Debt crisis: Savers rally to patriotic call
29 November 2011
Will savers prove to be the ultimate defence against the crisis? wonders La Tribune, which reports that “amid demands for the re-nationalisation of European debts, the idea of appealing to national solidarity has gained ground in recent months.”
Last week, the Belgian government, which has had to contend with an abrupt increase in the cost of obtaining finance from the markets, launched a well-advertised campaign to sell government bonds to the country’s population. […] At the height of the political crisis, the main goal of the exercise was to demonstrate the unity of the Belgian population to the markets.
For La Libre Belgique, which leads with the front-page headline, “Government bonds: everyone wants the five-year issue,” the initiative has been a “heaven-sent” success. The newspaper enthusiastically points out that the threshold of two billion invested is now in sight, and notes that it is the five-year government bond, offering a 4% rate of interest, which has proved to be the most successful. La Libre adds that the issue, launched on the 24, 25 and 28 of November “was boosted by a call for Belgians to save voiced by Prime Minister Yves Leterme who tendered his resignation in 2008.”
In Italy, Corriere della Sera reports that “BTP day” (government bonds day), which was held on 28 November, was a major success in the drive to combat speculation. With yields of more than 7%, the three- and ten-year bonds offered attractive terms, and the initiative was facilitated by the banks’ decision to cut commission costs. “The goal is to send a strong message of commitment,” commented the Italian bankers association (ABI), quoted by the Milan daily. The purchase of bonds by private individuals "can be seen as an important demonstration of the confidence Italians still have in their country." A further “BTP day” is planned for 12 December.
However, in France, which runs the risk of losing its AAA rating, the population appears reluctant to fly to the rescue of the country’s finances, reports La Tribune. According to a survey conducted by Harris Interactive JOL Press, less than a third of respondents said they were ready to buy French debt offered at rates equivalent to those available on the markets:
We might have assumed, amid an atmosphere of national crisis marked by the President and the Prime Minister’s constant references to 1945 and the "war" against the markets, that the French population would be more motivated. Exit the hope of a major bond sale to the people, which Nicolas Sarkozy momentarily seemed to favour last year...
The French business paper worries about the “difficult realities” of the country’s situation: “as a group the French spend more than they produce.”