# Interviews
Italian below, published 7 December 2016
1. Despite the negative outcome of the italian referendum, the feared deluge on the markets didn’t happen, neither on the Italian one. Why?
One can think of many reasons why markets have not behaved as many had feared before. It is impossible to know with certainty. I personally think that in an environment with heavy purchases of the ECB in the sovereign bond markets and a more stable banking union framework, such political shocks are less relevant. Moreover, as of today, the political consequences of the vote are still quite unclear. I would argue, however, that the rejection of the constitutional reform is bad news for the long-term functioning of the Italian political system. In a sense, Italy appears to stay the same: 64 prime minister in 70 years of history of the Republic. Fundamentally, the question is whether this is a good way to govern and improve the results for citizens in Italy.
2. Do you think that the Ecb firm position helped to take the strain?
The ECB’s QE programme is certainly a stabilising factor. But the ECB starts to run a serious reputation risk on the banks. The problems in all 4 big banks in Italy were already detected in the stress tests of 2014 but they are still there. The hope expressed by many was that Italy would first reform the political system and then one would clean the banks. I think now the ECB cannot afford to wait. It should force change in Italian banks as painful as this may be to some.
3. On your opinion, how systemic, on an European perspective, is the crisis of Monte dei Paschi? If the recapitalization goes wrong, the markets will continue withstanding?
From the economic literature, we know one important result: delaying the resolution of banking problems is costly for the economy. It means that financing is stuck in zombie companies, growth is subdued and job creation is low. Not resolving banking problems such as the almost €200bn in NPLs in Italy therefore clearly has a systemic dimension. As regards MPS specifically, one should not expect the taxpayer to solve everything. Junior creditors and shareholders will have to carry a part of the burden according to the existing EU framework. I very much doubt that this would lead to systemic problems in the euro area or even in the Italian financial system. However, it requires a careful communication strategy and also protection of private creditors that had bought junior bonds in good faith and could not have known about risks.
Italian
1.
È difficile identificare le tante ragioni per cui il mercato non si è comportato come temuto. In un ambiente di quantitative easing e unione bancaria questi shock sono meno rilevanti. Le conseguenze politiche sono poco chiare ma il risultato del voto va considerato una cattiva notizia sul lungo termine. L’Italia ha avuto troppi governi: c’è da chiedersi se il suo è un buon sistema per governare e migliorare la vita dei cittadini.
2.
Il qe è un fattore di stabilizzazione. Ma la Bce comincia a diventare puntigliosa con i rischi bancari. I problemi delle maggiori banche italiane emersi dagli stress test del 2014 sono ancora lì. Si sperava che l’Italia prima riformasse il sistema politico e poi facesse pulizia nelle banche: la Bce non può più attendere e deve forzare il cambio per quanto doloroso sia per alcuni istituti.
3.
Nella letteratura economica c’è una certezza: ritardare la soluzione dei problemi bancari è costoso per l’economia. I finanziamenti giacciono in aziende decotte, la crescita è sottotono, la creazione di lavoro è lenta. Non risolvere gli Npl ha una dimensione sistemica. Per Mps non ci si può aspettare che lo Stato risolva tutto: obbligazionisti e azionisti devono prendersi parte degli oneri come previsto dalle regole.
©RIPRODUZIONE RISERVATA
Guntram Wolff, direttore Bruegel
