EUCOM Economic Analysis - Part I

[Firn]

Really, what should one say. Even if the moderate center-left coalition wins the camera the senate looks absolutely ungovernable.

I mean Berlusconi winning the senato, Grillo in many regions over 30%. What has this country become?

It would be all quite funny if it wouldn't be almost true.

Ah che bello scappa'...

[Firn]

I tried to collect my wits after the 'risultato ingovernabile':

1) La madre degli imbecilli e' sempre incinta, the mother of the idiots is always pregnant. The success of the Berlusconi&company is hard to stomach, as many voters gave him their vote and trust already two times and should have seen what he has done with it twice. He came within 0,4% of winning the camera and was only narrowly beaten in the senato. Disgraceful.

2) Grillo and his movement hit indeed like a tsunami and has changed the political game, as with such a strong third force he has broken up the logic of the last twenty years. Until the triumph of the M5S, which became from 0% the strongest political party a relative majority in the popular vote resulted also in an absolute majority in the senato. Even with that advantage the smaller parties within a coalition could blow up governments as we have seen so often. It is rather shocking to note against the backdrop of our chronically unstable coalitions that we have now arguably the most gridlocked senato of the last twenty years....


So, what next? I see three paths:

1) The center-left, possibly with the center with or without Monti try to form a minority government. In this case the support of at least some Grillini will be key. In Sicily there was some moderate action and support by members of the M5S and Grilli and some of his movement did state that they were willing to vote for laws case by case.

Even a relative short duration would allow us to get a new president, which in turn could dissolve the chambers. Our current one can not do so if I understood the situation correctly as he is very close to end his term.

2) A great coalition with the right. Very difficult to imagine that, we have quite leftist members in the center-left coalition and quite rightist on the right plus persons like Silvio in the midst of all. The chances that nothing works are high. The M5S might profit from it's predictable failure. This might lead to path 3 with even better cards for Grillo.

3) New elections. The old parties possibly fear rightly a Grillo landslide if we have new elections. If you look at the numbers he is not that short from getting the majority in the camera and the senato. Still it is hard to see how we can avoid them and who knows what the result will be?

Not bad either. BTW the pencils Italy used to vote are at least 'engineered in Germany' by Faber-Castell. And they also gave this great songwriter his nickname...

[Firn]

I'm a bit sorry that I center the thread on Italy, but I do think it is one of the most important topics. La Repubblica does of course report the words of dear Peer, who called Peppe and Silvioclowns. I just hope he won't send us the cavalry, supported by blogging industry captains who sponsor his campaign!

Of course he is in this rare case pretty much spot on, but he was of course dead wrong to say it in public, especially while our president stays for three long days in Germany...

Far more important are the manovre di palazzo, the political maneuvers going on. And the words used by some is far more foul then 'clowns':

Dove ancora campeggia il post dal titolo: "Bersani, morto che parla". E dove Grillo sembra chiudere in maniera netta a qualsiasi forma di collaborazione organica con il Pd definendo Bersani stalker politico" che "da giorni sta importunando il M5S con proposte indecenti invece di dimettersi".

"Ha passato gli ultimi mesi a formulare giudizi squisitamente politici - si legge nel pezzo, in cui Grillo elenca tutti gli attacchi (a dir la verit pi che mai ricambiati) ricevuti in campagna elettorale dal segretario democratico: dal "autocrate da strapazzo" al "ci porta al disastro". "Ora questo smacchiatore fallito - si legge ancora - ha l'arroganza di chiedere il nostro sostegno (...) Il M5S non dar alcun voto di fiducia al Pd (n ad altri). Voter in aula le leggi che rispecchiano il suo programma chiunque sia a proporle. Se Bersani vorr proporre l'abolizione dei contributi pubblici ai partiti sin dalle ultime elezioni lo voteremo di slancio (il M5S ha rinunciato ai 100 milioni di euro che gli spettano), se metter in calendario il reddito di cittadinanza lo voteremo con passione".

Grillo also stated yesterday that Berlusconi bought 'most of his votes'. Still it is Italians insulting Italians, dear Peer...

I have a hard time to see any coalition between the three relevant political forces which seem to hate each other with quite some passion. Still path 1) which I outlined above seems to be the most likely but we will see with little doubt new election before 2015, even before. I hope that we get the election of the new presidente della Repubblica done as soon as possible.

[davidbfpo]

Europe has spent hundreds of billions of euros rescuing its banks but may have lost an entire generation of young people in the process, the president of the European Parliament said.

Since the region's debt crisis erupted in Greece in late 2009, the European Union has created complex rescue mechanisms to prop up distressed countries and their shaky banking sectors, setting aside a total of 700 billion euros.

But little has been done to tackle the devastating social impact of the crisis, with more than 26 million people unemployed across the EU, including one in every two young people in Greece, Spain and parts of Italy and Portugal.

Link:http://www.reuters.com/article/2013/...r&dlvrit=56943

A Reuters article citing at length the German Social Democrat who sits as President of the European Parliament, without doubt he is trying to make a mark as an EU summit approaches later this week. If there is one EU institution that is irrelevant in policy-making and democratic accountability it is this parliament - a very comfortable place to to sit and pontificate.

[Firn]

Link:http://www.reuters.com/article/2013/...r&dlvrit=56943

A Reuters article citing at length the German Social Democrat who sits as President of the European Parliament, without doubt he is trying to make a mark as an EU summit approaches later this week. If there is one EU institution that is irrelevant in policy-making and democratic accountability it is this parliament - a very comfortable place to to sit and pontificate.

The European Parliament certainly go merkelanized to some degree in the last years but it is quite relevant and busy in many areas if you go a little deeper. No wonder that those pesky Americans, not alone of course, offer help in shaping those key laws. I also voted for an guy there, if I'm not mistaken.

While I share certainly not all ideas of the center-left faction in the European parliament he is pretty much spot on. So much potential, so much productivity vasted by a mostly cyclical problem made worse by the wrong policies.

In any case that Austrian student showed excellent initiative and with others he brought attention some serious issues.

[Firn]

Quite a day in Europe and a rather rough one mostly for the people of Cyprus and a fair amount of Russian&Co. Who would have imagined that such a little island not even reaching 0,5% of EU's GDP could have cause such troubles. I bet that more money was 'burned' in stocks today then was necessary to keep the gray&bad banks of the Cybrian banking sector running. But wait, if memory serves right, there was a similar colder island, with very similar problems some years ago. Another green island, part of the EU, had also a massive financial sector which was blowing up.

The Icelandic raiders refused to give anything back to those who willingly lend to get a higher return on their money while the Irish burdened with some help the heavy load. In Cyprus we have seen a mix proposed, although far less bloody then in Iceland. Once again people brought partly black money there to wash it white while earning a handy return, far above the European norm. Still it was stupid and immoral to hit those who have little, especially after up to 100.000 were guaranteed a day before.

While the EU and the ECB handled the issue badly I'm honestly disgusted by the way the powers in Cyprus treated their people. From a variety of sources it emerges that key player of the ruling coalition wanted to have the burden shifted more 'equally'. To take less from the rich and tax evaders they wanted to take a good deal from the poor. Not only did they try to protect the former but also their personal wealth. I would be not surprised at all if there were lots of last-minute transfers from the politcal caste and the well-connected. Disgraceful.

[davidbfpo]

It was odd to listen to a German politician being interviewed on the BBC radio yesterday about Cyprus. Best bit was when he mentioned all the work to guarantee EU-wide bank deposits up to 'X' level and along comes Cyprus - which has ruined any public faith in secure banking.

What is more interesting is the exposure of Russian deposits and the potential for questions about "dirty" money and money laundering. Whatever the pretence of much anti-money laundering regulation, it is clear that for (some) governments "dirty" money is a source of income, albeit at a price sometimes.