Palazzo Chigi.
The reactions of the large landowners from various regions were delivered into Umberto’s hands; although the core contents of their regional gatherings had not been uncovered, he already had a clear idea of what was happening.
“No wonder very few people responded to the Ministry of Agriculture’s invitation; they’re even thinking of resisting.” “As it happens, I was also hoping to reclaim the land for free.” The joint buyout plan issued by the Ministry of Agriculture, the Ministry of Finance, and the Ministry of the Treasurywas estimated to cost 150 billion lire, which was roughly equivalent to ten years of fiscal revenue.
This was an astronomical expenditure.
No matter how wealthy Umberto was, he could not afford to pay it all at once.
The cold numbers were dizzying, and as a result, a bold idea suddenly popped into his head.
“How about just taking it from them directly!!!” “Your Highness, aside from the astronomical expenditure, there is an even more serious problem.” Marco Rinaldi pulled a wry face and confirmed once more, “With the national currency depreciating and government credit on the verge of collapse, will the landowners really accept the bonds?” Italy’s debt was already so high, and adding another 100-plus billion lire in national debt would inevitably cause the exchange rate to plummet, sending interest payments on both foreign and domestic debt soaring.
The national bonds would not be far from worthless paper.
Umberto shrugged, “Whether they accept them or not, this is the only way, because the country doesn’t have that much money.
With the currency depreciating, land cannot preserve its value either; we can only say that the bonds will ensure the stability of their assets.
If the land reform is effective and society stabilizes, the currency will return to its original level.” “Of course, from their perspective, they won’t think that far ahead, and their resistance will be very strong.” “Furthermore, Minister Schanzel went to Britain and France and failed to obtain any loans.
The United States refused to negotiate, blocking all opportunities for talks.
Therefore, next, I will arrange international loans myself to stabilize the exchange rate and boost confidence.” Italy was considered a potential defaulting nation that Britain, France, and the United States simply did not trust.
Its tariffs, railways, and national assets had already been mortgaged twice over.
The telegram sent back by Minister Schanzel mentioned that Britain’s attitude was extremely firm: until the old war debts were paid off, no new loans would be granted, and even further debt reductions were off the table.
Hearing that Minister Schanzel had hit a wall in London, the United States directly refused to receive him, closing the door to negotiations.
France and Italy had geopolitical conflicts, so it was even less likely to lend a large sum of money to help Italy recover its vitality.
Those three countries were the only ones capable of lending such large sums of money; other nations were in a similar plight to Italy.
Private financial consortiums charged interest rates that were too high and required the royal family’s assets as collateral, which was clearly impossible, while the amounts they were willing to lend could not meet Italy’s reform needs.
Minister of Foreign Affairs Schanzel traveled around lobbying everywhere, but ultimately gained nothing.
At this moment, Umberto could only rely on his accumulated capital to provide the first loans, allowing Britain, France, and the United States to see hope and perhaps release a portion of their own loans afterward.
Thus, Umberto summoned Guido Grillo, president of Starlight Bank in New Rome City, and Leone Laterzi, manager of the Italy branch of Starlight Capital, to Palazzo Chigi to arrange the loan matters.
Starlight Capital was a company Umberto had registered in Switzerland when he was six years old, which was used to purchase land, resources, technology, and other assets from various countries.
The name he had chosen back then was rather cringe-worthy, but later he was too lazy to change it and simply continued using it.
“Grillo, this loan will be led by Starlight Bank, cooperating with various banks in Switzerland to provide the funds.
The loan will be backed behind the scenes by the Swiss headquarters of Starlight Capital, but the public-facing loan process must be handled properly to avoid arousing suspicion.” “The joint loan limit will be 500 million pounds, but it will not be provided in full at once.
A framework agreement will be signed with the Ministry of Finance for a credit line of 500 million pounds, divided into three installments.
The first installment of 200 million pounds will be deposited into the Ministry of Finance’s account before the new year as startup capital for the reforms.” Depositing the first loan into Italy would attract the attention of other countries, and the subsequent loans would not necessarily need to be borne by the Swiss side alone.
“Understood, Your Highness.
However, please have the Minister of the Treasury visit Starlight Bank first to facilitate the initiation of the project.” Grillo was an executor and knew what to do.
“I will arrange it.
The two of you act separately and mobilize the resources of Switzerland and Italy.” Umberto had plenty of assets in his hands; he could secure a loan simply by moving things around slightly.
Of course, state and private funds had to be strictly separated to guarantee fiscal independence; otherwise, the Ministry of Finance of Italy would sooner or later become Umberto’s private vault.
After seeing the two off, Umberto called the waiting Minister of Finance Giulio Valcali and Minister of the Treasury Marco Rinaldi into his office.
“You two, prepare the loan materials and go to Starlight Private Bank to discuss the loan.” The organizational system built by Umberto over the past decade or so was enormous and complex; no one knew the relationships behind it, and the two men before him were no exception.
“Your Highness, does Starlight Bank really have this kind of strength?” Rinaldi was a specialist in finance and economics and knew a little about Starlight Bank, but he did not know its exact scale.
Internationally, Starlight Capital had little fame, so its capital reserves presumably weren’t very large.
“Starlight Bank has its channels.
Go ahead and negotiate, bring everything that can be mortgaged, and you can agree to the conditions they propose.” Umberto could not explain it explicitly and simply told them to follow his instructions.
“Your Highness, our state-owned enterprises and tax revenues have already been mortgaged twice over.
Will Starlight Bank really accept them?” Valcali remained skeptical.
“When have I ever lied to you?
Go and prepare according to what I said and head over as soon as possible.” Umberto hurried them away, not wanting to say too much lest the two continue asking questions.
The two were chased out of the office by Umberto, exchanged smiles, and parted ways to prepare the materials.
The mortgage documents were readily available and quite abundant, greatly saving the two men time.
Of course, the credit for this had to go to the previous government.
Two days later, the two rushed to the headquarters of Starlight Bank in Rome and were warmly received.
President Guido Grillo exchanged a few pleasantries before getting straight to the point, “I have heard about the purpose of your visit.
I am an Italian, and when the country is in difficulty, it is my unshirkable duty to help.” “That’s wonderful!” Rinaldi beamed, letting out a long sigh of relief.
They had already negotiated with other banks in Italy over and over again, yet no one was willing to lend them money.
The Bank of Italy was Italy’s central bank, yet even it refused to provide large loans.
Private banks were private banks after all, and naturally they were unwilling to bear such enormous risks.
“President Grillo, we have brought the assets to be mortgaged; you can arrange for someone to verify them,” Valcali said hastily, fearing that Grillo would go back on his word.
It was true that the Crown Prince was resourceful, but there was no guarantee that others wouldn’t have ideas of their own.
“Very well, Ministers.
I will arrange for people to check them.
I wonder how much money the government intends to borrow?” Grillo asked deliberately, unable to reveal the plan in advance.
“The government intends to borrow at least 50 billion lire, with two-thirds used to support the reforms and one-third used to pay interest and provide funds for purchasing land.” Rinaldi carefully stated the loan amount.
Fifty billion lire was not a small sum, and ordinary banks could not bear such pressure.
“Minister Rinaldi, 50 billion lire is too much; Starlight Bank cannot provide it alone.
To put it bluntly, no international bank would dare to single-handedly take on such a large and risky loan.” Grillo was telling the truth.
However, seeing the slight changes in the two men’s expressions, he knew that the pace of the negotiation was just right.
“President Grillo, do you have any suggestions?” Valcali frowned, refusing to believe that the financial connections arranged by His Highness would be useless.
Grillo nodded, “I do have a proposal, but I don’t know whether the two of you can accept it.” Valcali said, “Please go ahead.” Grillo repeated Umberto’s proposal, “I will do my best to coordinate an international syndicated loan, with interest rates set according to international standards.
Moreover, the loan cannot be paid in a single lump sum; we will only sign a credit framework and release the funds in multiple installments.” Rinaldi nodded slightly, “We understand your concerns, given that the amount is too large.
We accept your proposal, so please arrange the procedures as soon as possible.” “Very well, there will definitely be a reply within half a month.” Grillo gave them a generous timeframe.