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“A politician becomes a statesman when he thinks of the next generations, and not the next elections” is one of Winston Churchill’s best-known aphorisms.

Never have I thought it more relevant than today.

In an interview published yesterday on Il Corriere della Sera, Ignazio Visco, the Governor of the Bank of Italy, despite highlighting the government’s effort, called for a “change of pace”.

The influence of some factors, first of all the resurgence of the virus and the uncertainty of the future, with their respective consequences on the economic situation and their impact on the financial situation in which our country finds itself (any deflation would be dramatic for  our public accounts), is decisive and makes recovery difficult (and entirely unimaginable without EU aid).

A “change of pace” – a rather emphatic yet generic expression – has been requested by basically everyone, from politicians to entrepreneurs, from the finance sector to the institutions.

I believe that our country will only see a true “change of pace” when the government and the opposition agree on a political “pact” on what to do and how to use the resources that are made available to us.

Something similar has happened in Portugal a few months ago, after the beginning of the epidemic: the leader of the opposition declared in Parliament that, although his party did not agree on certain parts of the plan announced by the government, at the time any political opposition would have exacerbated the crisis further, and therefore he would be voting in favor of it.

A “statesman’s” choice, rather than a “politician’s”

In our case, the decision we need to make are perhaps even greater and more urgent, and “day by day” measures are certainly not helping.

Writing plans made up of hundreds of points is the same as not writing them at all. 10 points would be enough (we all know what the real weaknesses of our country are, starting with the Public Administration and the infrastructures): just a few steps, but taken with purpose and in concert.

Taking advantage of the favorable moment (by which we refer to the financial markets) in which our country finds itself is fundamental.

The cost of public debt has never been so low (on Friday it was at around 0.70% as a 10-year yield, with a spread of around 120bp) and the prospects, at least for the next few months, remain very interesting.  And any recovery cannot ignore the sustainability of the debt (the less interest our country will have to pay to those who purchase its bonds, the greater our primary surplus will be)

Today American markets are closed for Columbus Day (nevertheless, futures are being traded and are currently positive).

A very positive day (night for us) on the Asian markets, especially for China. There are two main reasons: on the one hand, the Central Bank has canceled, from today, the compulsory reserve obligation for financial operators for currency transactions; on the other, President Xi Jinping has declared that he wants to open the Chinese market further to foreign companies that want to invest in that country.

Oil prices are down, due to the expectations of an increase in production (Libyan oil is also on the way to the market, mining activities having restarted).

Gold remains “high”, strengthening at around $ 1.935 per ounce.

€ / $ stable at 1.18

Roberto Ravera

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