Linha de separação

17 de junho de 2019


L’Italie est-elle en train de créer une monnaie parallèle?

Pour l’instant, ce n’est qu’une décision de principe : le gouvernement italien envisage de créer des bons du trésor (mini-BOTs) censés officiellement servir de moyens de paiement pour ses arriérés. L’initiative inquiète déjà les responsables européens et les financiers : ces mini-BOTs pourraient très vite se transformer en monnaie parallèle interne à l’Italie, au risque de miner l’euro.
Many things are unclear about the idea that Italy’s government could issue what would amount to small-denomination IOUs to pay some of its bills. How would the so-called mini-BOTs work? Are they a clever way of giving the country’s sluggish economy a boost? Would they amount to a parallel currency to the euro, or even a prelude to leaving it? Are they a sly way of getting around the European Union’s rules on debt? One thing is sure: markets don’t like any of these possibilities.

1. What are mini-BOTs?

So far, just an idea. The original proposal called for the creation of small-value notes (from 1 euro to 500 euros) that would be issued to meet overdue payments to government suppliers. They could also be issued as credits for up to 25,000 euros each ($28,300) to taxpayers entitled to refunds. Like an IOU from the government, mini-BOTs would pay no interest and have no due date. They would be guaranteed by the state and would be accepted by the government for the payment of taxes. There would be no obligation for third parties to accept them. The name is a play on BOT, or Buoni Ordinari del Tesoro, a common short-term Italian Treasury bill.

2. Who’s pushing for them?

The governing populist coalition formed by the rightist League party and anti-establishment Five Star Movement originally included the idea in its May 2018 legislative agenda. The League said at the time that issuing 70 billion to 100 billion euros of mini-BOTs and using them to pay suppliers or creditors could kick start the economy. The plan was drafted by League economic adviser Claudio Borghi, who went on television during the 2018 general election campaign to show test designs for the note. Just like Italy’s former currency, the lira, the notes featured pictures of famous Italians, such as football player Marco Tardelli just after scoring a goal in the 1982 World Cup final match won by Italy.

3. Why are mini-BOTs back in the news?

The lower house of Italy’s parliament unanimously approved a motion on May 28 asking the government to accelerate payments to creditors and suppliers, including with mini-Treasury bills. On May 31, the Treasury deniedany plans to issue the securities are currently being considered. But amid Italy’s struggle with the European Commission over its fiscal spending -- which included a rare formal rebuke on May 29 and the recommendation of a disciplinary process on June 5 -- the mini-BOTs could be a way around limits on government debt.

4. What’s the reaction to that idea?

European Central Bank President Mario Draghi weighed in on June 6, saying the instruments would either be considered money, and therefore illegal in the euro area, or a new form of debt that would add to Italy’s huge outstanding obligations, which already amount to 133 percent of gross domestic product. Italian Finance Minister Giovanni Tria also rejected the idea, echoing Draghi’s words and irritating the coalition leaders. On June 10, Prime Minister Giuseppe Conte said in an interview with newspaper Corriere della Sera that the government has never discussed issuing mini-BOTs, adding there are other ways to speed up payment of arrears, which have anyway been reduced in the past year.

5. Why are people so worried?

Investors are concerned that the mini bills could become a de facto parallel currency, since they could be used not only to pay taxes but also to buy goods and services from the government and might be traded. They have even been touted as a temporary means of payment in a transitional period following Italy’s exit from the euro. The government has denied they would be legal tender, as only the European Central Bank can print money in the euro zone. Borghi pushed back against Draghi, saying that mini-BOTs would just securitize already existing debt.

6. Was the Treasury’s reassurance sufficient?

In the short term, yes, because Italian bonds have rallied to unwind all the losses suffered since the government took office a year ago. In the longer term, probably not. The government supported the motion in the Lower House, which was approved unanimously. The main opposition group, the Democratic Party, later backtracked on its support, saying its members weren’t aware of the last-minute inclusion of mini-bonds in the text. Moody’s Investors Service said the fact that the proposal resurfaced again is credit negative.

7. Has anything like this ever been tried before?

Argentina issued small-bill IOUs known as Lecops to pay civil servants in the early 2000s amid surging inflation. California temporarily used IOUs in 2009 when it ran short of cash, mainly to pay vendors and for personal income tax refunds. Greek leaders considered issuing electronic IOUs in 2015 as they were negotiating with creditors to keep the country in the euro. That’s an unnerving precedent to some, given hints made in the past by Italy’s populists about leaving the euro -- but they continue to deny such plans at the moment.

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