Investors fleeing Italy: ready to sell 200 billion euros in government bonds

Investors fleeing Italy: ready to sell 200 billion euros in government bonds

200 billion euros. This is the value of Btpthe government bonds that Italy sells to refinance its debt, which institutional investors would be ready to sell after farewell by Mario Draghi at Palazzo Chigi. This was revealed by the US bank Citias he explains The print. This is the 7.5% of the debt (2.766 billion euros, the all-time high was reached in July), which in itself is worthwhile 152% of GDP of our country. The news of the fall of the government immediately caused uncertainty and volatility in the markets. A skepticism that soon became evident in the spread between the BTPs and the Bund, the German government bonds. The value, which months ago was held between 100 and 150 basis pointssince the outbreak of the government crisis stands steadily between 200 and 250. The reassurances of the FdI leader Giorgia Meloni a Reuters when he stated that with his ruling party public finances would be in good hands. The interest that Italy must pay to refinance its debt – currently the ten-year BTP pay 3.75% – they are always higher and more and more distant from the relatively low values ​​of the German ones. All this despite the help of the ECBwhich he bought 10 billion of Italian securities in July.

Pnrr and interest rates are the biggest concerns

In short, investors are ready to bet against our country, and to sell 200 billion of our debt, on which the state would have to pay even higher interest. The news comes after the revelation of the Financial Times, who made it known that numerous international hedge funds are betting against our country. That is, they are protecting themselves in view of a serious economic crisis in the peninsula. Among the major concerns of those who currently hold the Italian public debt is the slowdown in the construction of works financed with funds from the NRP, which risk going up in smoke if the interventions do not take place within the pre-established deadlines. And compliance with the times is severely tested by fall of the government in a crucial moment for the definition of the design process. Furthermore, investors fear that our country will not be able to cope with the increase in interest rates decided by the ECB.

“Italy will succeed if it respects the Draghi agenda”

Gregorio De Felicechief economist of Banca Intesa San Paolo admits the difficulty, but excludes pessimism. “A orderly management fiscal policy and compliance with EU rules on public finance balances and macroeconomic convergence they exclude any criticality on the front of the refinancing of the public debt in 2023 »he explained to the Turin daily. If all goes as it should, and the tranches of the NRP are confirmed, “the amount of debt to be refinanced on the markets can be estimated in the order of 50 billion euros, which could be covered by net purchases by domestic investors (intermediaries and households) also in the face of a possible moderate flow of foreign sales ”, which Intesa estimates around 20 billion euros. The important thing, according to De Felice, is that the next government does not deviate excessively from the so-called “Draghi agenda“. The modus operandi of the former ECB president, whose figure is seen as a guarantee of rigor and prudent choices, in fact, has so far kept speculations at bay and reassured the markets and the fear is that a sudden turnaround could lead the country in the midst of strong turbulence difficult to manage. The ECB, however, is ready to intervene again by buying our government bonds, provided that the economic parameters of the Union are respected.

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