San Marino. CSdL, Lampa: “The internal debt must be financed with internal resources”
Debt, the sword of Damocles hanging over the head of San Marino and its citizens, was one of the topics addressed by the CSdL Secretary Enzo Merlini in the 37th episode of “CSdL Informa”.
The news was reported by the CSdL, which specified: “With respect to the 2022 budget adjustment, it is important to know where the truth lies – began Merlini – between what the Finance Secretary Marco Gatti says, who claims an operating surplus of 5 million, and what Rete says, who instead complains of a deficit of 76 million.
It is paradoxical that in a country we have to attend a council debate without there being univocal interpretation on the real state of the public finances, with such sensational differences. It is not influential, because the choices to be made would be totally different from each other. If it is true that all is well, expansionary measures can be expected in the budget law. If, on the other hand, Rete were right, the reduction of the deficit should have parity.
“On foreign debt – Merlini pointed out – the Confederation of Labor was among the few who sounded the alarm, also feeling branded as defeatist; debt in itself is not an absolute drama, if it is necessary, but to approach the markets you need to have your accounts in order and know what the state must do with that money. At the time of refinancing them there is just over a year left, and it is something that must be prepared in time; it is not certain that the markets will respond in the same way. At this contingent moment we cannot do without those 340 million that we have forfeited by buying financial securities on the international market, because if we did not refinance that debt it would mean making the country go bankrupt.
An Rtv broadcast dedicated to foreign debt was recently aired in which Prof. Lamp, economist at the University of Macerata, on whose speech the CSdL Secretary focused. “This expert has made his accurate technical analysis, arguing that the internal expenditure of a state should be financed as much as possible with internal resources. At the same time, he recalled that countries that took on foreign debt to finance domestic spending ended badly! An alarming phrase, the latter, but there is no doubt that it is an important opinion with respect to this choice that our country has made, in the closed rooms of the Government and hidden from the population, and which will have enormous consequences especially for future generations.
Foreign debt cannot be treated lightly; San Marino is in any case a country that has ample wealth, with 5 and a half billion in economic resources of citizens and businesses, plus unquantified but nonetheless considerable real estate assets. Since the riches are there, they will allow us to meet the expenses to be incurred. The debt contracted to save the banks, that is almost everything, required the issue of internal government bonds (which were not only the irredeemable ones of the Cassa di Risparmio), aimed at the citizens and companies of San Marino.
But still today citizens do not have all the guarantees to buy debt securities in our country; it is a land that must be cultivated, a trust that must be conquered. Secretary Gatti stated that one of the next steps is to create the internal secondary market for government bonds, to give those who buy them the possibility of being able to resell them whenever they want.
This is the step that should have been taken at the beginning of the legislature, and not come out now by supporting this need, because it could be too late. Of course I hope I’m wrong. We hope that the markets are eager to buy our government bonds, and that we will be able to get a low interest rate.
But the trend, on the contrary, sees a rise in interest rates; moreover, our foreign debt securities – unlike those of other countries, which have different maturities – all mature at once, and therefore must be refinanced at the same time. The risk that it will cost us a mountain of interest is real. We must urge the Government to ensure that choices such as these are not taken on the citizens’ heads, but through a broad comparison and thoroughly evaluating all possible alternatives.