Confidence from the world

We are at the center of the world's storm, but we can quickly recover. Italy today needs international credibility; it needs people who know the language of markets and of States and who know how to speak to Countries of the euro area but also to Switzerland, the United Kingdom and Obama's United States as well as to the "new rich" countries of the world, starting from China. We need competent people, who are well-balanced and able to negotiate peer-to-peer with the European Union and the International Monetary Fund.

Most of all, we need people who with their experience and their personal credibility (fortunately we have these types of people) are able to convince the world that while it is true that our Country has a huge debt, it is just as much true that it can respect all the timetables and it can resume growing.

We can talk as much as we like (indeed, it is good to do so) about the bailout fund, about the EFSF and other things, about vehicle A or B, but at one condition: we have to be aware that we are talking about bridges that allow us to buy time, but our (mandatory) duty is that to quickly raise solid and secure pillars on the banks of the river that is called Italy. We have to make sure that we understand, without seeking do-it-yourself short-cuts, that this is a dramatic moment and that the river called Italy risks overflowing. Today many, too many, people find it hard to buy Italian securities, but the world can be turned around.

We have to prove that we move fast with the right people: that we know how to fulfill the commitments made with the letter to the EU and that we want to (and know how to) do also more and better, by carrying out those reforms that, on our own, we should have already implemented to stimulate growth and reduce debt.

This (not others) is the challenge Italy today has to face. The Greeks have called in one of their people who is able to "speak to markets". They face a dramatic situation and they risk, in any case, of not making it; not us. We really can make it because we, as can clearly be seen, are not Greece. We have to make it because we have at least 325 billion public bonds to issue on the market, in one year, and therefore it is necessary to be able to count on the confidence of foreign investors. The historical share of our bonds owned outside of Italy is still over 45%, Italian households directly own 14.3% (the Bank of Italy's financial stability report, November 2011), 19.5% counting the shares in foreign investment funds ascribable to Italian investors. Banks have a hard time renewing their purchases that are at very risky levels; the spirit of mobilization of Italian private capital in support of our public bonds is commendable (it transmits an important message of confidence) but we need to be aware both of the magnitude at stake (there is an important share of purchases from abroad that cannot be replaced) and of the risk, which cannot be underscored, that Italian investors empty a significant part of their bank deposits, feeding further, serious concerns.

There is just one main road to get out of the perverse spiral: all of politics, starting from Berlusconi but also the opposition parties, have to publicly search their souls and embrace in a realistic and convinced way the Italian cause. If we got to this point it is not just because of the last government, we are two decades late. At this point, unfortunately, it is no longer enough for the prime minister to take a step back: it is fundamental that the next coalition be guided by people who help the world perceive us as serious and credible, and that it is backed by the support, maybe even temporary, of Italian politics in the name of the Country. We cannot afford electoral pauses of a few months. Issuing on the market at least 325 billion Italian public bonds (173 of which maturing in the next six months) is a feat that can only be accomplished if the world resumes having confidence in Italy. This is the truth and it has to be fully told if we want to be serious.

P.S.1 we can legitimately not like being at the mercy of the markets, but today we have to give them the right answers.

P.S.1 Berlusconi can also see in face "who from his side betrays him" but he should prove that the Pdl is not the "personal" party that everyone says it is: he should avoid chaos and ensure in Parliament the votes of that moderate force that Italy needs in order to conquer once again the confidence from the world. We are sure that time will reward this choice.

(Translated by Yael Schrage)

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