Remember how painful the Greek debt was, and how hard it was to resolve. Italy’s unfolding debt crisis will be many times larger and more difficult to resolve. From Don Quijones at wolfstreet.com:
A serious showdown is brewing in the Eurozone as Italy’s anti-establishment coalition government takes on the EU establishment in a struggle that could have major ramifications for Europe’s monetary union. The cause of the discord is the Italian government’s plan to expand Italy’s budget for 2019, in contravention of previous budget agreements with Brussels.
The government has set a public deficit target for next year of 2.4% of GDP, three times higher than the previous government’s pledge. It’s a big ask for a country that already boasts a debt-to-GDP ratio of 131%, the second highest in Europe behind Greece. To justify its ambitious “anti-poverty” spending plans, proposed tax cuts, and pension reforms, the government claims that Italy’s economic growth will outperform EU forecasts.
It’s hard to see how the EU won’t fracture if the true hand on the wheel, Angela Merkel, was to lose her position as Chancellor of Germany. From Tom Luongo at tomluongo.me:
The pieces have been moving into place for months now. German Chancellor Angela Merkel has seen her power within German political circles wane for more than a year. Italy’s opposition to the European Union’s budget rules is stiffening.
Bond yields are beginning to not just rise, but blow out uncontrollably.
The Fed keeps raising rates to arrest inflation not supported by increased wages.
Brexit talks are at a standstill.
Last week Merkel suffered what could easily be her most important political defeat over the past two years. She lost a parliamentary vote for her candidate in an internal vote of her Christian Democratic Union (CDU) party.
Brussels sets up a ‘special purpose vehicle’ to bypass the US dollar and allow financial transactions with Tehran to continue
History may one day rule this was the fateful geopolitical moment when the European Union clinched its PhD on foreign policy.
Last week, EU foreign policy head Federica Mogherini and Iranian Foreign Minister Mohammad Javad Zarif, announced at the UN a “special purpose vehicle” (SPV) to deal with the Trump administration’s sanctions on Iran after the US unilaterally pulled out of the JCPOA, also known as the Iran nuclear deal.
Mogherini crucially emphasized, “in practical terms, this will mean that EU member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world.”
The EU is doing its best to stifle the internet, ostensibly to protect copyrights, but actually to limit free expression. From Neil Clark at rt.com:
It’s basically a battle between billionaires Axel Springer SE and Google. But it is ordinary internet users who will fall victim to the EU’s new copyright law, which urgently needs modification.
It’s good to share. But the European Parliament clearly doesn’t think so. Its new copyright legislation, passed last week, clamps down quite severely on sharing things online. The dynamism of the internet is at threat. When Tim Berners-Lee, the creator of the World Wide Web, warns us of the dangers the new law poses, we should all sit up straight and pay attention.
For a start, the legislation shifts the responsibility for the uploading of copyright material to the internet platforms themselves. Beforehand it was the job of the companies who thought their copyright was infringed to do this. Many don’t bother, and are happy to see their material uploaded to sites like YouTube as they know it promotes an artist’s work and boosts sales. But all that is likely to change.
Hungarian president Viktor Orban is raising a ruckus in Europe. From Diana Johnstone at unz.com:
CNN recently discovered a paradox. How was it possible, they asked, that in 1989, Viktor Orban, at the time a Western-acclaimed liberal opposition leader, was calling for Soviet troops to leave Hungary, and now that he is Prime Minister, he is cozying up to Vladimir Putin?
For the same reason, dummy.
Orban wanted his country to be independent then, and he wants it to be independent now.
In 1989, Hungary was a satellite of the Soviet Union. Whatever Hungarians wanted, they had to follow directives from Moscow and adhere to Soviet communist ideology.
Today, Hungary is ordered to follow directives from Brussels and adhere to the EU ideology, a k a “our common values”.
Some former Warsaw Pact countries aren’t buying the EU party line. From John Laughland at ronpaulinstitute.org:
The “salon des refusés” of political dissidents in the EU is getting bigger by the day. Less than a week after his government was condemned in a vote in the European parliament, Orban is in Moscow for talks about energy with Putin. His visit to Russia is the political equivalent of giving the EU the finger following last week’s humiliation.
Orban is not alone. In his battle with the EU over immigration and the rule of law, he is supported by Poland and the Czech Republic. Poland, which is also facing an Article 7 procedure against it by the European Commission, has vowed to protect Hungary, just as Hungary has vowed to protect Poland. So there is no way that the voting rights of either country can be removed, since the ultimate vote to do so requires unanimity. Orban also recently received the support of Czech Prime Minister Andrej Babis and of the Italian Minister of the Interior, Matteo Salvini.
The EU continues it’s slippery slide down the road to censorship. From Joseph Jankowski at planetfreewill.com:
The European Union is in the final stages of crafting legislation that will force big tech and internet companies to censor “extremist” content and cooperate with law enforcement, Reuters reports.
The bill is expected to be released by the end of the month and will absolutely require companies such as Google, Facebook, and Twitter to swiftly remove any content considered terroristic from their platforms.
In March, the European Commission told such companies that they had three months to show they were removing “extremist” content more rapidly or face legislation forcing them to do so.
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