All the alarms are lit in Italy and in the European Union, when last night a draft of the agreement between the 5 Star Movement (M5E) and the Northern League, of the extreme right, was broadcast last night.
It is a bomb proposal: the exit of Italy from the european currency. Another surprising proposal is to ask the European Central Bank (ECB) for the cancellation of 250.0000 million of public debt (almost 10% of Italian public debt that reaches 132% of GDP). Equally controversial is the agreement to remove the sanctions against Putin.
The draft, published by the digital “Huffington Post”, is dated Monday morning, after the meetings that the technicians and the leaders of the M5E, Luigi di Maio, and of the North League, Matteo Salvini, had held on Saturday and Sunday in Milan. In Europe, panic broke out when the draft was released.
The two populist parties indicated in a joint note, after the text became public, that it had been modified during the last two meetings, on Monday and Tuesday. Anyway, sources of the M5E confirm the agreement on the idea of asking the ECB for the cancellation of 250,000 million State securities that the European Central Bank will have in its balance at the end of Quantitative Easing (the ECB intervention in monetary policy to stimulate economic growth). In addition, the two parties agreed to create a kind of real estate fund to sell public assets worth 200,000 million euros.
After these revelations, today the Milan Stock Exchange falls (-0.50), being the worst in Europe, while raising the risk premium to 140 points.
Renegotiate European treaties
The draft of the agreement and the intention of the League and the M5E to “renegotiate the treaties of the European Union” and “radically modify” the Stability Pact, will cause concern in the economic world and in Brussels. The European concerns that dominate in recent days, particularly yesterday, with three members of the European Commission warning about the intention of the two populist parties in relation to public budget and immigration.