ECB should cancel Italy's COVID-related debt, ruling 5-Star say

FILE PHOTO: A supporter of Italy's 5-Star Movement wears a protective mask during an anti-government protest held by Italy's 5-Star Movement in Rome, Italy, February 15, 2020. REUTERS/Remo Casilli

ROME (Reuters) - The European Central Bank should cancel Italy’s government debt it owns related to the coronavirus health emergency, Italy’s co-ruling 5-Star Movement said in a blog post on Tuesday.

“Italian debt post-COVID held by the European Central Bank amounts to around 140 billion euros (125.6 billion pounds) and will reach around 200 billion euros by the end of 2020,” the 5-Star said in the blog. “Cancelling at least the portion of debt related to COVID would not only be fair, but easily achievable.”

On Monday the ECB’s vice president Luis de Guindos said there was no legal basis for the ECB to cancel the government debt it owns.

The ECB has bought around 3 trillion euros worth of public-sector bonds over the past five years in an attempt to boost inflation in the euro zone and, more recently, keep credit cheap in the face of the coronavirus pandemic.

There was no immediate suggestion that the 5-Star call would become a policy initiative of the coalition government.

Reporting by Stefano Bernabei, writing by Agnieszka Flak; Editing by Crispian Balmer