Source: The Economist: Charlemagne
The host of the EU’s 60th anniversary party is the country most likely to bring it down
THE European Union may be a Franco-German construction, but when the project needs a dose of grandiosity it invariably turns to Italy. This weekend the leaders of 27 EU countries (all bar Britain) will convene in Rome’s glorious Palazzo dei Conservatori, beneath 17th-century frescoes and flanked by sculptures of sundry popes, to proclaim their unity—60 years after their forefathers signed the Treaty of Rome, the EU’s founding document, in the same room. In today’s fractious union the symbolism counts for something, even if the declaration the leaders will issue is crushingly bland. Yet there will be a note of irony to the proceedings, for if you ask officials in Brussels or Berlin which country keeps them up at night, the answer is always the same: Italy.
Very little changes here, sighs a local who emigrated as a child and recently returned to Rome. Sadly, that includes the size of the economy. The European Commission forecasts Italian growth at 0.9% this year, the slowest in the euro zone. Since 2008 Italy has been in recession as often as not. Real income per head is lower than when Italy joined the euro in 1999, and could soon be overtaken by zippy Spain. Youth unemployment stands at 38%, and the employment rate is among the lowest in the OECD. No wonder barely half the population of this traditionally pro-European country think the euro was a good idea. Den Rest des Beitrags lesen »
No One Is Following Britain Out of the EU
By Pierpaolo Barbieri
Following France’s 1954 humiliation at the hands of the Viet Minh at Dien Bien Phu, U.S. President Dwight D. Eisenhower divined the phrase “domino effect”to suggest that the victory of communist guerrillas would lead to a cascade of parallel events elsewhere: “You have a row of dominos set up,” Eisenhower said. “You knock over the first one. … What will happen to the last one is the certainty that it will go over very quickly.” Ike’s idea caught on; the “domino” concept was applied to everything from the Cuban Revolution to the Prague Spring.
Most recently, the prospect of a domino effect was a staple of discussions of the British referendum on EU membership.In this case, a first-mover (the United Kingdom) would trigger the implosion of the EU by daring to exit first. It would be swiftly followed by others eager to free themselves from the shackles of transnational regulators and their world-leading single market. Den Rest des Beitrags lesen »
From Brexit to Trump to the rise of nationalist parties across Europe, the old division between left and right is giving way to a battle between self-styled patriots and confounded globalists
Late on a Sunday evening a little more than a year ago, Marine Le Pen took the stage in a depressed working-class town in northern France. She had just lost an election for the region’s top office, but the leader of France’s anti-immigrant, anti-euro National Front did not deliver a concession speech. Instead, Ms. Le Pen proclaimed a new ideological struggle.
“Now, the dividing line is not between left and right but globalists and patriots,” she declared, with a gigantic French flag draped behind her. Globalists, she charged, want France to be subsumed in a vast, world-encircling “magma.” She and other patriots, by contrast, were determined to retain the nation-state as the “protective space” for French citizens. Den Rest des Beitrags lesen »
Italy has a new government, and Matteo Renzi is not in charge of it. The former prime minister kept his word and resigned following his constitutional reform plan’s crushing defeat at the polls. Is all now well in that beautiful land?
Not exactly, though we did see a glimmer of hope this week. Unicredit, Italy’s largest bank, announced job cuts and asset sales that may buy it some time. This does not, however, mean the crisis is over. At best, it means the beginning of the crisis is over. We have a long way to go.
Our first OTB selection today begins, “Chronic inability to separate the probable from the desirable has been the tragedy of 2016.” Those fateful words come from Financial Times columnist Wolfgang Münchau, who is normally very calm but now sees wishful thinking about Italy as a major threat. As much as some might wish Italy to remain in the eurozone, Münchau thinks it’s increasingly improbable. Timing is the main question.
A brief sample of his analysis:
One day Italy will be led by a party in favour of withdrawal from the euro.When that happens, euro exit would turn into a self-fulfilling prophecy. There would a run on Italy’s banks and its government’s bonds.Den Rest des Beitrags lesen »
After the UK Brexit and the Trump triumph in the US, the rise of anti-establishment Italy is hardly a surprise. It is the effect of half a decade of failed austerity doctrines in Europe and decades of failed political consolidation in Italy – ever since the notorious Tangentopoli scandals.
While Italy’s constitutional referendum heralds a political earthquake that will eventually affect both France and Germany, the immediate result is more uncertainty in economy, political polarization and market volatility.
End of an era in Italy – and Europe
Only hours after Italians had casted their ballot in the referendum on constitutional reforms, Prime Minister Matteo Renzi announced his resignation after heavy defeat.
Renzi’s ‘Yes’ camp included most of his Democratic Party (DP) and centrist allies, and the tacit support of moderate voters, including some from Silvio Berlusconi’s Forward Italy (FI). In turn, the opposition lineup featured Beppe Grillo’s Five Star Movement (M5S), the regional Northern League (NL) led by Matteo Salvini in alliance with the far-right Brothers of italy’s (Fdl) and Berlusconi’s Forward Italy (FI), a significant minority of PD allies, a number of small leftist groups,
According to projections, almost 60% of voters rejected constitutional changes. “My government ends here,” said Renzi from Palazzo Chigi. Moments later, he acknowledged that his pledge to resign if defeated at the polls had been a mistake. Den Rest des Beitrags lesen »
Philippe Legrain, a former economic adviser to the president of the European Commission, is a visiting senior fellow at the London School of Economics’ European Institute and the author of European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right.
DEC 8, 2016 Project Syndicate
LONDON – Political instability in Italy is nothing new. But Italian voters’ rejection of constitutional reforms in a referendum has not only led Prime Minister Matteo Renzi to resign; it has dealt another blow to a crisis-ridden European Union. In the near term, Italy’s ongoing banking crisis could flare up again and threaten European stability; in the longer term, Italy may have to leave the eurozone, which would put the single currency itself at risk.
The “No” side was widely expected to win. But the scale of its victory – a whopping 59% of the vote – was shocking, and largely a triumph for anti-establishment forces, particularly the Five Star Movement. The movement, led by the comedian Beppe Grillo, is leading in opinion polls, supports holding a referendum on eurozone membership, and is now demanding an immediate general election. Den Rest des Beitrags lesen »
The blistering rally of Italian equities and sovereign bonds is a marvel to behold. Short-covering rallies are always the most glorious, and the most treacherous.
The market bounce after Brexit made perfect sense. Half the world immediately loosened policy to cushion an imaginary shock.
It even made more sense after the election of Donald Trump. His triple pledge of tax cuts, a building boom, and an imperial navy – if enacted – will flood the US economy with even greater fiscal stimulus than Reaganomics.
But it is hard to conjure any plausible story to justify a happy outcome from the turbulent events in Italy, at least for the holders of capital. „Nothing has changed for the better. You cannot find anything fundamentally positive about the referendum result,“said Lorenzo Codogno, former chief economist of the Italian Treasury and now at LC Macro Advisors.
„The whole world was short Italian banks, and everybody jumped to cover at the same time. That is what is this rally is about,“ he said. Den Rest des Beitrags lesen »
Mario Margiocco’s most recent book is „Il disastro americano. Riuscirà Obama a cambiare Wall Street e Washington?“ (The American Disaster: Will Obama Change Wall Street and Washington?)
NOV 27, 2016 Project Syndicate
MILAN – In the last 68 years, Italy has held 17 general elections and a few referenda. But only three times has an Italian vote claimed center stage internationally: in 1948, when the choice was between the West and communism; in 1976, when voters faced a similar choice, between the Christian Democrats and Enrico Berlinguer’s “Eurocommunism”; and now, with the upcoming referendum on constitutional reforms.
The implications of the upcoming vote are enormous. Prime Minister Matteo Renzi has staked his political future on the vote, pledging to step down (though not immediately) if the reforms are rejected. Such an outcome that would irreparably weaken the center-left government coalition as well: Renzi’s Democratic Party (PD) is already roiled by infighting over the reforms. In fact, the PD may not be able to avoid a split even if the vote goes the prime minister’s way.
A defeat for Renzi will be read as a victory for Italy’s two major populist parties: the Lega Nord and the larger Five Star Movement, led by the comedian Beppe Grillo. The two parties are not allied, but both are nurtured by anti-establishment sentiment and favor “national solutions” to Italy’s problems – beginning with a return to the Italian lira. Den Rest des Beitrags lesen »
“Fascism is a religion,” wrote Benito Mussolini, in his 1932 Doctrine of Fascism. “The twentieth century will be known in history as the century of Fascism.”
But what will the 21st century be known as? The rise of the anti-elite?
Or the century of economic decay that lead to fascism?
‚Soft Side‘ of Fascism
When Donald Trump was elected, one of his many congratulatory tweets came from Marine Le Pen, the media-savvy, populist right wing leader of France’s National Front, who sees a kindred spirit in the mogul who supposedly stands for the common man. “Congratulations to the new American president and the free American people,” wrote Le Pen, a 49-year old attorney and the daughter of the party’s founder, Jean-Marie. Den Rest des Beitrags lesen »
Eine Kommission des Regionalparlaments der Toskana schlägt hat die Monte dei Paschi untersucht. Misswirtschaft, politische Seilschaften und die Einflussnahme geheimer Kreise haben in die Katastrophe geführt. Sie könnte Folgen für ganz Europa haben.
Deutsche Wirtschafts Nachrichten: Warum haben Sie diese Untersuchungskommission ins Leben gerufen?
Giacomo Giannarelli: Wenn wir von der Monte dei Paschi di Siena sprechen, sprechen wir vom größten Finanzskandal, den es in Europa je gegeben hat – weltweit übertroffen nur noch von der Lehman-Pleite. Das hätte dazu führen müssen, dass das Abgeordnetenhaus eine Untersuchungskommission ins Leben ruft, so wie von M5S beantragt. Aber die PD, die für diese Desaster mitverantwortlich ist, hat sich quergestellt. Deswegen haben wir auf eine Regelung des toskanischen Regionalparlamentes zurückgegriffen und die Vorgänge untersucht. Zwar sind unsere Kompetenzen deutlich eingeschränkter als die des Parlaments, aber es hilft doch, uns Klarheit zu verschaffen. Das ist wichtig, denn der Skandal hat sich in der Toskana ereignet und betrifft die älteste Bank Italiens.
Zudem ist die MPS das größte regionale Unternehmen und schon deswegen wäre eine politische Untersuchung neben den wenigen juristischen erforderlich gewesen. Das haben wir durchgesetzt. Wir waren dies den tausenden Sparern, nicht nur in der Toskana, schuldig, denn diese haben bis zu 90 Prozent ihrer Ersparnisse verloren. Und auch den Bürgern unseres Landes, die sich fragen, wie sich 50 Milliarden an Werten, die einmal der öffentlichen Hand gehörten, in Luft auflösen konnten. Ganz zu schweigen von den fast 10.000 Angestellten, die, obgleich mit Abfindung, ihre Arbeit verloren haben.