Tag Archives: Italy

Salvini Is Positioning Italy for Confrontation, by Tom Luongo

Matteo Salvini is proving himself to be quite a match for the EU. From Tom Luongo at strategic-culture.org:

Italy’s Matteo Salvini is riding high right now. Having weathered a couple of cheap legal moves to derail his assault on the European Parliament this May, Salvini is working to galvanize Euroskepticism across the continent into a viable political force.

He’s got his work cut out for himself.

But, he has at least two major allies. Marine Le Pen of the National Rally in France and Viktor Orban, the leader of Hungary. Salvini and Le Pen met last week to announce they would be campaigning together for the European elections as well as a major summit in Milan soon.

This is only the beginning, however.

I’ve been saying for over a year now that Salvini needs to be the person who lays the foundation for a wholesale revolt against the European Union and Italy’s participation in the euro.

His Lega party have skyrocketed in the polls, reversing the dynamic between it and coalition partner Five Star Movement. It’s a coalition that is of the kind which frightens the political establishment in Europe because it isn’t formed on the traditional left-right false divide.

It is a populist one united on the common cause of overthrowing the corrupt, corporatist system which most western governments are fronts for.

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Big Old Problem Just Re-Erupted on Eurozone’s Southern Flank, by Don Quijones

Italy is in recession, has debt out the wazoo, and its banking system is in bad shape. From Don Quijones at wolfstreet.com:

Italy’s fiscal health is once again in serious decline.

On Wednesday, Italy’s coalition government slashed its growth forecast for the Italian economy in 2019 to 0.2% – the weakest forecast in the Eurozone – from a previous forecast of 1%. Italy is already in a technical recession after chalking up two straight quarters of negative GDP growth in the second half of 2018.

The government’s budget for this year was based on the assumption that the economy would expand by 1% this year. Now, it seems the economy may not grow at all; it could even shrink.

One direct result of this is that Italy’s current account deficit for 2019 will be substantially higher than the 2.04% of GDP Italy’s government pledged to stick to late last year. And that can mean only thing: another standoff between Rome and Brussels over the direction of fiscal policy is in the offing.

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Can the EU Survive the Next Financial Crisis? by Alasdair Macleod

The short answer to the question in the title is no. Alasdair Macleod explains why. From Macleod at mises.org:

Despite the ECB’s subsidy of the Eurozone’s banking system, it remains in a sleepwalking state similar to the non-financial, non-crony-capitalist zombified economy. Gone are the heady days of investment banking. There is now a legacy of derivatives and regulators’ fines. Technology has made the over-extended branch network, typical of a European retail bank, a costly white elephant. The market for emptying bank buildings in the towns and villages throughout Europe must be dire, a source of under-provisioned losses. On top of this, the ECB’s interest rate policy has led to lending margins becoming paper-thin.

A negative deposit rate of 0.4% at the ECB has led to negative wholesale (Euribor) money market rates along the yield curve to at least 12 months. This has allowed French banks, for example, to fund Italian government bond positions, stripping out 33 basis points on a “riskless” one-year bond. It’s the peak of collapsed lending margins when even the hare-brained can see the risk is greater than the reward, whatever the regulator says. The entire yield curve is considerably lower than Italian risk implies it should be, given its existing debt obligations, with 10-year Italian government bonds yielding only 2.55%. That’s less than equivalent US Treasuries, the global risk-free standard.

Government bond yields have been and remain considerably reduced through the ECB’s interest rate suppression and its bond-buying programs. The expansion of Eurozone government debt since the Lehman crisis has been about 50% to €9.69 trillion. This expansion, representing €3.1 trillion, compares with the expansion of the Eurosystem’s own balance sheet of €2.8 trillion since 2009. In other words, the expansion of Eurozone government debt has been nearly matched by the ECB’s monetary creation.

Bond prices, such as that of Italian 10-year debt yielding 2.55%, are therefore meaningless in the market sense. This has not been much of an issue so long as asset prices are rising and the global economy is expanding, because monetary inflation will keep the fiat bubble expanding. It is when a credit crisis materializes that the trouble starts. The fiat bubble develops leaks and eventually implodes.

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How to Win on Immigration: Italy’s Salvini Shows the Way, by Guillaume Durocher

To the consternation of the powers that be in the EU, Salvini is indeed “winning.” From Guilllaume Durocher at unz.com:

A grave Salvini at a press conference after a drunk-driving Moroccan killed two Italians

Really and truly, I did not expect the most promising developments in West-European politics to come from Italy. Who could predict that the strange government appointed in June 2018 – an uneasy alliance of nationalists under Matteo Salvini’s Lega and the populist-but-vague Five-Star Movement – would last as long or achieve as much as it has? Italy’s parliamentary regime is notoriously unstable, governments falling with unnerving regularity, and yet this strange hybrid has gone from strength to strength.

The globalists – notably the EU institutions and the various migrant NGOs, many supported by George Soros’ Open Societies Foundation – had adopted a criminal policy whereby the goal of their operations was not to reduce illegal immigration but to “solve” the problem by “rescuing” migrants at sea, even if they barely left the coast of North Africa, and breaking down Europe’s external and national borders.

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Default Or Exit: A Battle Between Italy And The EU Is Inevitable, by The Oriental Review

Italy’s debt problem makes Greece’s look like small change. From The Oriental Review editorial board at orientalreview.org:

There is a dual Italian crisis brewing in the European Union. On the one hand, it is a political, or even geopolitical, crisis. Italy is undermining the unity of the European Union; blocking the EU’s recognition of those behind the coup in Venezuela as the legitimate authority; preventing the expansion of sanctions against Russia; and even supporting the ‘yellow vest’ movement in France, which is arousing the anger of the French government.

On the other hand, the crisis is economic in nature. Italy is once more sliding into a recession (economic growth was negative in the country); Italian banks are again facing financial problems; and the business media has already estimated that the Italian economic crisis could blow up the entire European banking system.

There is a strong possibility that the EU’s leaders will soon be faced with a choice: try to save Italy (and the whole of Europe) from yet another crisis or set an example by punishing the Italian government for the country’s independent economic and foreign policies. In turn, Italian Prime Minister Giuseppe Conte’s government will most likely have its own dilemma to deal with: bow down and sell its principles to get help from Brussels or go all out and regain Italian independence. The choice will not be easy and either decision will be painful. Neither ending to this Italian drama could really be called happy. As this headline in The Telegraph quite rightly notes: “Crisis brewing in Italy will lead to default, exit from the euro, or both.”

Conte Salvini MaioItalian Prime Minister, Giuseppe Conte delivers his speech during the confidence vote for the new government at the Italian Senate. In the picture at left vice premier Luigi Di Maio and right vice premier Matteo Salvini, Italy, Rome, June 05, 2018

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Salvini the Kidnapper Officially Has the EU Scared, by Tom Luongo

The EU is toast. From Tom Luongo at tomluongo.me:

A court in Sicily has ruled that Interior Minister, leader of The League and all-around Euroskeptic bad-ass Matteo Salvini should stand trial for kidnapping migrants held in abeyance off Italy’s shores.

“I confess,” Salvini said in a video posted to his Facebook page, “there is no need for a trial. It’s true, I did it and I’d do it again.”

“I risk 3 to 15 years in prison for blocking illegal landings in Italy. I have no words,” wrote Salvini, the leader of the ultra-nationalist Lega (League) party, which now rules Italy in a coalition with the anti-establishment Five Star Movement (M5S).

If this wasn’t so stupid it would be hysterical, actually. But it exists and it’s an attack on Salvini that has a number of angles to it.

As Dr. Steve Turley explains in the video below one of the goals of this attack is to drive a wedge between Five Star Movement (M5S) and its coalition partner, The League.

Early returns on this look to be it will go nowhere as M5S leader Luigi DI Maio supported Salvini. But, the real issue isn’t the coalition government.

If somehow Di Maio can’t ride herd over his faction with the Italian parliament and they vote to allow this trial to go forward then M5S will continue sinking into obscurity and The League’s rising poll numbers will accelerate.

As Turley points out it is not in M5S’s best interest to betray its partner at this point. They enjoy parliamentary representation well above their current polling.

So, they would jeopardize everything they’ve worked to shape Italian domestic policy.

But that’s not the real issue here. The real issue is this is an attempt by the EU and The Davos Crowd behind them to slow down the integration of the Euroskeptic movement around Europe to challenge the current status quo in the European Parliament.

Salvini called for a “League of Leagues” after his meeting with Hungary’s Viktor Orban.

That’s why Salvini is calling for “A League of Leagues” across Europe.  He will succeed.

This is the guy who successfully rebranded the secessionist Northern League into the MIGA party – Make Italy Great Again. 

Then he and Five Star Movement leader Luigi Di Maio navigated the Italian Swamp to form a government experts said couldn’t work, while simultaneously neutering establishment stalking horse Silvio Berlusconi.
Thanks to Salvini’s strategic genius Italian politics will never be the same again.  His League now polls around 30%, which bodes well for it in next year’s European Parliamentary Elections.

Because now his sights are MEGA – Make Europe Great Again.

In fact, this frivolous lawsuit is prima facia evidence that the EU oligarchs in Brussels are officially scared of what’s coming in May’s European Parliamentary elections.

If Salvini wasn’t a threat they wouldn’t be going after him this way.

If you bind Salvini down with having to whip up support in Italy he’s not spending that time convincing the leaders of Alternative for Germany (AfD) or Marine Le Pen’s National Rally to coalesce into a unified opposition against the hardcore leftist European integrationists.

Populist Euroskeptic movements are still rising all across Europe. And the EU needs to get past this election to ensure that the real power in Brussels remains in the hands of The Davos Crowd. This has become an existential threat to the European project.

It has to stay on course despite the will of the people of Europe.

It’s an act of pure desperation. It’s no different than how they are handling Brexit. And it’s why the EU will not cave on Brexit until the last minute, if at all. They cannot empower Salvini, Le Pen, Kurz, Orban, et.al. against them.

Caving to the U.K. on Brexit will reveal how weak they truly are.

So, Salvini and Di Maio were right to embrace the accusations rather than soft-peddle. The people are craving competent leadership and this initial show of solidarity demonstrates that.

This will have to be dealt with and it will be a real test of the political situation in Italy. If the Senate votes this down then Salvini can ignore it and, worse for Brussels, campaign harder on it.

It will also shore up his support abroad as the real prize, the European Commission Presidency comes into focus. If it fails then that will make it much harder to put together a coalition strong enough to block Jean Claude-Juncker’s expected successor.

The future of the EU actually hangs in the balance on this frivolity. That tells you just how desperate things really are for the current leadership of the rapidly disintegrating European Union.

 

 

The Tragedy Of The Euro, by Alasdair Macleod

The euro’s failure at inception wasn’t a certainty, but now it is. From Alasdair Macleod at goldmoney.com:

After two decades, the euro’s minders look set to drive the Eurozone into deep trouble. December was the last month of the ECB’s monthly purchases of government debt. A softening global economy will increase government deficits unexpectedly. The consequence will be a new cycle of sharply rising bond yields for the weakest Eurozone members, and systemically destabilising losses in the bond portfolios owned by Eurozone banks

The blame-game

It’s the twentieth anniversary of the euro’s existence, and far from being celebrated it is being blamed for many, if not all of the Eurozone’s ills.

However, the euro cannot be blamed for the monetary and policy failures of the ECB, national central banks and politicians. It is just a fiat currency, like all the others, only with a different provenance. All fiat currencies owe their function as a medium of exchange from the faith its users have in it. But unlike other currencies in their respective jurisdictions, the euro has become a talisman for monetary and economic failures in the European Union.

Recognise that, and we have a chance of understanding why the Eurozone has its troubles and why there are mounting risks of a new Eurozone systemic crisis. These troubles will not be resolved by replacing the euro with one of its founding components, or, indeed, a whole new fiat-money construct. It is here to stay, because it is not in the users’ interest to ditch it.

As is so often the case, the motivation for blaming the euro for some or all the Eurozone’s troubles is to shift responsibility from the real culprits, which are the institutions that created and manage it. This article briefly summarises the key points in the history of the euro project and notes how the mistakes of the past are being repeated without the safety-net of the ECB’s asset purchases.

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