Quitaly , Italy at the crossroads

**david44** · 22-11-2016, 11:15 PM

Re visiting Venice and Roma Italy last summer I rediscovered what a wonderful country it is , despite the priests, the mafas, the refigees everywhere, the beauty,style, food , lovely sights and weather still make it a great place if your cashed up.Food is mouthwatering but pricey in the cities.

However distrusting years of corrupt pollies the tax take cannot match needs, sick seniors, unemployed not building pensions, like Greece and Cyprus five years back.
Italy is at a crossroads.
The Spectator article explains the cirrent hiatus, for underlying banking crisis google Monti dei Paschi and badbanks Atalante1 Atalante2

Italy?s heading for its own Brexit moment

Though he is a big fan of the European Union, Barack Obama brings bad karma to it. So perhaps he should not have chosen Greece and Germany, the two countries which illustrate so poignantly why the euro is doomed, for his last foreign tour.

His farewell visit is, if not a kiss of death, surely a bad omen for the EU and most immediately for one of those present in Berlin to bid him goodbye: Italy’s prime minister, Matteo Renzi, who has called an all–important referendum on constitutional reform for 4 December. If he loses, as looks ever more likely, it could cause a run on Italy’s sclerotic banks that could engulf the eurozone.

Obama was certainly defying the gods last month when he gave his last state dinner at the White House — ‘a swirl of Dolce Vita diplomacy’, CNN called it — in honour of the 41-year-old Renzi. The Italian prime minister, who is the leader of Italy’s former communist party and the third unelected leader of this troubled country in five years, was praised by Obama as ‘bold’ and ‘progressive’. The outgoing President was generous enough to add: ‘I am rooting for [his] success.’ Renzi might ask David Cameron how that kind of support tends to work out.

Ten days later, a massive earthquake destroyed the Basilica of San Benedetto in Norcia, near Perugia, built on the site where St Benedict, patron saint of Europe, was born in about AD 480.

So, as Italy gets ready to vote, the omens are not looking good for Renzi, whose motormouth oratory about tough but progressive reform to drag Italy’s economy out of the mire earned him the nickname ‘Il Rottamatore’ (demolition man) — and catapulted him from being mayor of Florence to prime minister in February 2014 without so much as a general election.

Nor are the opinion polls — the modern equivalents of haruspicy (as practised on animal entrails in Ancient Rome) — looking much better. These show the ‘no’ vote in the referendum, which is constitutionally binding, consistently ahead by three or four points. They also show that up to a third of Italians have yet to decide. This is hardly surprising: only one in five, according to other polls, understands what the referendum is about.

And who can blame them? For here is the byzantine question they are called to answer with either a ‘sì’ or a ‘no’: ‘Do you approve the text of the Constitutional Law concerning “dispositions for the overcoming of equal bicameralism, the reduction of the number of parliamentarians, the containment of the running costs of the institutions, the suppression of the National Economic and Labour Council and the review of Title V of Part II of the Constitution” approved by Parliament and published in Gazzetta ufficiale n.88 on 15 April 2016?’

In essence, Renzi wants to curtail the powers of the upper house, the senate, and to cut the number of senators — who would no longer be elected, but appointed by regional governments — from 315 to 100. If he succeeds, his economic reforms should be easier to pass.

The two houses of parliament currently have equal power which, according to Renzi, causes huge delay, hobbles decisive law-making and causes weak government. In fact, Italy spews out more laws than the British, American, French and German governments, — many of them bad. What it needs is fewer, better laws, and a decent judicial system to enforce them, not the abysmally slow, politicised and inconclusive one it is cursed with.

The reason Italy has had 60-odd governments in the past 70 years — all coalitions — is not thanks to its senate but to its electoral and party systems, which make it impossible for one party to win a majority of the seats.

The referendum proposes many other things, including electoral reform. The idea is a version of proportional representation which awards bonus seats to any party that gets 40 per cent or more of the popular vote right away — or in a run-off between the two most popular parties. The winning party will thus be guaranteed 340 seats in the lower house, an impregnable majority.

Only twice since the war has a single party got more than 40 per cent in a general election, in 1948 and 1953.

Admittedly, Renzi’s Democratic party is ahead in polls when Italians are asked which party they would vote for in a general election, at roughly 30 per cent, but only slightly ahead of the populist Five Star Movement that was founded by the comedian and internet demagogue Beppe Grillo and whose slogan is Vaffa! (fuck off) to more or less everything, including the euro but excluding wind farms.

Grillo has dismissed the referendum question as ‘incomprensibile’. His movement and most of what remains of media tycoon Berlusconi’s party, Forza Italia, will vote ‘no’ in the referendum. So too will the right-wing populist Northern League party, which also wants Italy out of the euro and illegal immigrants out of Italy. On top of that will be a significant tranche of Renzi’s own party.

So this has become a referendum not just on constitutional reform but on Renzi — and if not on Italian membership of the EU, certainly on the euro. The Brexit vote, the triumph of Trump and the populist spring tide sweeping Europe are sure to convince many Italians to vote against Renzi.

The Italian economy, meanwhile — which Renzi boasted he would sort out — is a prisoner of the euro and remains mired in recession. Italy’s GDP has shrunk by 8 per cent since 2008 while Britain’s, for example, has grown by 8.2 per cent. Italy’s unemployment rate remains stuck at around 12 per cent (youth unemployment is nearly 40 per cent). Public debt keeps growing and is now 135 per cent of GDP — the third highest in the world by that measure. Italy’s banks — including Monte dei Paschi di Siena, the world’s oldest, founded in 1472 — are in deep trouble. They are badly undercapitalised and hold €360 billion of bad loans — the equivalent roughly of a fifth of Italy’s GDP.

In short, things are hotting up. What finished Berlusconi was not bunga bunga but the spread between Italian government bond yields and German ones, which had soared into the meltdown zone. The spread is rising rapidly once again and all eyes are on the referendum result. The more the spread rises, the more the interest Italy has to pay on its stratospheric public debt. If Renzi loses and resigns, there will be even more political instability in Italy than normal. Even if he does not, there probably will be anyway.

Joseph Stiglitz, a Nobel prize-winning economist and former adviser to Bill Clinton, recently warned that the eurozone is heading for ‘a cataclysmic event’. Asked if the Italian referendum could be it, he replied: ‘That is a big risk.’ He said the only solution, however, was to cancel the referendum.

Last week, while filming a referendum video, Renzi took down the EU flags that for years have stood alongside the Italian flags behind the prime ministerial desk at Palazzo Chigi. Perhaps he too is getting a little superstitious. But win or lose on 4 December, there is big trouble ahead for Italy — and for the EU.

Give something clever this Christmas – a year’s subscription to The Spectator for just £75 plus a free bottle of champagne. Click here.

Italy’s heading for its own Brexit moment
PM Matteo Renzi is on course to lose a referendum – plunging the country into even more chaos than normal
Nicholas Farrell

**david44** · 25-11-2016, 03:55 AM

Monte dei Paschi shareholders approve vital capital boost | Reuters

**wasabi** · 05-12-2016, 04:01 AM

Today was the day for the vote. I can wait until morning for the result.

**david44** · 05-12-2016, 05:44 AM

Italy referendum: Exit poll results suggest clear victory for 'No'

Polls called the vote for the No camp by a margin of at least 54 per cent to 46 per cent for the Yes camp

Italy referendum: Exit poll results suggest clear victory for 'No' | The Independent

**blue** · 05-12-2016, 05:59 AM

So what is the upshot of a No vote ?

**SKkin** · 05-12-2016, 06:06 AM

Originally Posted by blue

So what is the upshot of a No vote ?

**KEVIN2008** · 05-12-2016, 07:45 AM

This has nothing to do with the EU and is an Italian domestic decision....In short, Italians are being asked in referendum whether to greatly reduce the power of their upper house, the Senate.

**PAG** · 05-12-2016, 08:12 AM

A caretaker government will have to be installed, with a General Election, whilst not being certain, highly possible. Given the swing to the anti EU/Euro right wing that has occurred in Italy, a general election would ramp up pressure on Brussels to accede to the calls for reform.

In terms of further pressure on the EU/Euro, this is going to compound their problems:

https://www.theguardian.com/world/20...erman-minister

Greece must reform or leave eurozone, says German minister

Wolfgang Schäuble rules out debt relief for Greece before meeting of eurozone’s finance ministers.

Helena Smith in Athens
Sunday 4 December 2016 16.29 GMT

Greece must implement economic reforms if it is to keep its place in the eurozone, Germany’s finance minister has insisted, ruling out debt relief for the country ahead of a crucial euro group meeting on Monday.

As the finance ministers of member states using the single currency prepared to discuss fiscal plans for the coming year, Wolfgang Schäuble in effect presented Greece with an ultimatum: either it must enforce unpopular structural reforms or exit the bloc.

“Athens must finally implement the needed reforms,” he told the newspaper Bild am Sonntag in an interview published on Sunday.

“If Greece wants to stay in the euro, there is no way around it – in fact completely regardless of the debt level.”

Asked if German voters should be prepared for the inevitability of debt relief in the run-up to national elections next year, Schäuble quipped: “That would not help Greece.”

Schäuble, who also asserted the Greek budget was not burdened by debt servicing because interest rates were now so low, made the comments as speculation mounted over how best to put the thrice-bailed-out nation back on the road to economic recovery. On Friday the German finance ministry announced that short-term measures to lighten Greece’s debt load would be among the proposals up for discussion at the euro group meeting.

Athens’s leftist-led government has long argued that the country’s staggering €330bn debt load is the single biggest impediment to sustainable growth. It is an argument that has won backing from the International Monetary Fund.

Time is of the essence. The economic crisis enveloping Greece is far from over despite more than €300bn of emergency loans since 2010 when, after its first brush with bankruptcy, it received its first EU-IMF sponsored bailout.

Amid relentless tax rises and budget cuts – the price of the aid – support for the euro is falling fast with graffiti extolling the virtues of the drachma appearing across the capital. Euclid Tsakalatos, the Greek finance minister, has said the situation “is as critical as it was in the summer of 2015” when, under threat of euro ejection, Athens received its third €86bn rescue package.

With his own popularity plummeting in the face of fury over creditor-mandated cutbacks, the prime minister, Alexis Tsipras, had hoped to wrap up a second review of policy measures in time for Monday’s meeting as part of a broader strategy to secure short-term debt relief and participation of Greek bonds in the European Central Bank’s quantitative easing programme. The latter, he argues, is vital to Greece returning to international capital markets when its current bailout expires in mid-2018.

Instead, the review has been bogged down by disputes over contentious labour reforms including the abolition of collective bargaining and guards against companies laying off workers – red lines for leftists in the ruling Syriza party. Recently the IMF has added to the pressure, saying Athens will have to apply €4.2bn worth of extra measures to meet fiscal targets after 2018, a demand widely seen as the tipping point for austerity-whipped Greeks.

But Tsipras is also acutely aware that forthcoming European elections and the possible loss of sympathetic friends – starting with Italy’s Matteo Renzi in Sunday’s referendum – could spell further trouble for the eurozone’s weakest link by quashing any chance of debt relief. Tellingly, leading Syriza cadres and MEPs have in recent weeks underlined the need for a “plan B” and not ruled out euro exit.

Highlighting the significance of Monday’s euro group meeting, the EU economic affairs commissioner, Pierre Moscovici, said discussion of fiscal plans would take place against a backdrop of the commission calling “for a positive fiscal stance for the eurozone as a whole”.

**chassamui** · 05-12-2016, 08:45 AM

Originally Posted by PAG

But Tsipras is also acutely aware that forthcoming European elections and the possible loss of sympathetic friends – starting with Italy’s Matteo Renzi in Sunday’s referendum – could spell further trouble for the eurozone’s weakest link by quashing any chance of debt relief. Tellingly, leading Syriza cadres and MEPs have in recent weeks underlined the need for a “plan B” and not ruled out euro exit.

The foundation of the Euro, and probably the EU, continue to crumble.
Unlike the unelected commissioners, national leaders have to face their respective electorates.
Italy is leading the way ahead for the Euro, Germany and France next.

**VocalNeal** · 05-12-2016, 10:21 AM

Originally Posted by chassamui

The foundation of the Euro, and probably the EU, continue to crumble.

Probably because of the "unelected commissioners"

**Cold Pizza** · 05-12-2016, 12:46 PM

Originally Posted by VocalNeal

Originally Posted by chassamui

The foundation of the Euro, and probably the EU, continue to crumble.

Probably because of the "unelected commissioners"

And I sympathize with those that voted "No."

Well see what happens.

**chassamui** · 05-12-2016, 01:38 PM

Originally Posted by Cold Pizza

And I sympathize with those that voted "No."

Well see what happens.

You have already shown how little you understand about US politics. Why come here and show how much less you understand the EU?

If we need a fart in a trance we'll call you. Don't wait up.

**buriramboy** · 05-12-2016, 02:52 PM

Well done Italy now would be nice to see the president call an election straight away instead of waiting till the scheduled date of 2018 then hopefully Grillo and his 5* movement will win Italy will then have a referendum on whether to leave the Euro or not. Welcome back the Lira and another nail in the coffin of the EU, it's demise just can't come quick enough.

**Cold Pizza** · 05-12-2016, 05:49 PM

Originally Posted by chassamui

Originally Posted by Cold Pizza

And I sympathize with those that voted "No."

Well see what happens.

You have already shown how little you understand about US politics. Why come here and show how much less you understand the EU?

If we need a fart in a trance we'll call you. Don't wait up.

I know more about US politics than most on this board. I'm a former political junkie who worked 2 blocks from the Congress and Senate in Washington DC. Attended invitation only events. Not boasting just saying it was my passion. I used to read several books per year on politics in my free time.

No, I do not know much about Europe, but I do read up on certain issues, like....this Italian one.

Too bad you can't stick to the facts, Chass.

But then again, you never could.

**chassamui** · 05-12-2016, 07:08 PM

Originally Posted by Cold Pizza

No, I do not know much about Europe

Agreed. Like I said, don't wait up. Might I remind you that there is a huge gulf between knowledge, i.e. you reading a book, and the understanding of said knowledge. It is abundantly clear from your posts, and the sources you follow, that the understanding part is missing in your case.

**david44** · 05-12-2016, 07:17 PM

Originally Posted by Cold Pizza

used to read several books per year

Were these with joined up thinking and no pictures, I am really impressed

**Cold Pizza** · 05-12-2016, 09:02 PM

Originally Posted by chassamui

Originally Posted by Cold Pizza

No, I do not know much about Europe

Agreed. Like I said, don't wait up. Might I remind you that there is a huge gulf between knowledge, i.e. you reading a book, and the understanding of said knowledge. It is abundantly clear from your posts, and the sources you follow, that the understanding part is missing in your case.

You need to show specific examples.

I'm waiting.

**SKkin** · 05-12-2016, 09:18 PM

and just like that...

"As Guillermo Sampere of MPPM EK put it: "After Brexit, it took three days for markets to shake it off, with Trump it took three hours, with Italy it took three minutes.The fast money, who expected markets to fall further with this outcome, are now covering their positions.""

somebody is raping the "Muppets" again...

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