Trump Reportedly Offered to Fund Italian Public Debt

President Donald Trump allegedly offered Italian Prime Minister Giuseppe Conte to buy the country’s sovereign bonds, Financial Times reports.

The offer was made during a White House meeting last month, Italian media wrote on Friday, citing three Italian senior officials.  The paper reporting on the offer added that the Italian PM discussed it with officials after returning from the United States, but did not explain what form it would take.

The timeline cited in Corriere della Sera coincides with the planned end of the massive asset purchase program of the European Central Bank, due to end in December this year. The program has provided a major boon to government bonds across the eurozone by lowering interests.

However, political instability in the country and Italy’s wavering commitment to the European Union have led to Italian borrowing costs rising to levels not seen in four years, CNBC informs. But, according to Italy’s leading national daily, President Trump has offered to help finance Italy’s 2019 public borrowing, when the Rome treasury is scheduled to issue about 400 billion euros ($462 billion) worth of debt.

The paper adds that Rome, which is trying to replace private investors fleeing Italian bonds, is unsure what mechanisms the Trump administration would use to guarantee the debt. As to why the United States would want to act as an anchor buyer of Italian bonds, some suggest Trump may be trying to sow discord within the European Union.

“Trump could not have made it more that he supports the cause of those in Italy who want to leave the euro,” said Christopher Wood, analyst of the financial letter “Greed and Fear.”

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