Economist Michele Geraci, as a guest on a Rete4 talk show yesterday, debunked the EU fake “Recovery Fund ‘’ scheme. He exposed the insanity of borrowing over 120 billion Euro – the only EU member state which borrowed so much money – through Eurobonds, as decided by the Conte2 and Draghi governments.
Those funds are financed through senior Eurobonds, at a 3% interest rate. Italy is debtor to the EU, which is debtor to owners of those senior bonds. No country with access to financial markets, such as Italy, Geraci maintained, should have issued senior bonds, whose holders are privileged in case of a default. This has downgraded the rest of Italy’s significant sovereign debt. Furthermore, had Italy directly issued sovereign debt in senior securities, it would have obtained a lower rate, perhaps 2%.
But the entire plan on how and where to invest that debt is insane. In my view, said Geraci, I would have invested those funds in a few large projects, able to really boost the national economy to a new dimension. A historical reference of how this works is the Apollo project. For Italy, I would accomplish a Berlin-Palermo connection in 9 hours instead of the current 28 hours; it is 2300 km, the same distance between HongKong and Beijing – which is covered in 9 hours by Chinese trains.
