Original in Italian : http://www.ilsole24ore.com/art/notizie/2016-04-13/padoan-misure-decisive-il-rilancio-banche-072045.shtml?uuid=ACvS0d6C&p=5
Google Translation
Minister Padoan, to overcome the fragility of the banking system, government and private financial system have developed a comprehensive system of measures for the revival of the sector. How did it come to this change?
This is an operation that involves the private sector, with an intervention that takes place in parallel to the new measures that the Government will approve in the Council of Ministers next week to speed up bankruptcy and insolvency procedures.
What role did the government, particularly the Ministry of Economy, in the birth of the fund Atlas privately held?
The MEF and the Government played a role that I would describe as a facilitator. The fund will be managed by a private asset management company and will be funded by private capital on a purely voluntary basis. It will have two main objectives: to contribute to some bank recapitalisations, with functions and backstop of last resort safety net, and set up a mechanism of buying and credit management in suffering, just as market participants operating in the sector , also uses the leverage expanding the range compared to the paid capital.
Of 5-6 billion that should be collected from the bottom, how many will be destined to the guarantee of the capital increases and how the purchase of bad loans?
The rules for allocation of the fund will depend on the needs and market acceptances of several recapitalisations.
The stock market, after two days of euphoria, yesterday investors' doubts have emerged. He believes that the dual plan will work?
In recent days there has been much hype, perhaps even too much to be concentrated in just two days. The markets do not yet have a complete picture, since the fund's launch has just been announced, and this lack of information results in nervousness. Moreover, the markets will want to assess not only the base but also the new measures of the government, which I consider crucial to permanently deal with the problem of suffering. The new measure will complete the reforms already carried out by the Government. This is an important step which fills a delay of Italy than in other European countries.
How much does the problem of bad debts on banks' ability to extend credit?
I am the first to admit that the vulnerability of the system due all'ingente stock of bad loans is a problem that is there and needs to be addressed. The government has already intervened in recent months with a series of measures, and the next will be decisive. We are working with Minister Orlando to anticipate by decree certain provisions contained in the enabling act before Parliament in the field of bankruptcy law. If the times of disputes on loans is more than halved, the market value of the credits in suffering it has a benefit. Solved the problem of bad debts will share real economy. I add that the removal of part of the stock of loans from bank balance sheets will also increase the effectiveness of monetary policy of the ECB for Italy.
It is a problem that could be addressed before?
Other countries, including Spain, have done it years ago with public capital. Since August 1, 2013 the European rules are stopping us.
About rules, the fund is likely to be plan Atlas rejected by the EU commission and the European supervision of the ECB?
I do not see any risk. From the point of view of competition law can not presence there any role given that the state, the transaction is entirely private: a private asset management company that creates a fund with private capital on a voluntary basis. With unique monitoring of the ECB is already an ongoing fruitful dialogue conducted by the Bank of Italy and from Frankfurt there is a very constructive attitude, I think they see welcome this initiative.
Too many rules imposed by the rapid deployment Banking Union? What do you think of the German proposal to limit the weight of government bonds in banks' balance?
Italy is among the supporters Banking Union, but we request that you now complete, as planned, with the third pillar, which provides for the guarantee of European deposits. The proposal to limit government securities on bank balance sheets is wrong and damaging Italy's judgment because it introduces elements of rigidity in a market in which instead must be free to diversify investments. And in any case, we believe that the issue should not be addressed at European level but at a global level and in the institutions responsible for doing so such as the Basel Committee.
2015 was the year of the return of foreign investors in our country. He believes that the confidence is still there or you're fading? And the package of measures on banks may contribute to the confidence of investors?
The banking system is a delicate junction. There are efficiency issues of individual banks and systemic factors. The measures that were taken reinforce the perception of confidence in the banking system and the country's stability. More generally, investor sentiment towards Italy remains positive. It was of interest in anticipation of the promised reforms, was approved when the reforms were enacted, will support now that the reforms are implemented.
In the decree there will be provisions for compensation to bondholders junior of 4 banks whose bankruptcy was decreed? I think that's the correct context.
The Def confirms its objective of revenue from privatization in 2016 amounting to 0.5% of GDP, despite the loss of the FS quotation.
Harnessing public enterprises is not just about selling a piece of the state to raise cash for the purpose of killing of debt but it also means exposing the management of the competition and the scrutiny of the markets to improve outcomes and quality of services. This applies to Poste, Fs, ENAV.
But how will replace in 2016 the revenue was expected at Fs? There are still areas of improvement, even for the same post office. The ability to control by the shareholder can you guarantee with a share of lower participation, as in the case of Eni and Enel.
So you are thinking about the placement of additional shares Poste market?
It's a possibility, anyway always maintaining control.
Growth remains the priority objective of the government despite the slowdown?
The growth of 2016 will be for Italy to 50% higher than that recorded in 2015, from 0.8% to 1.2%. It is less than what we would like, but the growth rate was affected by the deterioration of the economic situation in the US and Europe, with the slowdown in investment and international trade. Even in Italy the contribution to the growth of exports is much lower than that of investment and consumption.
There are factors on which bets to strengthen growth in the coming months?
First of all, investment, private and public, which are a component of demand in the short term but also a factor of development and competitiveness in the medium term. To unlock public investments have exceeded the internal stability pact, and even push private investment have a new package of financial measures for growth.
What is it?
Last year we did a lot on the regulatory plan to move the Italian enterprises to the capital market and thus rebalance the funding system too bancocentrico. We gave incentives for investments and recapitalizations, looking always to the company. Now we shift the focus on the investor firm with incentives also important, for example for funds that invest in small and medium-sized enterprises. We want to move a proportion of savings run to the Italian company. This can bring foreign capital to the Italian companies.
Data that you have on public investment? You are releasing something?
The first results are there. Italy is among the first countries in the use of resources Bei Juncker bottom and it was not easy to start this mechanism. And then come back to the municipalities to invest due to the overcoming of the domestic stability pact that when I started doing this work, I immediately became a bureaucratic monster.
You have begun to define the context of the forthcoming Stability Law in the fall. Remains the boulder of safeguard clauses more than 15 billion that you want to remove. Remain resources for growth and stimulate investment?
The Italy's consolidation effort places our country among the best performing in Europe, and we must continue to bring down the debt. So the fiscal space, under equal conditions, is limited. It becomes important to decide how to use it.
We are the first proposals: the prime minister speaks of extension of 80 euro to the lowest pensions.
At this stage there are various hypotheses on the carpet. It is early to say.
The reduction in the tax burden remains one of your goals?
It is one of the pillars of government policy, but as I often say, to be credible must be financed by spending cuts. This is why the spending review continues.
Here too there is a widespread perception that the spending review has stopped or even there's never been.
It is not true. This year's spending review was 25 billion thanks to the law of stability and the measures taken in the preceding months. Equally important are new mechanisms that we are starting to structurally change the spending, such as the centralization of purchasing in health care, where spending centers fell by 33 thousand to 35. Or the reform of the budgetary procedure. Starting in 2017 we will have a permanent spending review that forces you to review not only the costs at the margin but to think back on all spending. With the result of giving more flexibility to the budget.
Slippage of the tie to 2019 has already agreed with Brussels? The measures that are in Def have been discussed by the government but also shared with the commission, which has yet to rule on the built-in flexibility in Def.
He is confident on the approval of the Def and flexibility by the EU Commission?
I do not think there will be problems. The Def does not come to the committee on the table as well, but again, we discussed it, even acknowledging some observations. The Italian position is that the macroeconomic framework that is in Def is absolutely compatible with European rules. The displacement of a balanced budget is consistent with the international framework deteriorated. And then the fiscal adjustment is related to the method used to calculate the structural balance, a technical issue but with serious political implications for the lives of citizens. Italy moves between Scylla and Charybdis. On the one hand if you do too much restriction, it generates a dynamic of debt that gets worse rather than better. On the other hand if you do not take into account the objective of debt reduction, market expectations and thus worsen the country's costs for market funding increase. The path is narrow but we continue to follow him.
Change towards Europe. Where are we?
My feeling is that relations with Europe are much improved, and the dialogue is more constructive, at least in the field of fiscal and competition policies. It is recognized that Italy continues to work and make decisions that are within the rules. To those who say we are asking too much flexibility I have answered many times: we ask the flexibility allowed by the rules. This more constructive relationship with the European institutions is the result of an attitude that at some stage it seemed only aggressive and that instead it is of substantial proposal. Since the presidency we said that Europe had to give different priorities, growth and employment. This has translated into facts, such as flexibility. And recently we made a strategic proposal that is being discussed with great attention. Italy is definitely not cramped in a corner. It is seen as an important country in which there remain problems that the government is facing.
Flexibility pensions in output. It is premature to talk about it?
Our pension system is among the strongest in Europe, and this strength is a value that must be protected because it contributes to the sustainability of public debt. The pension system can be improved, even for the implications that some changes might have on the labor market in terms of employment of young people. We are still in the initial phase of the discussion but the important thing is that we take into account the public finance constraints.
That suggests the publication of papers Panama?
As for Italy, I confirm that we are a country at the forefront in the fight against tax havens. At the same time the Panama Papers show that there are still many blacks holes in the international fight against tax evasion, especially in terms of localization of corporate structures. We take initiatives in international fora, both formal and informal, such as the G5 of which Italy is part with France, England, Spain and Germany. It must first be emphasized the firmness in the fight against tax evasion by reinforcing existing international cooperation. It serves a cooperation which provides rapid exchange and analysis of the joint venture, even to get to real joint audit between tax authorities of different countries. It can also improve the transparency of beneficial owners of accounts and financial products, going to all the people that own checking and exchanging such information also for tax purposes.
Do you plan to reuse the instrument of voluntary disclosure? Domestically we are doing a "coupon" to the voluntary disclosure mechanisms to understand what results he produced and whether there are still room for use. If a machine is working and there are still kilometers to go, you can certainly use again.