Today, Italy votes on a referendum that will change the course of not just Italy but the entire EU. While we gripe about water charges, bogged down by our own incompetence, the world around us is changing dramatically. These changes will have enormous ramifications for us.
Italy could easily become Europe’s Wisconsin. By this I mean that Wisconsin was a banker for the Democrats in the US election. It was a traditional Democrat state, but this time it swung dramatically to Trump.
Italy is similarly a traditionally pro-EU country — a European Wisconsin — but is it now swinging against the EU?
We will have the answer later tonight.
The Italian referendum was called by the youthful prime minister, Matteo Renzi, in order to secure a mandate to govern Italy in a more slimmed-down, centralised fashion.
Renzi fears that the dysfunctional Italian political system can’t deal with the simultaneous challenges of massive debts, low growth, an imminent banking crisis and mass migration.
He may be right, but polls suggest that Renzi’s gamble appears to have backfired and the opposition is arguing successfully that his reforms are totally undemocratic.
Although technically the referendum is about the Italian constitution, it has become more than that. The referendum has become yet another battle between the insiders and the outsiders.
Lined up on one side seeking a yes in the constitutional referendum are the insiders – the establishment, the government and, of course, the EU, the Commission and the ECB.
On the other side is a bizarre Fellini-esque alliance of Outsiders centred on the leftist/populist Five Star Movement led by the clown Bepe Grillo, who is joined by various environmentalist groups, communists and single-issue regional agitators. These guys are now also in bed with, right over on the other side of the political spectrum, the right wing and the quasi-fascist Northern League. The League wants the rich north of Italy to secede from Rome and therefore break up the country. It’s another popular insurrection à la Trump and Brexit.
Interestingly, both the populist/leftist Five Star Movement and the right-wing Northern League want Italy to pull out of the euro, having identified the euro as the cause of Italy’s economic torpor.
I visited Italy two weeks ago and it does seem like a country on the verge of a nervous breakdown. Its once dynamic economy has hardly grown in a decade, youth unemployment is among the highest in Europe, tens of thousands of young educated Italians are leaving and the country is on the frontline of mass immigration. 155,000 migrants arrived in Italy, mainly from Africa, this year alone.
There is a real sense that Italy can’t cope, or at least that the establishment doesn’t have a plan.
The EU has said that Italy should pay for and settle the migrants. The Italians respond that they have no money because the Germans insist on the Italians running a budget surplus.
The Italian banking system is on the brink.
Eighteen per cent of the total loans made by Italian banks are now non-performing. The Italian banking system has less than 50 per cent of the capital it would require to cover the bad debts. Estimates are that Italian banks may need €40 billion just to remain solvent. Where will the Italian banks raise this sort of money, in a hurry?
The Italians want to bail out their banks with more sovereign debt, but the Germans want the banks to pay from their own resources because the Germans want to ring fence Italian banks to Italy. Italians want a European solution – after all they are part of the euro.
Ordinary Italians are not waiting around and fear that what happened in Cyprus will happen in Italy, prompting a massive bank run. As a result, they are moving their cash out of Italy ahead of that bank run.
I am almost certain that Italy will have a huge banking crisis in 2017.
In short, Italy is turning into a big Greece, and the EU is looking the other way.
Italy’s shrinking economy
All the time, the Italian economy is shrinking. While the rest of the OECD has more or less recovered after the crash, since 2008 the Italian economy has shrunk by 11 per cent, and personal income by 13 per cent. While household consumption in the OECD is now 7 per cent above its 2008 levels, Italian household spending is 12 per cent below where it was in 2008.
The Italian savings rate is down from 15 per cent to 11 per cent, implying that Italians are dipping into their savings to maintain even these diminished levels of spending.
Italy has long been Europe’s second-biggest manufacturing power, beaten only by Germany.
But Italian industry is under huge pressure.
Almost one manufacturing firm in five shut between 2009 and 2012.
Production is now 26 per cent below 2007’s peak. Industrialists are blaming the euro.
In the past, Italy used to devalue the lira every now and then. This would give Italian industry a shot in the arm and the Italians could remain competitive against the Germans. Since the adoption of the euro they can’t devalue. They were forced into austerity and demand has collapsed. Is it any surprise that Italy’s opposition both on the left and the right want to return to the lira and jettison this euro experiment?
So the stakes today are extremely high, not just for Italy, but also for the EU itself.
However, the one thing we know about Italy is never to write off the country. Compromise and deal-making are in the Italian DNA. Indeed, the fluidity of its governments – more than 67 in 60 years – attests not to political fragility but to durability in the sense that with compromise so central to the political process, the system can deal with anything. Contrast this with Britain, which after years of supposedly stable single party governments allied to an absolutist first-past-the-post system, faces, not just an exit from the EU, but a possible break-up with Scotland all triggered by one ill-conceived referendum.
Which system is more fragile: the flexible, compromise-driven Italian system or the rigid, absolutist British system?
Put simply, the Italians would never be so politically naive as to bet the house on a 50/50 outcome. But what the Italian vote today will signal is which way the wind is blowing. Will Italy fall to Outsiders and suffer a Brexit and Trump popular insurrection? Will Italy be a dress rehearsal for France? If so will defeat for the establishment in Rome thus embolden Le Pen in Paris?
That for Ireland is the big question because if Le Pen wins in France, the EU is toast.
Meanwhile Hofer lost the election in Austria, against expectations and bookies. Austria is very important geopolitically and they have done everything to prevent Intermarium, a project intended to reverse the old duopolism on Elbe: from rigging the previous election, to delaying a re-run by a few months because of the mysterious problemns with a… glue (unlike Poland, UK and the US, there was no movement to control the election count in Austria). I watched the debates, they were conducted in a shockingly civilised manner, with Hofer reading quotes from his opponent. At some stage, Hofer accused him of being a… Read more »
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I agree with a lot of what you are saying David. Old(ish) Europe is in the process of being shaken up and it remains to be seen whether it reverts back to a really old Europe (i.e. of early 20th century) or a new, looser and less centralised, more inter-governmental Europe. The Euro as it stands is looking increasingly difficult to hold together. Could some reduced form of Eurozone, led by Germany and consisting of Benelux, Austria etc. emerge? That is a possibility. But for many peripheral Eurozone countries including Ireland, Italy and Greece, the Euro has not worked. It… Read more »
Economic growth in Italy between 1947 and 1987 was second to Japan. Yes that is correct. The only country to outperform Italy in those 40 years, in the industrialized world was Japan. And Japan had Total quality Managment, Juran, Demming, Statistical process control, the Japanese Engineering innovations, Toyota, Nissan, Sony, Hitachi, Sharp, Panasonic, and many more. For the Italains there was Fiat and Alfa Romeo. But also there was Parma Ham, Chianti, Gucci, and a lot of high end fashion products. A range of speciality products. Since 1992 Italy has produced an underperformance. In other words since the centralization of… Read more »
[ Which system is more fragile: the flexible, compromise-driven Italian system or the rigid, absolutist British system? ] The Italian system is currently overly bureaucratic. Renzi proposed to reform it. But he tried to bring the centralization of power into the deal, and ruined the proposal. MSM will also try to reform the system. But is more likely that they will go away from the centralization of power. The British system works on the basis of principles. Basically, there is an argument over principles, and then when it is resolved, implementation follows. Rigidity in British policy making tends to be… Read more »
Contrary to the constant official media mantra, Le Pen will not get into power in France. Le Pen is very different from the broader range of Euro-sceptic voices. She does not have the core principles, that place her as a clear alternative to the mistakes coming from Brussels. She might oppose their policies, but that is about it. France is in trouble. It is not in as much trouble as Belgium. Or even Italy. It is fallen way behind Britain. To the point that French graduates stream into London every year for work. France has fallen behind Germany, as a… Read more »
David, I am not convinced about the SNP achieving Scottish independence. In fact, my prediction is that the SNP will finish any hope for Scottish independence for a long time. They are increasingly corrupt, and amount to a votes for free stuff party. If Scotland becomes independent, then it will need adults in charge. Sturgeon and her stooges are not fit for the responsibility. She is very good at behaving like an opposition TD. But when in charge, all she does is borrow recklessly, and lie incessantly. She gets a free pass on the votes-for-free-stuff policies (soft corruption), in many… Read more »
As if to indicate that the culture of denial in Berlin, remains as absurd as ever, we now get this update from Merkel’s FinMin. https://mishtalk.com/2016/12/04/great-timing-award-wolfgang-schauble-says-greece-must-reform-or-leave-eurozone/ [ Facts of the Matter 1.Greece has an unsustainable €330bn debt load. 2.On May 6, In Leaked Letter IMF Tells Germany “Debt Relief for Greece or IMF Drops Out”. 3.On May 23, the leaked letter became an official announcement: The IMF warned “EU Must Give Greece Unconditional Debt Relief”. ] Merkel and Schauble have created this mess. They (along with Sarkozy and Olli Rehn) have produced a societal disaster in Greece. It is completely EU… Read more »
The greatest scandal involving outsourcing, (as in it produced the worst results, societally speaking) has been the outsourcing of policy making to centralized EU imperial bodies that are failing repeatedly.
The first example, of how to avoid this came from the Icelandic repsonse to the Icelandic meltdown.
Iceland is recovering. Ireland is deluding itself. And Greece is merely making matters worse.
[ While we gripe about water charges, bogged down by our own incompetence, the world around us is changing dramatically. ] Don’t worry. Everything will be graaaaand. The architect of the water charges fiasco is in Brussels, sitting at the top table of the nEU Politburo, influencing matters. And the unaccountable state monopoly who designed Irish Water to be a money collector (with no consideration of the level of services provided, or cost control) have escaped without any public scrutiny, let alon the badly needed investigation into what they were doing. The non-resident for tax purposes billionaire oligarch who was… Read more »
The defeat of Renzi, is a disappointment, in the sense that of all the prominent EU leaders, Renzi was willing to admit that there were serious failures coming central EU authority. In fact he even went so far as to talk about it openly and freely. [ a big non-no in EU power circles ].
Can M5S now propose to deliver results and get Italy out of the Maastricht inspired mess ?
Official Ireland has no plan for dealing with Brexit. Just loads of useless pronouncements.
Ireland has no plan for Trump bringing US investment back into the US. And even more ridiculous pronucements.
And Ireland will have no plan for French President Fillon.
We are no longer functioning intellectually, because official Ireland is in control and does not want any discussion. It is instructions not discussion. This is the destruction of democracy, in the name of the requirement of obedience to the needs of money. It produces results that are detrimental to society.
David is an Anglophile peddling Anglophile propaganda every chance he gets, mostly by talking up national banking crises that could lead to a collapse of the Euro. I hope he is getting paid for it, if not he is just an unpaid slave. Britain backed the Confederacy in the American Civil War in an effort to prevent the survival of an American Union, it now backs anything or anybody that remotely threatens the European Union. Just as the American Union survived, the European Union will survive. Both will eventually rid the world of the nasty mercantilism created by the British… Read more »
There are similarities between Fillon and Renzi and Cameron.
Two of these have talked openly about the need to reform the EU. And in case case, Merkel and Brussels gave them token recognition – whilst “reaffirming” the desire to change nothing.
And they are gone.
The biggest threat to Fillon getting elected is not Le Pen, but Merkel.
Merkel is the source of all the problems. Her intransigence, and tendency to talk down to everybody else, is alienating all of Germany’s neighbours.
Germany is not a sovereign country since WW 2.
Merkel has been imposed on German nation so as to control them, & destroy them.
Merkel is NOT German also.
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Most things are not what they seem to be.
There is an old saying: “a little learning is dangerous thing”. A little economic learning is a particularly dangerous thing. McWilliams’ half-baked suggestion that the Irish Government take some of its 12.5% corporation tax in the form of company shares is a particularly dangerous suggestion. He repeated it yesterday on his TV3 “Agenda” show http://www.tv3.ie/3player/show/1040/118194/0/Agenda. The ink would hardly be dry on the share certificates before the Irish Government would be selling them for cash. A new lucrative trading derivative would be handed to the banks putting them in the position of “Court Jews” as was Josce of Gloucester, who… Read more »
If European elites dont cop on soon that their attempt at technocratic dictatorship is not going to fly, the extreme right wing will begin to seize power and euro disintegration and war will likely follow. That is if the NATO warmongers dont put us to war with Russia in the meantime. We are in perilous times.
Turkey is in trouble.
http://www.zerohedge.com/news/2016-12-05/forget-italy-turkey-main-course
Corruption. Dodgy banks. An effective one party state. Incompetence. Aspirational infrastructure projects that exceed their expected utilization / effective return on investment. And a fondness for interfering in regional conflicts, and telling other people how to run their affairs. Regional conglicts. And declining balance sheets.
Interesting article about modern-day Greece — & with some references to modern-day Italy — penned by “Francis” on Henry Makow’s website henrymakow.com ;
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http://henrymakow.com/2016/12/dont-cry-for-greece-its-karma.html
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Makes u skeptical about movie directors etc.
The director-chair generals rejoice in by easy to follow scripts against patriot government “brave AND foolish enough” to “uni-laterally” go against The Banksters / The Dreadful Few. . I liked some Costas Garvas movies. Now, I would be cynical even of those. . Beware of director-chair generals on either side of Bankster argument. Beware of arm-chair generals on either side of Bankster argument. Beware always of arm-chair generals. In the main, they lack “moral courage”. . e.g. . Arm-chair generals of no small talent & knowledge against the Banksters did not go to fight side-by-side with Gadaffi. . . EXTRACT… Read more »
Proxy USA & proxy-of-proxy Ukraine are well capable of downing the Malaysian MH 17 [ with Irish passenger ] & rig it that Donetsk region rebels + Russia did it. . . More proof of Proxy USA & proxy-of-proxy “whomsoever” capability of cold evil is in the following ; . . Did the US-led coalition give the EXACT coordinates of Russian Aleppo hospital to Al-Qaeda for a missile attack ? . Alex Christoforou . EXTRACT . Blood on the hands of the US, UK, France and their sympathizers for the Aleppo Hospital attack. This becoming a very familiar pattern. Every… Read more »
The bankrupt EU is ready to pay Assad money if he gives Al Qaeda autonomy in various parts of Syria. . EXTRACT . EU will give Assad money if he allows Al Qaeda jihadists to rule over parts of Syria . Alex Christoforou The EU is planning to offer Assad financial aid in exchange for allowing Al Qaeda to stay in power in some regions of Syria. This may very well be the bribe of the century. Instead of helping EU citizens suffering from years of austerity, poverty and misery, the EU oligarchs ruling in Brussels prefer to give EU… Read more »
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
I just purchased Jonathan Sugarman’s self-published ebook for only $3.99. I am looking forward to reading it in PDF.
“The Whistleblower – Lifting The Lid On Ireland’s Banking Sector Just Before The Bust”
https://t.co/6N3Y1XSjxC
“Ordinary Italians are not waiting around and fear that what happened in Cyprus will happen in Italy, prompting a massive bank run. As a result, they are moving their cash out of Italy ahead of that bank run.” Not surprising when your government signed on with the G20 to bailin the depositors money in the next crisis. Anyone keeping money in any bank is looking for trouble. Unfortunately that includes any who cash stocks or bonds temporarily, or deposit the proceeds from realestate sales or even deposit funds in a bank to use as a down payment to purchase the… Read more »
Richard “Posh” Boy-d Barret’s Brain = Ruth Coppinger’s Brain
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AND, HERE IS THE PROOF ;
Worth, printing, & enlarging, & laminating.
Thus, u have ready reckoner for to remind u when u are being conned by such hypocrites.
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http://investmentresearchdynamics.com/nato-the-obama-government-and-fake-news/
“In a document distributed by Propaganda or Not?, this pseudo-NGO, born of associations financed by the Obama administration, clearly names its enemy – Russia. It accuses Russia of having been the origin of the 9/11 Truth Movement and the Internet sites supporting Syria and Crimea.
On 2 December 2016, the United States Congress voted a law forbidding all military co-operation between Washington and Moscow. In the space of a few years, NATO has re-activated MacCarthyism.”
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
Tony Brogan: Ah Banderas Bay! I sold my Catalina sail boat to a guy there. He now operates it as a charter boat out of Puerto Vallarta. A fitting end to its exciting 24-year life with me. He has promised me a free day’s sail anytime I happen to be in PV. I have been there so many times that I think I hold the San Diego record for having sailed back “up the hill”. Everybody wants to sail down there but nobody wants to face the wind and seas on the nose coming back “up hill”. I know a… Read more »
Well, another very serious story currently is the Sugarman comments on banking regulation in Ireland. to put is succintly, Sugarman claims that he knew it was a joke before the banks ran out of money. And he knew the banks were running out of money, before it was evident. In fact he knew it was a joke, when the IT BS had the BoI chief economist telling us there would be no crash, and Austin Hughes was telling us there would be no hard landing (in the same comic). Sugarman is producing a damming indictment of official Ireland. Sugarman has… Read more »
Deco & Truthist: Deco asked me if I can “provide a rational critique of DMcW”. I had just wondered why he is always excluded from discussions on here about who knew what and when as if he was not part of it or as if he predicted it all as an outsider. He was and is an important member of the opinion-forming Irish media and should be questioned as such like all the rest of them. There is nothing irrational about that. I had also found it interesting that he chose Nigel Farage for his “Agenda” show rather than somebody… Read more »
Banking has become unconstitutional.
Enda Kenny, Francis Fitzgerald and Michael Noonan have responsibility.
http://www.google.ie/url?sa=t&source=web&cd=3&ved=0ahUKEwj-5ZHumePQAhUFDcAKHRLJBHwQwqsBCCMwAg&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DCuEhUicQz4s&usg=AFQjCNHh_LL2uZCPLIepnYCc64kysfhqTw
Banking is now out of control.
“If the supply of Russian engines were cut off, it would slow down satellite launches, cost serious money, and compromise U.S. national security, Air Force Gen. William Shelton, who heads Space Command, told Congress recently”
All this while the US sanctions Russia. Russian rocket engines are superior to anything the US can find to replace them. So sanctions were ignored in regard to the space program.
http://www.nbcnews.com/mach/space/why-does-u-s-use-russian-rockets-launch-its-satellites-n588526
http://investmentresearchdynamics.com/party-like-its-1999-the-stock-market-is-a-propaganda-tool/ “”The degree and level of propaganda now flowing from the Establishment and the Establishment-controlled mainstream media is on par with that of the old Soviet Politburo or German Third Reich. In fact, I’d confidently propose that this point is incontestable………………. lf the same GAAP accounting standards used in 1999 to measure corporate earnings – the standards having been relaxed more almost every year since 2000 to enable companies to report higher GAAP earnings – were applied to today’s earnings numbers, we would see that the current stock market is by far the most overvalued in history.”” When is a… Read more »
Grzegorz Kolodziej: thank you for the links to my June 2016 post re securitization. I really appreciate your effort to find it. I also watched the 2003 YouTube of David McWiliams you researched and provided. Here is a brief extract where he said that there were “no economic tools at our disposal to rein in lending. ” https://youtu.be/gXC0M4yVVJY. In saying that he was either covering for the Central Bank or he was completely ignorant of the rules of banking. I believe it was the former, I doubt he could be so ignorant of the primary role of the Central Bank.… Read more »
[…] Another battle between insiders and outsiders (DavidMCWilliams) […]
Your article helped me a lot, is there any more related content? Thanks! https://www.binance.com/bg/register?ref=PORL8W0Z