WHEN: Today, Tuesday, June 9th
WHERE: CNBC's "Squawk Box"
Following is the unofficial transcript of a CNBC EXCLUSIVE interview with Italian Finance Minister Pier Carlo Padoan on CNBC's "Squawk Box" today. Following is a link to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000386976.
All references must be sourced to CNBC.
MICHELLE CARUSO-CABRERA: WE'RE HERE WITH THE ITALIAN FINANCE MINISTER PIER CARLO PADOAN JOINING US ON THE FLOOR OF THE NEW YORK STOCK EXCHANGE FOR AN EXCLUSIVE INTERVIEW. GOOD TO HAVE YOU HERE.
PIER CARLO PADOAN: GREAT TO BE HERE.
CARUSO-CABRERA: YOU ARE HERE TO TALK TO INVESTORS ABOUT ITALY. I ASSUME A LOT OF THEM ARE ASKING ABOUT GREECE. WHAT'S THE SITUATION? ARE YOU FINALLY GOING TO GET A DEAL HERE WITH GREECE?
PADOAN: I'M CONFIDENT THAT THE DEAL WILL COME SOON. TECHNICAL TALKS CONTINUE AND THE POLITICAL WILL TO FIND AN AGREEMENT IS THERE. SO, I HOPE THAT THE NEGOTIATORS WILL GET TOGETHER SOON.
CARUSO-CABRERA: A MEMBER OF THE ECB GOVERNING COUNCIL WENT AS FAR AS TO SAY YESTERDAY THAT IF GREECE LEFT THE EURO, IT WOULDN'T BE A BIG DEAL FOR THE EUROZONE. WE HAVEN'T HEARD SOMEBODY FROM THE ECB SAY SOMETHING LIKE THAT. WHAT DO YOU THINK? DO YOU AGREE WITH THAT?
PADOAN: CERTAINLY IF THERE IS AN ACCIDENT, THERE MIGHT BE SOME SHOCK WAVES IN THE SYSTEM, BUT THE SYSTEM IS VERY STRONG. IT'S MUCH STRONGER THAN WHEN IT ALL STARTED IN 2010 AND 2012. NOW WE HAVE A BANKING UNION. WE HAVE STRONGER INSTITUTIONS. WE HAVE MORE RESOURCES AND ABOVE ALL, ALL THE COUNTRIES, INCLUDING THE SO-CALLED PERIPHERY COUNTRIES, ARE MUCH STRONGER BECAUSE THE SITUATION IS MUCH BETTER IN TERMS OF GROWTH AND FINANCIAL VULNERABILITIES ARE GONE.
CARUSO-CABRERA: STILL, IS IT POSSIBLE THAT GREECE COULD LEAVE THE EUROZONE?
PADOAN: WELL, CERTAINLY IT'S A DIFFICULT DISCUSSION. AND THERE'S MANY THAT THINK THAT THIS SHOULD BE AN ALTERNATIVE. I DON'T THINK THIS WOULD BE A GOOD IDEA FOR GREECE IN THE FIRST PLACE.
CARUSO-CABRERA: OKAY. WHY NOT?
PADOAN: WELL, BECAUSE ONE HAS TO WEIGH IN, NOT JUST THE APPARENT BENEFITS THAT WOULD MOSTLY COME THROUGH A BIG DEVALUATION OF THE NEW DRACHMA, MAYBE, BUT BECAUSE OF THE COST. WHICH WOULD HAVE TO DO ESPECIALLY WITH THE FACT THAT THE DEBT DENOMINATED IN EUROS REMAINS AND THAT WILL PUT AN ADDITIONAL BURDEN ON GREECE TO REPAY THAT DEBT WHICH WILL NOT GO AWAY.
CARUSO-CABRERA: MORE THAN ONE FINANCE – MORE THAN ONE HEDGE FUND MANAGER HAS TOLD ME THAT BEHIND CLOSED DOORS, THEY HAVE SAID TO GREEK FINANCE MINISTER VAROUFAKIS, "WHAT IF THE CREDITORS TELL YOU NO ON ALL YOUR DEMANDS?" AND HE SAID "I HAVE LEVERAGE, IT'S CALLED ITALY." HE WENT ON TO SUGGEST THAT IF GREECE WERE TO LEAVE THE EUROZONE, ITALY WOULD BE VULNERABLE TO LEAVING THE EUROZONE AS WELL.
PADOAN: I HAVE A VERY GOOD RELATIONSHIP WITH YANIS VAROUFAKIS. WE'VE MET SEVERAL TIMES. THIS IS NOT THE FIRST TIME THAT HE SAID SOMETHING WHICH I TOTALLY DISAGREE WITH. ITALY HAS COMPLETELY TURNED AROUND. IT'S NOW GROWING. IT'S A COUNTRY THAT'S IMPLEMENTING MORE THAN ANY OTHER STRUCTURAL REFORMS. IT'S BECOMING FROM BEING A PROBLEM FOR EUROPE, AN EXAMPLE FOR EUROPE AND I'M NOT SAYING THIS AS THE INTERNATIONAL ORGANIZATIONS – THE IMF, THE COMMISSION ARE SAYING THAT ITALY IS AN EXAMPLE. AND IT'S BECOMING STRONGER BY THE QUARTER. SO I'M AFRAID THAT THIS TIME MY GOOD FRIEND YANIS VAROUFAKIS GOT IT COMPLETELY WRONG.
CARUSO-CABRERA: IF I COULD SWITCH TOPICS. INTEREST RATES IN EUROPE STILL AT LOW LEVELS, BUT HAVE RISEN VERY SHARPLY AND VERY RAPIDLY OVER THE LAST MONTH OR SO. WHY?
PADOAN: WELL, THERE ARE MANY WAYS TO INTERPRET THIS. I HAVE MY PREFERRED MORE OPTIMISTIC VIEW THAT MAYBE WE ARE GOING BACK TO MORE NORMAL TIMES. REMEMBER WHEN INTEREST RATES WERE CLOSE TO ZERO? NOW WE'RE MOVING AWAY FROM THAT. AND THIS IS IN THE LONGER TERM GOOD FOR THE EUROPEAN ECONOMY, FOR THE GLOBAL ECONOMY. THERE'S MORE ROOM FOR MANEUVER. MORE PROFIT OPPORTUNITIES FOR LONG-TERM INVESTORS. AND WE CAN LIVE WITH HIGHER INTEREST RATES WITH NO PROBLEM FOR SUSTAINABILITY. I'M TALKING ABOUT MY COUNTRY.
CARUSO-CABRERA: YOU ARE NOT CONCERNED ABOUT THE RAPIDNESS OF THE MOVE AND THE POTENTIAL FOR IT CAUSING INSTABILITY? BECAUSE THE TRADE WAS SO ONE DIRECTIONAL FOR SO LONG.
PADOAN: WE HAVE SEEN VOLATILITY AS WE ALL KNOW. VOLATILITY IS LIKE, YOU KNOW, A BUMP IN THE ROAD WHEN YOU'RE DRIVING A FAST CAR. BUT ALSO I WOULD LIKE TO POINT OUT THE FACT THAT LIQUIDITY IS ABUNDANT. AND AS FAR AS IT'S CONCERNED, THE ECB HAS INTRODUCED A QE WHICH IS A LONG TIME HORIZON WHICH THE ECB WILL STICK TO THAT. AND THIS WILL STABILIZE EXPECTATIONS. SO I'M NOT WORRIED ABOUT SHORT-TERM VOLATILITY.
CARUSO-CABRERA: YOU SAY LIQUIDITY IS ABUNDANT. BUT THERE IS ALMOST NOW COMPLETE CONSENSUS HERE IN THE UNITED STATES THAT WHEN IT COMES TO BOND TRADING, THERE'S NOT ENOUGH LIQUIDITY. NO LIQUIDITY. THAT THERE'S GOING TO BE MOMENTS WHERE THERE'S GOING TO BE INCREDIBLE GAPPING IN PRICES BECAUSE OF LACK OF MARKET MAKING, A NUMBER OF REASONS. ARE YOU CONCERNED ABOUT LACK OF LIQUIDITY?
PADOAN: NO. I SEE THIS AS A REALLOCATION OF FUNDS IN OTHER CLASSES OF ASSETS. SO AS I SAID, MAYBE BONDS WILL SUFFER A LITTLE BIT, BUT OTHER SEGMENTS OF THE MARKETS WILL BENEFIT. SO THIS IS PART OF THE READJUSTMENT. WE SHOULD HAVE MORE MONEY GOING TOWARDS EQUITIES AND SO FORTH. SO THAT IS NOT BAD NEWS.
CARUSO-CABRERA: MINISTER PADOAN, THANK YOU SO MUCH FOR JOINING US. WE REALLY APPRECIATE IT.
PADOAN: THANK YOU VERY MUCH.
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