / GER / SPA.
The 247 billion of France against the 134 of Italy (with the ECB buying 136) could influence the outcome of the survey. What do I do, take it off? pic.twitter.com/8lZEuWyra6
– Ora Basta (@giuslit) November 3, 2020
It seems clear that if issuing little debt was a fool, we were much more so than France, which issued double our debt . France has really made an expansive and business retention policy. We have Gualtieri … ..
Finally, Alberto Bagnai's intervention on the subject, with an analysis of the consequences of the behavior choices of the individual states. to summarize France, which has issued double the debt issued by us, it will overcome the crisis by monetizing the debt. We, on the other hand, have not issued any and will make the recovery measures pay to the blood and flesh of our fellow citizens.
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/la-lagarde-concellera-il-debito-covid-pareri-di-bagnai-di-giacche-ed-i-dati-di-liturri/ on Tue, 03 Nov 2020 14:29:48 +0000.