Tag Archives: EU

Can Salvini Beat the Italian Troika? by Tom Luongo

What happens in Italy is important because the country has a lot of debt and a tottering banking system. From Tom Luongo at strategic-culture.org:

Italian leader Matteo Salvini is in the headlines again, now openly threatening divorce with his coalition partner, Five Star Movement (M5S).

Salvini unleashed another round of rhetorical bombs at M5S to get on them board with his part of the agenda. But that seems to have failed and he is now prepared to go to Parliament and withdraw his party, Lega, from the coalition government which will lead to new elections.

He had put off any kind of talk of new elections in the past because the opinion polling wasn’t strong enough to grant Lega the kind of majority it needed to govern without strings.

The coalition is dead but it may not matter.

The biggest problem Salvini faced, however, wasn’t M5S’s internal strife and contradictions. His biggest obstacle lies in the Troika of Technocrats that hold all the real power in Italy as it pertains to the European Union.

That Troika is President Sergei Mattarella, Prime Minister Giuseppe Conte and Finance Minister Giovanni Tria and they are the problem, as I wrote back in June.

Prime Minister Giuseppe Conti and Economy Minister Giovanni Tria are in open revolt against the coalition leaders over the upcoming budget fight with the EU.

Reuters is reporting this morning that these two are working together to undermine the internal reforms Salvini is proposing to spur economic growth from the ground up by instituting a flat tax and spending a whopping $3 billion more than Brussels wants them to on rebuilding crumbling Italian infrastructure.

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Eight Reasons the EU Will Suffer Far More Than UK in Brexit, by Mike “Mish” Shedlock

The general consensus that Brexit will hurt the UK far more than the EU may be dead wrong. From Mike “Mish” Shedlock at moneymaven.io:

The EU would be wise to make a deal with the UK. It will get clobbered in the event of no deal.

Conventional wisdom says the UK will get hit harder than the EU in the event of a no deal Brexit. Conventional wisdom is wrong.

Here are eight reasons the EU will suffer more in both the short and long term.

Reason 1: Corporate Taxes

The UK can and likely will slash corporate tax rates. A lower corporate tax rate will mitigate much of the profit damage suffered by UK corporations in the event of no deal.

Note that one of the EU’s biggest complaints against Ireland now is the “unfair” corporate tax structure of Ireland.

Reason 2: Currency Fluctuations

A falling currency is good for exporters and bad for importers. The British Pound has been falling in anticipation of Brexit.

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Casting off the EU millstone, by Alasdair Macleod

Brexit will be challenging, but it’s not going to be the disaster for Britain that it’s sometimes portrayed, and Britain has much to gain from it. From Alasdair Macleod at goldmoney.com:

In this article, we look at the implications of the new Johnson government: its strategy, the likely outcome of EU negotiations, and the golden opportunities to reform trade, tax and monetary policies to secure a better future based on free trade.

Introduction

It should have been no surprise that Boris Johnson is now Prime Minister. It should also be no surprise he will implement Brexit on 31 October, the last date agreed between Mrs May’s government and the EU. Johnson was elected by Conservative constituency members to do just that. His cabinet appointees are fully supportive, including ex-Remainers (that’s politics!) and he has appointed an aggressive rottweiler, Dominic Cummings, as his Brexit enforcer. Already, his influence over Brexit strategy can be detected. There are no compromises to be had, a point which slower minds in the commentariat find difficult to comprehend and accept.

It is likely there will be an agreement on the way forward after Brexit, which could involve a transition period, but nothing like that agreed with Mrs May. If, as seems unlikely, the EU digs its heels in, the UK will walk away. That is the message being given by the new administration.

The establishment media are still wrong-footed on Brexit. The BBC, and others, have been too idle to analyse properly, taking their information from biased pro-remain sources and politicians who are out of the loop. They are still doing it. Disinformation is substituted for truth.

The EU, disinformed by Remainers including a chorus of past ministers and prime ministers, has relied on the divisions within Parliament to put Britain into a political and economic stasis. Their repeated utterances (there will be no new negotiation, the withdrawal agreement stands etc.) reflect the continuation of the EU’s established position. That is likely to change, because the EU will find it is forced to accept the dangers to its own position.

There is a crucial difference between the new cabinet and its predecessor. In Johnson, as well as ministers such as Rees-Mogg, Raab, Javid and Gove there appears to be an understanding of and commitment to free markets, unlike anything we have seen since Margaret Thatcher. Obviously, the strength of that commitment is yet to be tested.

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Deal or No-Deal, Brexit Dooms the Euro, by Tom Luongo

The EU doesn’t have a strong hand in Brexit negotiations. From Tom Luongo at tomluongo.me:

Deal or No-Deal, when it comes to Brexit, the euro is toast. Markets, however, believe the fantasy of its survival. As we approach the end of July the euro clings to support at $1.11, mere pips away from a technical breakdown.

That breakdown will trigger a wave of asset liquidation and another round of negative headlines emanating from troubled German banks.

With 10 Downing St. now saying No-Deal is acceptable, the hard line negotiating tactics of the European Union have hit a rocky shore.

Because it looks like Boris Johnson is ready to give as good as he gets.

I’ve been saying this for a long time. The EU is not a tough nut to crack. They have no leverage in these Brexit negotiations.

What they had was a stacked deck of British officials negotiating with Brussels on Brussels’ terms.

It’s not a negotiation if both sides agree on terms. It’s a surrender.

The only negotiation that went on during May’s administration was with the British people on accepting the horrific treaty written by German Chancellor Angela Merkel’s staff and rubber-stamped by May.

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EU About to Face 2 Realities: Johnson Will Deliver Brexit, Eurozone in Recession, by Mike “Mish” Shedlock

Things are about to get interesting across the pond. From Mike “Mish” Shedlock at moneymaven.io:

Hello EU. Meet Boris Johnson and his negotiating team. While doing so, think about recession.

Vote Leave Reality

Johnson Will Deliver Brexit

Eurointelligence has finally come around to my long-held four-point stance.

  1. Boris Johnson is not bluffing.
  2. He will deliver Brexit.
  3. The EU would be wise to make a deal.
  4. Germany and the Eurozone will be in a world of hurt if they don’t.

From Eurointelligence

Forget the cabinet reshuffle. The one single appointment we take very seriously is that of Dominic Cummings. The head of the Vote Leave campaign has been given the position of special adviser to the PM, with responsibility for Brexit and the civil service. He is essentially the CEO of Number 10, Downing Street.

Cummings has been immortalised by the Cumberbatch movie The Uncivil War, in which he was portrayed as the mastermind behind the Vote Leave victory. We rate him as probably the smartest political operator in the UK right now, somebody who often works outside the policy consensus. He was the first campaign manager to use modern Big Data methods in political polling and campaigning. His elevation underlines our expectation that Boris Johnson will do his utmost to deliver Brexit by the end of October. And that he is getting ready for an election at some point in the autumn.

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European Union: A Massive Expansion of Top-down Powers by Soeren Kern

The new president of the European Union, Ursula von der Leyen, is zealously committed to further expansion of the EU’s power, not withstanding the widespread revulsion at such expansion. From Soeren Kern at gatestoneinstitute.org:

  • An examination of von der Leyen’s main policy proposals reveals that she is calling for a massive expansion of top-down powers of the European Commission. Her proposals would substantially increase the role of Brussels in virtually all aspects of economic and social life in Europe — all at the expense of national sovereignty.
  • Von der Leyen warned that Brussels would overrule EU member states opposed to her tax overhaul… She called for a comprehensive “European Rule of Law Mechanism” to ensure the primacy of EU law over the national laws of EU member states. She warned that there would be financial consequences for member states that refuse to comply…. She called for a change in rules so that the EU could act even without the unanimous consent of EU member states.
  • “What you’ve seen from Ursula von der Leyen today is an attempt by the EU to take control of every single aspect of our lives. She wants to build a centralized, undemocratic, updated form of Communism that will render [obsolete] nation state parliaments, where the state controls everything, where nation state parliaments will cease to have any relevance at all.” — Nigel Farage, European Parliament, July 16, 2019.
Former German Defense Minister Ursula von der Leyen, who has been narrowly confirmed as the next President of the European Commission, promises an ambitious left-leaning policy program on climate change, taxes, migration and the rule of law. (Photo by Sean Gallup/Getty Images)

Former German Defense Minister Ursula von der Leyen has been narrowly confirmed as the next President of the European Commission, the powerful administrative arm of the European Union.

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The New EU is Even More Insane than the Old EU, by Tom Luongo

Meet the new boss, even worse than the old boss. From Tom Luongo at tomluongo.me:

The new leadership team of the EU is insane. They learned nothing from May’s vote which saw the middle ground occupied by Angela Merkel lose ground.

Euroskeptics doubled their representation while nationalist Greens gained ground as well. The European People’s Party lost significant clout and was forced into unprecedented haggling over the leadership bloc.

Merkel, now having no political future to protect, as her last act of betrayal to Germany engineered the ‘election’ of Ursula von der Leyen to replace Jean-Claude “When things get tough you have to lie” Juncker as European Commission President.

Von der Leyen is more of a euro-integrationist than Juncker was. It’s clear they circled the wagons knowing that, as Nigel Farage points out in this clip, the EU will look nothing like it does now in five years when her term is up.

Just like the EU today looks nothing like it did in 2014 when Juncker took over.

So, it’s time to go for broke and push for everything before it all falls apart. But the trends are clear. von der Leyen is the past and Nigel Farage is the future of Europe.

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