Lockdown bis scares, ECB thinks about debt cancellation?

As predicted by many, unfortunately, with the autumn season and in view of the winter one, the virus has regained strength, after one partial respite during the summer months. All of Europe, albeit gradually, is forced to run for cover with increasingly restrictive measures that look a lot like a second lockdown.

They know something France, Spain and the United Kingdom, definitely in bad shape Italy that – after a period of relative tranquility when the contagion curve was rather under control – now it was necessary to intervene, with DPCM blows, to face the new wave.

The curve continues to grow as the recovery, not only the European one, but also the global one is moving away with inevitable repercussions on the levels of public debt, already monstre, which will rise well beyond forecasts. Per Italy, for example, exceeding the debt-to-GDP ratio to 160% would no longer be a taboo. France and Spain would break through 130%, with Germany not expected to go beyond 75%, the only exception among the big ones.

But the locomotive of Europe is also in danger of slowing down. Chancellor Merkel said it clearly yesterday, in Berlin, at a press conference, answering questions on the day in which the semi-lockdown. “We must be aware that we are in one pandemic, and that it is a particular event. It can probably be said that it is a an event that happens once every century “, also specifying that “The light at the end of the tunnel is still quite far away”.

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And here comes a sensational as well as suggestive hypothesis to make its way. Cancel debts contracts during the Covid pandemic. Rumors relaunched late yesterday by Dagospia according to which there would be – conditionally a must – a discussion between the Brussels commissioners to make the European Union survive, with the countries most in crisis, Italy, Spain, Greece, but also France in pressing on the ECB for a reset of their debt.

For now everyone denies, including Eurotower. The President herself Lagarde – which according to Dagospia would have opened the hypothesis – in reality a few days ago he had ruled out an intervention in this sense: “Ask the ECB to cancel public debt would be like asking to violate the European Treaties and I think that one point on which we must hammer in the face of these requests is that debts must be repaid “, he replied during a joint hearing by teleconference with the Chambers of Deputies of France and Germany.

However, there are a couple of considerations to make: the hoped-for recovery a V becomes more and more difficult and seems to give way to a more likely recovery a W. Not only that, thedepending on the second wave of the pandemic it’s more scary than it is Europe had put into account, with the risk of giving the economies of the member countries. And precisely for this reason, no move – even the most sensational – is from exclude a priori.


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