In an interview with Sputnik Italia, the president of the Italian Budget Committee in the parliament, Claudio Borghi, gave some insights into the future of the euro as a currency, the policy of the new leadership of the European Central Bank, ECB President Mario Draghi and the EU’s economy in general.
Most recently, Borghi, who is the author of the book “Basta Euro,” told the Italian outlet Il Foglio that he hoped the euro “falls apart” – something which sparked controversy in Italy. He, however, emphasized that everyone has long known his stance on the issue, detailed in his book, which “offers examples of all the myths that continue to be imposed on us in order to hide the perfect error.”
“However, I must explain the context of this quote. The euro doesn’t work and it’s a fact. Today, we have to pay unacceptable and unforgivable taxes on the (bond yield) spread, which we owe to people who bet on ‘disagreements’ between EU member-states. This is absurd. In this case, Europe cannot venture upon making the ECB the creditor of last resort, that is, to give it the opportunity to balance markets. Today, in the event of a crisis, the ECB can decide not to help one country, but help another instead. Does this seem normal to you? Of course not, and that's why markets are unstable. You cannot disrupt the quantitative easing. In this case, the idea of a united Europe will die, the entire system will collapse, and the euro will fall apart,” he explained to Sputnik.
When asked about whether the bond yield spread would cause any harm to Italy and the sitting government, Borghi explained that if they allowed a reduction in quantitative easing, they would run the risk of large hedge funds using market shares to get the most benefit for themselves.
“It would not be the first time. In 1992, when there was a similar economic situation, [George] Soros was able to make a huge profit by playing in the foreign exchange market. It is often said that individual EU member states should cooperate more closely with the European community, but there are none among them. There are those who grow rich at our expense, and, of course, it is impossible to create a real Union or help poor countries; so you can only fuel conflict,” he said.
Reflecting on the impending retirement of Mario Draghi, the ECB president, Borghi said that Italy was not afraid of his departure, because he had “served his time.”
At the same time, he stressed the need to know the exact steps Draghi’s successors would take on quantitative easing, as well as the government’s desire to receive certain guarantees on the debt issue.
“Sooner or later, even the most economically strong countries may find themselves in a crisis situation. If this happens, and the European countries do not have certain guarantees, then everything will fall apart, and nothing will be the same as before.”
Speaking about the possibility of the ECB becoming the creditor of last resort and the potential delegation of certain economic powers to the European Commission, Borghi stressed that Italy had already lost “too much of [its] economic independence.”
“It’s time that we build a system that would protect all Eurozone members. We are ready to assign a minimum spread, for instance, 150 basis points, although to me, this example already seems to be extreme, it would have been very expensive. Sometimes they say that if there was no differential gear, countries would face a moral risk: I believe that 150 is enough punishment that would force them to refrain from a dangerous economic policy.”
The views expressed in this article are solely those of the speaker and do not necessarily reflect the official position of Sputnik.