Btp Valore, the reasons for a half-flop. Italians now we knowand the ECB on June 11th is scary
The fourth edition of Btp Valore (the one that according to the Mef allows pensioners to go on a cruise thanks to the returns, ed.) it closed with 11.2 billion raised. The last day of placement recorded a demand of 970 million: the balance is rather meager, slightly up compared to the third day, which increased the partial total to 6.56 billion.
In addition to placement, however, the topic of public finances also took center stage with the speech of Superbonusand it’s here – analyze Spy Finance – that the narrative has changed. Minister Giorgetti, in order to justify the need to spread the Superbonus credits over 10 years, evoked the I wonder as a point of comparison. While Milena Gabanelli’s Dataroom on the website Courier he referred to the Italian public accounts with the term wreck. Words that have weight, especially if they refer to the same public accounts that operate as the underlying for that debt that is being placed. The Mef was clearly hoping for a very different result, but the auction with such formally indispensable conditions was – in truth – a stress test. More than placing, it was necessary to understand. And set a height to the bar. How much are Italians still willing to invest in public debt? Not much. And not out of mistrust, at least for now. Not for fear of future haircuts or activation of the CAC, perhaps requested as a sacrifice only one from a Draghi-led Europe. Yes because money is scarce. Wages are stagnant. Inflation has eroded purchasing power. And the pandemic, net of tips and kickbacks, has affected savings.
So the Mef is actually developing its models to understand how transferable country risk is from banks to citizens/savers. And the ECB is dictating the issuance agenda to the MEF, because the same central bank that has so far kept on its balance sheet all the BTPs purchased under the pandemic purchase program (PEPP) will begin to unload them at the end of the year. End of reinvestment. At that point, the‘Italy must look for buyers. The banks? Too full of debt and too unwilling to take on more. The preferred path is Italian debt in the hands of Italians, which the Government certainly likes. And in fact he saw Minister Giorgetti talking about private wealth to be made available to the country.
The ECB has clearly told Bankitalia that it appears prudent to begin that risk transfer. At least to understand how much debt can be absorbed by families. Before the tsunami really starts, when Frankfurt will begin a budget Qt on the securities purchased in the post-2020 period. But already today, Italian families directly hold 13.5% of public debt. And if we count that indirectly held through banks and intermediaries, another 26.5% must be added. Which must be combined with the postal savings quota. In short, Incredible as it may seem, already today Italian families hold around 47% of the public debt which is made up of circulating government bonds and postal savings. Will they want more? And if so, they will have enough capital to purchase more in the times, ways and volumes necessary for the MEF to be able to counterbalance the disinvestment of PEPP securities by the ECB, net of the moral suasion by Mario Draghi can make him proceed at a more than gentle pace?
The continuous issues of these first months of 2024, despite interest rates at their highest and expectations of their cut in June, therefore represented an initial need to raise cash, a stress test of resistance and absorption capacity in view of the ECB’s next moves.