When Monti bowed to banksters

Α short story of how a country can be loaded with 40 billion euros additional debt in just one day

In February 2012, the new Italian president, Mario Monti, meets with the president of one of the largest Italian banks in his office. The banker said to Monti, directly, that his bank issued private bonds of 40 billion euros total value.

"Certainly Mr. President, as everyone knows our bank's difficult position, no one will buy them unless you give us Italian state surety". "You say that the Italian taxpayers must guarantee for your new huge debts?", said Monti with surprise for the audacity of the banker. "That's exactly what I'm saying, Mr. Monti", said the banker, confirming his audacity. "Through the state surety I will be able, even today, to deposit these bonds at the ECB and get fresh money. Otherwise, the bank will not open tomorrow, the country will fall in chaos and you government will collapse".

This is roughly the way that the technocrat president was put in a dilemma: should he give state surety to the cheeky banker, increasing public debt by 40 billion euros in just one day? He asked his visitor to wait outside his office and made a phone call to the Minister of Finance and to the president of the ECB, Mario Draghi. They both told him not to even think about let the bank collapse.

A desolate Monti asked from his secretary to bring the banker back and signed the papers of state surety for the new private debt. "Instead of lending some money given by Draghi, the banks come to the state, which is about to default, and ask for guarantees!", Monti thought.

A few days later, a message came from Brussels for their "selected" Monti, as they observed an "abrupt" rise of the Italian public debt which was in contrast with Monti's "mission" to reduce debt. "With these new data, European Commission expects from you to introduce new measures for the restriction of the fiscal deficit of Italy", was the ending of this message.

Three weeks later, an overwhelmed Mario Monti announced new measures in the Italian parliament, which forced Italy in a new recession, as proved little later.

Key information from the article “Don't they know what they do?”, by Yanis Varoufakis, from the HotDoc magazine, Issue 41, Dec. 2013.
(translated by SCH)

Related stories:

http://failedevolution.blogspot.gr/2012/07/normal-0-false-false-false.html

http://failedevolution.blogspot.gr/2012/09/lea-jacta-est-by-emperor-draghi.html

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