\u00a9The law of intellectual property is prohibited in any way unlawful use\/appropriation of this article, with heavy civil and criminal penalties for the infringer.<\/em><\/p>\n\n\n\n ECB President’s ‘backstabbing’ in tested Italy<\/strong><\/strong><\/p>\n\n\n\n In the midst of the titanic struggle waged by the Italian state apparatus,\nnamely the Italian Public Health System to protect the proud Italian people\nfrom the deadly coronavirus pandemic that has created hundreds of dead in Italy\nand has sown terror in all EU member countries and the planet in general, and\nhaving first and foremost EU accepted the accusations by US President Donald\nTrump that for the spread of this virus in Europe is responsible for the EU’s\nincompetence resulting in the disruption of air transport from the EU to the US\nthereby creating strong turbulence on European stock markets and spreads of\nEurozone governmental bonds equally -particularly Italy’s counterparts- ECB\nPresident Christine Lagarde was unpleasantly surprised if not infuriated by her\nstatements of the entire Italian people.<\/p>\n\n\n\n On March 12th, Christine Lagarde President of the ECB managed to give the\ngift shot (ouster) to the terror-scare of coronavirus Italy, plunging Italian\nstock markets and further burst the spreads of Italian Government Bonds.\nWhether it was with cause or not, this attitude of the President of the ECB is\nsomething that will be proven in the future.<\/p>\n\n\n\n On this date in an interview, ECB President Christine Lagarde in a\nreporter’s question whether the ECB intends to use the \u201cPutright Monetary \nTransactions\u201d program to directly buy government bonds of a Eurozone\nmember country facing significant difficulties in order to drastically reduce\nthe size of its government bond spread, \nshe replied that its predecessor’s strategy Super Mario (Mario \nDraghi) will not be repeated again.<\/p>\n\n\n\n In other words, the ECB will not use the permitted flexibility laid down in\nits statutes as it is not the ECB’s job to stabilise spreads on the government\nbonds of euro area member countries. Its\nstatements triggered the biggest annual fall on the Milan stock exchange\n(-17%), while the spread in Italian government bonds reached 270 b.p. <\/p>\n\n\n\n In fact, the ECB President’s concrete statements were cancelled in the eyes\nof investors the EU Commission’s announced support measures for Italy\u2019s\neconomy. As another “Brutus”, Christine Lagarde stabbed the knife in\nthe “body” of the much-tired Italian economy.<\/p>\n\n\n\n Then, in a subsequent interview with US channel CNBC, the ECB President\ninsisted on her initial statements without correcting anything and saying that\n“the only flexibility that can be applied in the Eurozone is that allowed\nby the rules regarding the government bond purchase program.”<\/p>\n\n\n\n Of course, the ECB in the coming days and through its official website and the statements of its Chief Economist Philip R. Lane tried to mitigate the upheaval caused by the ECB President’s statements by clarifying that “the ECB can focus on buying government bonds in a particular member country in order to stabilise markets and spreads” by continuing, including that “it is not excluded that interest rates will be cut and the ECB’s deflationary obsession mitigated.”<\/p>\n\n\n\n Following an extraordinary conference call at midnight on Wednesday,\nMarch 18, the ECB announced an emergency bond purchase program due to the new coronavirus\n(Covid-19) pandemic totaling \u20ac 750bn. This new bond purchase program is called\nPandemic Emergency Purchase Program – PEPP.<\/p>\n\n\n\n Bond purchases will take place by the end of 2020 and will include all\nasset classes that are eligible under the existing purchase plan (AAP).<\/p>\n\n\n\n The questions that need answers<\/strong><\/p>\n\n\n\n But the unanswered questions raised by ECB President Christine Lagarde’s statements need answers. More specifically:<\/p>\n\n\n\n 1.<\/strong> Were the ECB President’s statements random or not while the Italian economy was in a “coma”?<\/p>\n\n\n\n 2.<\/strong> If Christine Lagarde’s specific statements were not random, why did these happen when the issue was the expansion of the spread of the Italian government bonds and whether the Italian economy would be helped by ECB policies?<\/p>\n\n\n\n Maybe because she wanted to cancel out her predecessor\u2019s (Mario Draghi) quantitative easing policy in the eyes of all global potential investors and leaders of the EU member countries?<\/p>\n\n\n\n 3. <\/strong>What was the goal of these statements?Is the ECB preparing the ground for a shift in a monetary policy that follows the IMF doctrine?<\/p>\n\n\n\n 4.<\/strong> If so, why is this IMF monetary policy more advantageous for the Eurozone when the common applied fiscal policy in the Eurozone is deafeningly absent? Is it about the entire Eurozone leadership to face no-exit events?<\/p>\n\n\n\n 5.<\/strong> Does the ultimate goal is for the competitiveness of the Italian economy to remain immersed with its “head” in the water and when it needs help to recover (by pulling its head out of the water) to be pushed back into the ‘water’ on the benefit of the competitiveness of other euro area member economies that in difficult times like today desperately need to increase their exports to avoid entering a deep recession;<\/p>\n\n\n\n 6.<\/strong> Or the goal of these statements is for diamond-companies in the Italian economy to enter in a long-term low valuation phase due to low competitiveness, and low revenue-high spending status creating the conditions for cheap acquisition by other European companies?<\/p>\n\n\n\n 7.<\/strong> Or the aim was to give Italy the message that the ‘informal’ hostage-taking of its economy (through non-assistance from the ECB) would be stopped if and when the Italian Government stops looking at investments from foreign countries (e.g. China) by always following the Brussels suggestions?<\/p>\n\n\n\n Russia’s ally China a few months ago signed a very\ngenerous economic treaty-cooperation with Italy, but also with other EU member\ncountries such as France, while regulating China’s trade relations in the\nMediterranean Sea and with Italy standing next to China, even if the EU was\nopposed to this choice of the Italian government.<\/p>\n\n\n\n Surely all these unanswered questions so far will have to be answered in\nthe future.<\/p>\n","protected":false},"excerpt":{"rendered":" The European edifice, called the EU since its inception to date and with the EU’s current colossal euro zone, has relied on solidarity between…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[818,390],"tags":[780,62,63,644,1530,1531],"class_list":["post-2042","post","type-post","status-publish","format-standard","hentry","category-europe","category-politics","tag-christine-lagarde","tag-ecb","tag-imf","tag-italy","tag-spreads-on-government-bonds","tag-stock-markets"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/2042","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2042"}],"version-history":[{"count":2,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/2042\/revisions"}],"predecessor-version":[{"id":2052,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/2042\/revisions\/2052"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2042"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2020\/03\/image-41.png\")
Photo by the website www.ilsussidiario.net <\/figcaption><\/figure>\n\n\n\n![\"\"](\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2020\/03\/image-42.png\")
Photo by Office of Presidency of the Italian Republic<\/figcaption><\/figure>\n\n\n\n