Italy should attract more private savings into government bonds to help it sustain high spending to fight the coronavirus crisis and ideally bring home some of the tens of billions of euros parked abroad, the head of Italy's biggest retail bank has said.
MILAN - Italy should attract more private savings into government bonds to help it sustain high spending to fight the coronavirus crisis and ideally bring home some of the tens of billions of euros parked abroad, the head of Italy’s biggest retail bank has said.
In an interview with Il Sole 24 Ore daily on Saturday, Intesa Sanpaolo CEO Carlo Messina urged the Treasury to issue “bonds with social purposes” aimed at ordinary Italians, offering “competitive yields, tax breaks, a legal shield against prosecution to repatriate money stashed abroad”.“Now the time has come to bring them back. This way their owners could prove they believe in their country,” he said.
Italy expects its national debt this year to reach 155.7% of gross domestic product, the highest level since World War Two, pushed by the massive deficit-spending needed to fight one of the world’s worst outbreaks of COVID-19.“We must be a virtuous country that respects the no.1 rule: debts must be honoured,” he said.
Banks raise funding at a premium to government bonds, so Italian lenders are at a disadvantage because of the comparatively higher yields on Italian debt compared to countries such as Germany that are considered lower-risk.
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