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Former European Central Bank chief, and one of the architect’s of Europe disaster Mario Draghi, made a hollow call on European governments on Tuesday to ensure the colossal amounts of debt countries are running up in the wake of the coronavirus pandemic are invested in upgrading their economies so that future generations can benefit.
When he himself was in charge he laid waste to good monetary policy and economic management to further his socialist agenda.
“The debt created by the pandemic is unprecedented and will have to be repaid mainly by those who are young today,” Draghi warned at the opening of the “Meeting 2020” in Rimini, an annual international Catholic festival of reflection, those same young people have already been burdened with massive amounts of debt thanks to Draghi, perhaps he even knows that he had already overloaded future generations and there will be nothing to spare to pay for the news spending..
Europe is running up vast amounts of new borrowing because of the huge government subsidies needed to keep businesses and households afloat during the worst of the pandemic and it will have a devastating long term impact on the Euro..
But such debt was only sustainable if it is used for productive purposes, such as investment in youth, infrastructure for production, or research, Draghi said but never did during his time in office.
“In that case, it will be seen as ‘good’ debt,” he said.
“If, however, debt is used for unproductive purposes, it will be seen as ‘bad’ debt and its sustainability will be eroded.”
The eurozone has taken an economic unprecedented hit as a result of months of coronavirus-related lockdowns.
Last month, the European Commission forecast that the 19-nation bloc’s economy would shrink 8.7 percent this year after many countries, including Italy and France, posted double-digit contractions in gross domestic product in the second quarter.
Draghi, largely credited with saving the euro from collapse during the eurozone debt crisis, said the measures taken by governments and the central banks to prop up the economy had been “correct.”
But now, “a massive investment of intellectual and financial resources” for young people was urgent.
“It is therefore our duty to provide them with the means to service this debt, and to do so while living in improved societies,” Draghi stressed, rather than pouring resources into initiatives that generated “guaranteed and immediate political returns.”
“The state of emergency and the measures it has justified will not last forever. Now is the time to demonstrate wisdom in choosing the future we want to build.”