The decision as to whether Italian mini-buoni ordinari del
Tesoro (or mini-BOTs, an Italian Treasury
short-term credit note)
are a liability could be crucial for Italy’s
future in the EU and their fiscal performance.
"The mini-BOT might be an option
for Italy to pay back arrears more quickly, but there are all
sorts of issues on potential implementation," said ING
associate economist Carlo Cocuzzo told IFLR.
Italy risks conflict with the EU if the
issuance of mini-BOTs is relied upon as a tool for fiscal
expansion. But for now, the country’s economic
fragility is a local issue which is not expected to destabilise
the eurozone in the short-term.
Following the end of Italy’s political
deadlock, Five Star Movement and League revealed plans to issue
mini-BOTs, securities to pay off companies and individuals owed
government money. These instruments could then be accepted for
tax payments or, in the future,...