In the face of the Green New Deal: with Pepp the ECB has purchased with the shovel bond of companies operating on fossil fuels


That of the rhetoric it is a very powerful weapon, which the political debate cannot do without. But who often and willingly hides a nature from double edged weapon. Which, based on a particular variation of Murphy’s law, always shows up in the worst moments: that is, when the underlying inconsistency of your statements tends to end automatically under an amplified power spotlight.

When they still breathed in the air hosanna for the expansion of the Pepp by the ECB, three of the top representatives of the European authorities such as the Prime Minister, Charles Michel, the Commissioner for Economic Affairs, Paolo Gentiloni and the president of the European Parliament, David Sassoli, never missed a chance for reaffirm the commitment green from Brussels, making use of the stage offered by World environment day.

The thought was unanimous: even more after the pandemic, Europe’s mission must be that of environmental sustainability as the compass of every cybernetic action. Also and above all in the recovery plans after the lockdown just presented, both at the level of the Recovery Fund and of Mes and of the monetary intervention of the ECB. Rhetoric, in fact.

More than anything else because to remember how between the saying and the doing is involved the proverbial sea of ​​realism has thought of none other than Greenpeance, whose financial analysis division went to comb through the data published on 2 June by the European Central Bank respect to first two months of purchases within the Pepp program. By breaking them down and disaggregating them, the team of experts found that the ECB itself carried in a jubilation procession like the statue of San Gennaro after the allocation of another 600 million firewall, since mid-March, it purchased corporate debt directly attributable to companies operating on fossil fuels for over 7.6 billion euros. Among the names that benefited from bond purchases within the PSPP sector program, they stand out Total and Eni as regards the Oil & Gas sector, subject to total purchases of 3.2 billion, while in the utilities field – whose bonds were bought for a value of approximately 4.4 billion euro – names like Engle and Eon, defined by Greenpeace in its note as prominent polluters. Or, first level polluters.

And just to offer its research an even higher and more academic profile, the environmental association cites aanalysis of the London School of Economics which shows how, compared to a utilities sector which accounts for only 5% of the corporate bond market denominated in euros, the companies that belong to it have weighed on 25% of all ECB purchases in the last two months of pandemic Qe. Clear the invitation of one of Greenpeace’s managers for the climate emergency and energy policies, Adam Pawloff:

The ECB and the other central banks must change their method of intervention, ceasing to finance those who aggravate the climate emergency with their actions and their business. Eurotower must exclude assets related to fossil fuels and other intensive emissions from its future purchases. ”

The problem, however, appears to be serious, even in the face of the cry of pain from glaciers and forests: if the ECB intervened with that amount of capital in a sector that is so insignificant percentage of the total of the European corporate bond universe, how high was the risk of a disproportionate increase in market financing costs for those companies? A lot, even net of oil valuations always at historic lows and the blockade of world productivity due to the pandemic. In short, cutting the reasoning with the hatchet, the ECB probably had to choose whether to save a few bears or a few hundred jobs, then families to support. The problem is mostly perspective: indeed the promises of Michel, Sassoli and Gentiloni will find practical application or will the reality of a world in full macro and financial imbalance continue to peep between a good purpose and a rhetorical access? The Green New Deal presented with all the honors by Ursula Von der Leyen as the cornerstone of his presidency of the Commission, he will therefore end up as that of Alexandria Ocasio-Cortez in the USA, that is already beautifully archived and replaced by the less panacea green but almost thaumaturgical of the Fed? The conditions are all there, alas.

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