Is Italy the white hope for European reform?

The radical reformist and largely Eurosceptic coalition parties in the Italian government are declaring radical views. They have asked for 250 billion of Euro debt to be written off. Although it has been subtly since denied, it is entirely in character with their previous pronouncements and they still maintain that a pre-Maastricht system would be their preference. Apparently Italian bond interest rates have increased. Additionally according to the FT (intermittent paywall):

The anti-establishment Five Star Movement, the leading vote getter in March’s general election, tempered its anti-euro rhetoric during the campaign. But Wednesday’s call for the EU to return to a period before Brussels forced strict budget discipline to foster economic convergence among member states suggested the party was warming to the views of its potential coalition partner, the far-right League. …Luigi Di Maio, Five Star’s leader. “I see a certain fear among the Eurocrats. But they don’t scare me.”

Additionally Matteo Salvini, the leader of the (Right Wing- used to be Northern) ‘League’, and junior partner in the coalition, is now talking about #ItaliansFirst, which must apply to money as well.

Bepe Grillo, the original founder of the Five Star movement and a comedian by trade, has a very good understanding of money and this Youtube video from way back in 1998 is philosophically, as up to date as ever and well worth 11 minutes of your time.

I suggest we have to put our trust in this Italian coalition, which is the Euro’s seeming last hope for becoming a responsive and relevant supra-national currency. As the third largest Euro economy, Italy, unlike Greece, has some power. If the Italian government are successful in achieving Euro loan write-offs (as, I suggest, should be the aspiration of us all) I wonder how the left wing Brexit contingent, the so called Lexiteers, will react? Germany, where Mr Scholz, the new finance minister, who has, allegedly, an ambition for a budget surplus of 1 per cent of GDP which would, eventually, eradicate all public debt, will not be pleased, but perhaps the Italians will be able to enlist President Macron’s assistance in creating a more responsive Euro?

We can but hope…

Comments

  1. Andy Crow -

    I liked the Bepe Grillo.

    The thing is, his audience thinks he’s doing a comedy routine.

  2. Peter May -

    Perhaps – but that was in 1998 – twenty years ago – we’ve had the financial crisis since then so perhaps audiences these days would be more cynical?

    1. Andy Crow -

      Really. Twenty years ago ! It takes a long time to shift public opinion.

      You’d think the GFC would have had more people questioning the orthodoxy.

      A lot of the current cynicism seems to be along the lines ‘I can see what they’re doing, but that’s the way it is’. That’s more akin to fatalism in my book.

      It will be instructive to see what a new Italian government can do. The Eurozone won’t be able to shrug the Italians off as easily as they subjugated the Greeks.

      250 Billion sounds like a modest request. I think the new administration underestimates the size of the task they are taking on. Or is that per annum ?

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