Italian Government has €50 Billion Unpaid Bills: Proposed Payment? The Mini-BOT


Economists are discussing the merits or lack thereof of Italy's proposed Mini-BOT currency.

Lars, a reader from Norway cited a video discussion that mentioned the Italian government has €50 billion in unpaid bills.

The video, by economist Jacques Sapir is in French. He discusses Italy's proposed parallel currency, the Mini-BOT.

L'Italie vers une sortie de l'euro avec Jacques Sapir - Politique-Eco - YouTube

It's an hour long and I don't speak French so I asked Lars for a translation of key snips.

Key Points

  • Around 4 minutes; Italy has had problems since intro of euro. Italy technically in recession.
  • 5:40 Youth unemployment around 50%
  • 8:30 The Italian government does not pay suppliers. Owe around €50 billion. 3% of GDP.
  • 9:40 Sapir explains that mini BOT (Bonds Ordinaire de Tresor) will be used to pay creditors that are owed the 50 billion. Mini BOTs can also be used to pay salaries. So it becomes some kind of lira. So BOTs will circulate as if it was a parallel money (lira).
  • 19:50 ECB will not accept this backdoor lira. ECB will not continue to finance Italian banks.

This is just a proposal, or a discussion of a proposal, but the idea is gaining traction. There will be a showdown soon.

For background information and further discussion, please see Meet the Mini-BOT: Italy Will Break Up the Eurozone.

Mike "Mish" Shedlock

Comments (6)
No. 1-4

Can Mini-bots be exchanged for euro? If so, as as soon as someone is paid in mini-bot, they'll try to exchange it. And whoever is converting won't pay much because they fear they'll be left holding the bag. It will quickly become as valuable as Zimbabwe currency.


I hope that the Italian people realise that restoring their own currency is just one of the things that they need to do in order to be able to make their economy stronger. Sure, it is a necessary step, but it isnt the only step by a long chalk.


Never lend money to an Italian Prince.


Government debt circulating in the market, in any form, is de facto money. If it circulates parallel to harder currency in the same economy, it is bad money. And according to Gresham's the good money disappears from circulation and the bad devalues and hyper-inflates and lays waste to the whole economy.