Northern League calls for block on Italy's bonds

Click to follow
ITALY's secessionist Northern League has been delighting its ever more numerous followers with daring, zany and outrageous declarations. But this time it may have gone too far.

First it called for a nationwide tax protest. Then it urged Italians to invest, not in Italy but abroad. And now, with the government fighting to rescue Italy's international credibility, it has scandalised the established parties - and not only them - by advising Italians not to invest in state bonds.

State bonds are a favourite investment for millions of ordinary Italians, and their future, during the current financial and economic crisis, has been as hot a subject as mortgage rates during similar phases in Britain.

Marco Formentini, the League's floor leader in the lower house of parliament, set off a bombshell yesterday by advising the public, on behalf of his party, not to buy any more. 'At this moment any citizen who lends money to the state does so at his own risk. We have the duty to tell him that he may never see it again.'

Shocked, and perhaps secretly delighted at being given a good weapon with which to beat this alarmingly successful party, the established politicians hit back.

Bettino Craxi, the Socialist leader, retorted: 'They are trying to ruin Italy.' The League, said Piero Barucci, the Budget Minister, was showing its true face: 'In order to gain power it is apparently willing to walk over the political, economic and social ruins of Italy.' The president of the Senate, Giovanni Spadolini, said that 'secession of savings is the most serious form of secession', alluding to the League's much vaunted intention to split north Italy from the rest.

The League's intention, according to Massimo Riva, columnist in the daily La Repubblica, is the bankruptcy of Italy, and with it the fall of the present party political system. Needless to say, he went on: 'This is the best and most certain way of reducing Italians' past and future savings to zero.'

With or without the League's encouragement, many Italians are once more tempted to take their severely battered lire abroad, particularly to Austria, where banks are openly inviting their custom. The fiscal police have taken to patrolling the borders, and yesterday caught a businessman from Bressanone trying to smuggle 174m lire ( pounds 90,000) out of the country - 154m more than allowed.

Evidently concerned to restore confidence, the government last night reduced its fixed interest advance rate - the Lombard rate - by half a percentage point to 16 per cent. The discount rate, which had been raised by 1.75 per cent to 15 per cent during the lost fight to save the lira from devaluation last month, remains unchanged.

With the same aim in mind, the fragile government of the Prime Minister, Giuliano Amato, yesterday also called a confidence vote on one of its crucial deficit-cutting bills now before parliament; not only on the bill itself but every single clause.

Shouts of 'coup d'etat' rose from opposition benches, and the trade unions, who had been fighting for changes, were furious. The bill should be voted today or tomorrow: the unions are holding a general strike on Tuesday.