San Marino. Finance Commission: in secret session hearing of the sole director of the former SNB Asset Management Company and of the Bank’s top management
In the communications paragraph, various topics are addressed: from expensive energy to consultancy
Today’s meeting of the Finance Commission – reads the report by San Marino press agency – opens with the Communications paragraph, which is suspended after 9.30 for the hearing in secret session of the Sole Director of the former SNB Asset Management Company and of the Central Bank’s top management in compliance with the agenda approved by the III Standing Council Commission in the session of 26 October 2022.
During the Communication paragraph, the councilors of Libera Eva Guidi, Matteo Ciacci and Luca Boschi ask for a series of questions, from dear bill the state of health of the banking and financial system, with particular reference to the bailouts of Bank Cis And AssetBank, up to the accounts of the State Company for Public Services. Nicola Renzi of Repubblica Futura also raises the question of many consultations assigned: 130,000 euros for the new hospital, 150,000 for the agreement with the Milan Polytechnic and the gala evening of the Aaslp.
The network councilor Emanuele Santi replied first, recalling that on gas and electricity the solution of the indexation of electricity and the reduced increase in gas, 30%, is the solution that balances budgetary needs and the protection of citizens . And then the Secretary of State for Finance Marco Gatti underlining on the one hand the need to open a debate on the future of energy and on the other that the banking and financial system, as confirmed by the IMF, has made “huge steps forward” and liquidity and capital profiles. With regard to Cis and Asset, Gatti continues, the government is managing two inherited situations, while for the renewal of the bond, the government will have the mandate of Parliament starting next year and will evaluate the best market windows.
The session is interrupted by the chairman Alessandro Mancini to make room for the secret one and will normally resume at the end of paragraph 3, in all probability from 2.30 pm, from the Communications paragraph.
Below is a summary of the interventions in paragraph Communications
Nicola Renzi, Future Republic: I offer some reflections on a couple of topics: the government’s public evenings on energy and consultancy. We are in a very delicate phase for the country and we need a different prudence in current spending. We have tried to put some government expenses under a magnifying glass: on health care, a precise focus is needed on transfers to the ISS and on some resolutions. I have heard the announcement of the construction of the new hospital, with substantial consultancy for 130,000 euros given ad personam to a subject and we would like to know what happened to that money. Another issue is the territory: the agreement with the Milan Polytechnic has been heralded, but the cost of 150,000 euros leaves us very perplexed. And then the AASLP grand gala complete with dress code. The government makes citizens tighten their belts but is not willing to do the same.
On bills, the issue is far from resolved and we are preparing proposals, however what was done by the secretary of state Teodoro Lonfernini and during the public evening with the accusations against the opposition because he did not participate is unsustainable and offensive. It’s funny, if you want to participate, you invite.
Eva Guidi, Free: we talked a lot about bills but there is absolute confusion when specific answers are needed. In the public evening it was said that there will be an increase in bills over 30% for gas and indexation for electricity. We are not consoled by the fact that you pay less than in Italy. We need a serious and precise answer to consumers and entrepreneurs, how much is more than 30%? Specific indications are needed, these are important amounts. I’m very worried about the general increases that exist, food spending also rises between 10% and 20%, controls are needed and cost containment policies need to be evaluated. Despite the maneuver of the central banks, in fact, the institution is struggling to stop. It would not hurt to set up a table for economic emergencies in which to implement policies of clarity on bills and do more for energy policies, we will bring proposals. A discussion table also serves to implement new projects would be a good thing: from the IMF, on the other hand, the invitation to proceed with the renewal of the international loan of 340 million has arrived because the Fund knows that the fundamental indices and the performance of the international financial market are subject to elements of uncertainty and the situation does not bode well. Have you implemented activities to proceed with the renewal of the bond prematurely? With a sharp rise in rates there is the risk that it will become penalising.
Matteo Ciacci, Free: on the banking-financial system there is the news of the former Cis bank current account holders who have presented an appeal to Strasbourg and this cannot leave us inert. We try to think together on how to find a solution. On 22 July the bonds must be repaid, however the savings of account holders were further frozen, with government bonds for another 10 years. We know the situation in the country, it would be easy to say that a refund was necessary and to comply with the resolution plan, but a reflection with the entire banking system is necessary. The greatest responsibilities are of shareholders and directors and the involvement of the banks and the Central Bank is needed because if you go about issuing securities, they must be put in guarantee. He invites the Secretary of State for Finance Marco Gatti to open discussion tables with the banks. What are the updates on the Asset bank affair? In light of the appeal ruling and that Cassa di Risparmio is divesting Asset’s assets, what does the government intend to do? We cannot forget what happened in the past, we must act with common sense solutions and involving the entire banking and financial system on a systemic and solidarity level.
Luca Boschi, Libera: on the accounts of the State Company for Services, when will we know the 2022 budget and what impact it will have on the 2023 state budget? What criterion will be introduced, fund or accrual? We hear a lot about the project on the Special Economic District which could be included in the 2023 budget law. Can Secretary of State Gatti update us?
Emanuele Santi, Network: on Cis account holders appeals to the ECHR, when the resolution was made, obligations were made to protect everyone at three, five and seven years. This plan was perhaps a little too optimistic and after three years we found ourselves repaying amounts we didn’t have. And we made a 10-year bond so that the state could find the resources, it wasn’t an act against account holders. The conditions at three, five and seven years were not tenable.
The majority are discussing gas and electricity and the solution of indexing electricity and the reduced increase in gas is the solution that balances budgetary needs and the protection of citizens. It is then necessary to investigate the needs of Aass and understand a savings plan: water, waste, slaughterhouses and transport are services at a loss, it is necessary to intervene.
Marco Gatti, Secretary of State for Finance: there was a recent hearing on bills, the questions must be asked there because the Authority decides the tariffs. The government has recommended both towards the State company and towards the Authority to take into account all the operations put in place to contain the increase in costs so that they are transferred to the tariff assessment. The 2022 closure marks a loss for the Company of four to five million euros, but certainty will be there in the end. While for 2023 the forecast is for a profit of 3.6 million.
The real challenge on which to have an in-depth debate is the future. No one wants a plant, but to contain energy costs we have to think about treating production differently, starting to do it internally. It is therefore necessary to understand what is possible to do and then go and determine on that road. The government is moving forward, looking at various technologies.
On the stock, the government moves on the basis of budget laws and at the moment we don’t have the mandate of Parliament to launch a market operation. The government has proposed to be ready from the first days of 2023 to evaluate the best windows. The intention is to move towards a roll over that keeps the value of 340 million of foreign debt as the limit within which to contain oneself, while the roll over also expires for the 50 of domestic debt.
As regards Cis bank account holders, the resolution does not belong to this government, which is instead managing it. Parliament and the State have undertaken to say that if the active masses are not sufficient, action will be taken. If current account holders prefer to have a tax credit rather than a government bond, the debt exposure is reduced, but there are many families. Up to 100,000 euros were repaid in cash, above which was transformed into securities. I don’t want winning the case to cause damage to the current situation. This is also a problem for Asset that we are managing. One of the acts is the law whereby assets and liabilities go to the Savings Bank. The negotiation with Asset does not directly concern the government but Bcsm and partners. The government hopes that a definition can be reached that avoids further appeal to the court. The State is a shareholder of the Central Bank and will have to participate pro rata in any type of agreement which provides for the payment of damages. There is technical work to be carried out, we hope promptly, to arrive at a definition and begin to close the pending issues.
Finally, on the reliability of the banking system, the IMF acknowledged the enormous progress made. Let’s base ourselves on what the interlocutors say, liquidity and capital profiles have grown, on the income profile after years there is no longer a loss. The system has not healed but it is in the process of healing and today the central bank hearing is important to talk about securitization. Our system is no worse than other systems even on our doorstep.