The Italian authorities have asked Europe to forgive the national debt accumulated during the pandemic, writes Bloomberg. This initiative, directed to the European Central Bank (ECB), was made by Deputy Foreign Minister Riccardo Frakkaro.
According to him, the monetary policy of the ECB during the global crisis caused by the coronavirus should be aimed at stimulating the economy, which is impossible without increasing government spending.
The decision may be the cancellation of government bonds bought out by the regulator, or multiple extension of their maturity.
In the spring, the ECB launched a large-scale quantitative easing program in the amount of 735 billion euros, under which it buys government, corporate and mortgage bonds in the secondary market (mainly from banks), thereby providing the banking sector with additional liquidity. In June, the program was expanded to € 1.35 trillion.
Italy turned out to be one of the countries most affected by the crisis. Even before its start, Rome faced complaints from Brussels in connection with too large budget deficits and the level of public debt exceeding the standards set at the EU level.
At the same time, the ECB leadership, headed by Christine Lagarde, is unlikely to support Frakkaro’s call. They have repeatedly stated that they cannot take such a measure, since it would violate the law on the European Central Bank, which prohibits financing the budgets of member countries through direct emission.