The Italian Treasury should try to reduce its dependence on foreign investors and exploit the private savings of citizens by selling them government debt, former Finance Minister Giulio Tremonti said.
The debt sales “should be voluntary, based on issuances of new government securities with sensible maturities and rates,” he said in the founding statement of his new “Work and Freedom” political movement posted over the weekend on the website. The bonds shouldn’t be taxable and would have “rates a little bit lower and maturities a little bit longer than existing debt, but guaranteed by the priceless safety that we, Italians, are able to produce by ourselves.”
Italy’s debt at almost 2 trillion euros ($2.6 trillion) or more than 120 percent of gross domestic product, is the euro region’s second-biggest. In July, about 65 percent of public debt was owned locally, up from 57 percent in the same month a year earlier, Bank of Italy data show.
The extra yield, or spread, investors demand to hold 10-year Italian bonds instead of German bunds fell to 3.57 percentage points today from a euro-era record of 5.75 points on Nov. 9, 2011. Still, that’s more than the five-year average of 1.76 percentage points.
“We are forced to suffer both from financial speculation, marked by the fearful and obsessive siren of the spread, and the competition with other countries,” Tremonti said. “The real Save Italy is Buy Italy,” he said in a reference to the name of the decree passed by Prime Minister Mario Monti’s government last year to contain the country’s debt and meet the commitment agreed with the European Union of erasing the nation’s structural deficit by the end of 2013.