Governments change but the story doesn’t change. The economy benefits banks and large groups and lives on the backs of small businesses and consumers. Yet Meloni had guessed with the bank tax on extra profits…
The economy slows significantly in Europe. How to read the increase in ECB interest rates in the face of the inflation crisis? Nino Galloni, post-Keynesian economist, former director general of the Ministry of Labor, professor at Luiss in Rome and at the Universities of Naples and Modena, former director general of the Ministry of Labor and official at the Ministry of Budget and Economic Planning, responded to us. student, like Mario Draghi, of the great economist Federico Caffé.
Christine Lagarde, by raising lending rates, without equally raising those on savers’ deposits, causes damage to the latter. Does the ECB only protect banks and not account holders?
“This situation must be seen from two points of view. From the point of view of the banks, who are taking advantage of the situation, it is an excellent condition because they are making what are called extra profits. Meloni had instinctively said so and had acted accordingly She has been heavily reprimanded and downsized. For much less one would resign. But she still remains the President of the Council of Ministers.”
In fact, the ECB has expressed itself very negatively on Italian taxation toextra profits to banks wanted by Meloni…
“The objective of the ECB, shared by the banks, is to encourage depositors and account holders as much as possible to buy speculative and non-speculative securities. The brick, which was a way out, is no longer one. It costs too much to maintain houses in Italy and it is also much less successful to sell them than in the past. The tourism perspective has also been reduced. Then there is gold, but the movements are more represented by large countries and large investors than by small savers. The little ones are left with the alternative: either keep the money in the bank or under the mattress, in the safe, or do what they don’t want to do, having shown a lot of intelligence in the past, not trusting securities”
And why does the ECB want this?
“They want to compensate for the situation with a further disadvantage in keeping money in the bank: therefore people are encouraged to invest in securities”
What should Meloni do?
“Meloni, like all prime ministers and governments, should have also brought the banking system to the table, which has never been confronted with its systemic responsibilities. Central banks want the money to go towards investments in the stock market or at least towards the purchase of bonds. This is the scenario. The problem is that we know that banking crises arise precisely when loans to the real economy are reduced and instead investments in the financial economy, of a speculative nature, increase, so then there are banking crises due to financial shortcomings”
But isn’t stock investing extremely risky now?
“But in an inflationary situation, savers look for securities that promise dividends, so at least they have income that they wouldn’t have if they kept the money in their current accounts, having also lost a lot of purchasing power due to inflation”
What should the government do?
“It should be daring, otherwise it’s the same old film. The problem is systemic, of an entire economy based on the creation of debt money and of a debt economy that is increasingly less sustainable. It is a system that is good for large groups, those who also control the information and who say: yes, it’s fine, there are problems, but we couldn’t be better than this. However, for the majority of the population and businesses the math doesn’t add up. People can’t make it to the end of the month, they can no longer pay their mortgages, debts, condominiums, insurance. Small businesses are then burdened by a series of costs due to the performance of the system. It’s a model that weighs everything on the shoulders of the little ones and lives precisely on their condition”
The first thing you would do was in Meloni’s shoes?
“First of all I would defend the Italian system and here I also turn to the economists Bagnai, Borghi, Rinaldi who, for better or worse, I think think the same way but lately they have no longer been seen on the scene”
In a few steps, what does this mean concretely?
“Defending it on the weakest side which is the public debt. But to defend the public debt we must offer it to the Italians, giving good remuneration, guarantees, ensuring liquidity in emergency cases, but above all having a rating agency that is the official one against which investors can continue to place their own credits in the assets of the balance sheet. That’s even if Ernst & Young or Standard & Poor’s or whoever were to downgrade us. It is clear that whether to downgrade us or not is exclusively a political judgement. If a government arrived with Galloni as Minister of Economy, Standard & Poor’s would give us an immediate blow”
And are you doing what you recommend?
“It doesn’t seem to me, that not much is being done. Instead, the Italian system should be protected from that side. They do a little something on the public debt profile but not enough. We are always under enemy fire. I believe that all those who govern ultimately want us to be under enemy fire because when they have to decide something that isn’t good for them either or isn’t good for the Italians they can always argue: we are forced otherwise we will end up badly.”
Europe tells us, the ECB tells us, the markets tell us… we know the story…
“Exact. Then if I were Meloni I would issue some parallel currency, not at state debt, which you can do in many ways. There are no constraints. You can do it with shopping vouchers to give to people or with vouchers, a less objectionable system than what was the citizen’s income, so that those who are most in difficulty receive 200 euros a month for the purchase of general items. food. They are the very first things that would free me up of resources, which would allow me to do more in healthcare, education, infrastructure, security, etc. Otherwise we would always be in the same old scene, of the financial law which has no money, has no money, has no money and nothing can be done. A film we know perfectly”
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