The derivatives of Italy

This paper analyses government’s funding programs taking into account both debt and derivatives. The focus on Italian case allows to show how the use of derivatives can influence the referential variables set by Maastricht Treaty. This is why the contract terms and conditions of Italy’s use of derivatives could deny the rationale of European monetary union an d the transparency of the internal market regulation. In particular, OTC derivatives set up a bilateral layout of the relationship between State and financial intermediaries, instead of a multilateral one (as in character of financial markets). Therefore, this relation ship is still exposed to the counterparty risk that is reduced by the recent European process of market regulation. In conclusion, the analysis of the legal framework do es not dispel the doubt that an abuse of derivatives can, on the one hand, move forward (to next generations) the financial burden of sovereign debt and, on the other hand, falsify the accounting and the financial organization of the State. On the contrary, it is clear that the lack of transparency is not in line with public ethics and does not satisfy the need of democratic control of public finance.