After a slow start to the week for the spread between BTP and Bund, which opened the session at 191 points, the differential between the two government bonds rose to 193 during the morning
This morning the spread between BTPs and Bunds rose to 193 points, after starting with a slight decline to 191 points. The yield on the Italian ten-year bond also rose to 4.81%, up by three basis points.
Tremonti: “The problem is not the spread, but the debt”
Former minister Giulio Tremonti addresses the topic in an interview with Corriere della Sera: “Today the problem is not whether the spread is high or low, but the debt. We can also note that the spread, referring to the German rate, had more sense when Germany was doing well. But the problem remains the monster of the Italian debt that we arrived at after the end of the seventies: then the debt rises until it degenerates and produces a democracy of deficit which then becomes a deficit of democracy. And it marks the end of the First Republic”. Only between ’93 and ’94 – continues Tremonti – does a very long phase of debt reduction begin, up to almost 100%. In 2011, after the 2008 crisis, the debt reached 117% of GDP, but be careful: not because public spending increased, but because GDP decreased. Afterwards the debt rises vertically. Well, that crisis has not been overcome.” As for the Meloni government, Tremonti observes that: “It comes at the end of a cycle of strange finance, different from the past. The structure of capitalism has changed: even if there is enormous private wealth, prices are made from abroad on the margins. And then, there is the uncertain state of the Union, because the old Stability Pact is suspended”. Then on the possibility of a technical government: “The current executive comes after a decade of reckless finance both for what has been done than for what has not been done. He means that this government today has enormous responsibilities. But I am convinced that having great parliamentary strength, it has the possibility of expressing the necessary policies.”