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Old 11-06-2011   #1
Kevin23
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Question The future of European stabilty?

Greetings to everyone here at SWC I've been fairly busy recently and haven't had much time to contribute.

This is question that I've had on my mind for sometime now after reading a number of articles on here and in FP as well as in a number of other sources. even though it may sound far-fetched and to many impossible, but given everything that has been happening on the continent is the future of European security stability in jeopardy? Especially since talk of a collapse of the EU and questions over the continued relevancy of NATO are increasingly being regarded as no longer impossible. To add on this topic Europe has fought two very bloody and geopolitically altering wars over the past 95+ plus years

Additionally, the financial and economic situation across Europe as a whole seems to be getting worse by the day. And the places where it appears particularly bad in countries that don't have a long tradition of being Democratic or having weak institutions or are thoroughly corrupt in many areas of society i.e. Greece or Italy.

For many the crisis appears to have no end in sight, and appears to be spreading not only are countries like Greece facing the possibility of default. But there has also been question's over Italy, Spain, Portugal, Hungary, and even France. The latter of which all could be impossible to bail out.

Likewise, the economic crisis in Europe has also exposed the limit's of European unity and cooperation ex. you have conservative politicians in Northern European nations like Germany and the Netherlands railing against " the lazy people of Southern Europe, saying that the German, French, or Dutch taxpayer is footing the the bill for Southern excesses and corruption". While Southern European and Mediterranean politicians and attitudes are bringing up such unwelcome memories like the German occupation of Greece during WWII and other things dealing with the fmr. the Nazi regime as if Germany owes these countries something for past treatment.

Also right-wing parties across the continent from Britain to Greece have seen their fortunes do pretty well in recent years. For instance, the FN in France is polling somewhere between 2nd and 3rd place under a new leader, Geert Wilders party has experienced a string of electoral successes and is still polling quite well, in Italy an anti-immigrant party and a Neo-Fascist sit in Silvio's Coalition government, and in Austria it looks like the Freedom party stands a chance of possibly forming a government in the next election. The success of these parties has been in large part due to wide ranging concerns in European societies, especially over the integration of immigrants mainly from the Middle East and Africa, further European integration, and the current financial crisis.

Furthermore, many have observed that the European social fabric is gradually buckling under the weight of the financial crisis. As there have been riots and other notable violent disturbances in a number of European cities ranging from Paris to Rome and most recently all over the UK and Athens this past summer. I was in London this past summer and the general impression I got from what happened was that the events there could have easily happened in any other European country say France, Spain, or Italy.

European governments seem to be splitting apart from each other on other issues also. For instance, France was strongly supportive of the intervention in Libya last Spring while Germany was the opposite and even abstained from it in a UN vote.

These are all just a few examples of why geopolitical stability n Europe is being question. However, what would things look like if the EU and NATO collapsed due to these pressures? Friedman's Stratfor said in a series of articles on this subject that things would go back the way things were a century ago in a way, with a large number of smaller European countries and three main Continental powers i.e. France, Germany, and Russia.

Even though this hasn't been discussed in much more detail other then the sources I mentioned, is the future of European security stability in jeopardy? Is the world going to have to worry about an unstable Europe again?

If there are any opinions I'd like to hear them.
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Old 11-06-2011   #2
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The reason for NATO's relevance in Europe is that it keeps Continental Europe and the U.S. from becoming hostile to each other (which would be in neither's interest).
Staying in NATO furthermore means stability, as no European foreign politician has to care about the classic construction and sabotage of short-term alliances. Staying in NATO simple means one foreign political problem less.


The current financial market crisis which includes the exposure of unsustainable economic and political models in countries which never came close to meet the standards required for the common currency and in countries that actually should not be in trouble (but are being pushed into needless troubles by speculation) is a drastic crisis for some European countries, negligible to others.

The institutional Europe has to learn that (despite being quite pro-Europe ideology-driven) is can make mistakes and did some. So far the successes overshadowed mistakes, now there's an exception. A weakening of the pro-Europe ideology and subsequent greater ability to correct earlier pro-Europe moves can very well lead to a better union.

The greater awareness for the economic differences of the member states helps as well. On top of that Germany has never been more close to understanding that its huge trade balance surplus is a problem, not a performance to be proud of.



Finally; Europe doesn't break apart because of a crisis like this. That's a scenario for people who don't care about reality.
Much of Europe has been institutionalised, much has become a quite irreversible habit; even a total failure of the common currency would only scratch the surface of European integration.

The idea of fixing the exchange rates (= common currency) was stupid anyway, many economists told so since the mid-90's. It was an ideological overreach.

The next logical step was not to unify currency, but to unify media. The continent cannot unify more without having a more similar perception of the world. Nation-wide news need to cover about the same topics with about the same emphasis and lead to a political homogenization this way.
Boring TV channels such as Arte don't cut it, what we need is a media network that produces almost the same content (partially regionalised) in different languages.
National 'balloon boy' BS stories need to give way for the major stories from other countries. I haven't heard about he foreign policy of Lithuania EVER.
That is where unification can proceed and has to proceed if at all.
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Old 11-06-2011   #3
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Reuters headlines this AM (in my time zone), probably demonstrating nothing other than that someone at Reuters is fed up, but interesting in that such things shape perceptions:

Euro has new politburo but no solution yet

Markets abandoning hopes for lasting euro zone solution

Euro zone's political bumbling risks global gloom

Euro zone countries could split, says Goldman Sachs exec


Just looked at Yahoo Finance and it all kind of jumped out... maybe I'll even read them.
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Old 11-07-2011   #4
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Default European Integration and Security

Speaking as a Brit (and we have a distinctly ambivalent view of Europe) the problem with the European Project is that integration has been seen as:
  • Too Fast
  • Politically unaccountable

Too Fast: As Fuchs points out we are not yet 'European' with a common identity.

Unaccountable: In Britain we alternate between despair and cynicism with our political elite. We feel completely divorced from the European political institutions.

From a security perspective the economic turmoil is leading to political turmoil which historically has encouraged the rise of radical elements and movements.

RUSI has done an interesting paper on the possible security ramifications: RUSI: The shape of Europe to come
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Old 11-12-2011   #5
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Default Arab Spring: European Autumn

A nice phrase used on the BBC's Newsnight yesterday as the parliaments in Greece and Italy voted in technocrats as their new, financial market credible prime ministers. The technocrats in both cases have only just become parliamentarians and have no electoral mandate.

There are numerous factors involved Kevin23 and it is easy to portray the situation as one where the key players are: the nationally elected politicians, the public, the international markets, bankers and multinational institutions in particular the IMF and EU.

For sometime now European democracy prided itself in elected politicians choosing the framework for a social market economy, principally at a national level and with some sleight of hand IMHO at an EU level. All appeared to work well until financial affairs upset the market economy, made worse as a recession looms closer and the public mutter why should I pay for this?

European democratic legitimacy appears to be increasingly challenged by the appeal to a technocrat at the helm and an institutional oligarchy. Sounds like the 'New International Order' to some.

It does seem odd after the 'Arab Spring'.
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Old 11-12-2011   #6
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EU is an idea that is ready for good times....I guess we will see if it is ready for hard times. I suspect it is not, and that this could tear it apart. Or worse. We'll see.
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Old 11-12-2011   #7
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I don't think we have to worry about security in Europe or even Europe's approach to security in neighboring regions. Even if Germany abstained from participating in the Libya conflict, it did not obstruct it nor did it downgrade its participation in the alliance or lodge any kind of major objection. The European states are still firmly loyal to the American global system and will hold on for dear life to ride out the current problems. The future crisis is not if the EU will break up, but to what lengths the dominant EU states will go to keep the organization viable. Already Greece and Italy are required to impose stiff austerity packages and I'm sure we will see the continued destruction of national sovereignty by necessity.
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Old 11-13-2011   #8
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Default A riposte from a European, no a Brit!

AmericanPride,

You state two matters I will take issue with:
Quote:

1) The European states are still firmly loyal to the American global system...

2) Already Greece and Italy are required to impose stiff austerity packages and I'm sure we will see the continued destruction of national sovereignty by necessity.
Re: 1) There are many aspects to this 'system' and some of the changes are being made by the USA, notably a shift to the Pacific. Then there is the ex-UK Prime Minister John major making one of his rare forays into public policy:http://www.telegraph.co.uk/news/poli...ationship.html

And 2) There is a view that the technocrats in the national banks, international finance and EU institutions created the problem, so they are hardly the best choice to find a solution.

Nor should we overlook the apparently dominant role of Germany in the various "rescue" packages, the imagery of "bankers from Berlin" supervising national economies could set off a fuse in Greece and Italy.
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Old 11-13-2011   #9
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I agree with David.

Also worth noting is that wars have started over less, and many of those have been in Europe.

When sovereign states are cobbled together with paper, it better be some damn good paper, as even a single flaw can be fatal.

The US Constitution was the paper that cobbled together 13 sovereign states; but it pointedly both ignored and avoided one, unsolvable issue....and it damn near destroyed us. We had enough commonality of language and culture to battle back from the brink, I don't believe that exists in Europe. EU may have been too bold; a move that vaulted Governance too far in advance of where populaces stand on the matter of sovereignty and what they are willing to surrender to government. (see the slide I posted on the defining COIN thread)

To ignore the people and to instead seek to preserve the EU as it stands may be folly. Perhaps, like the NCAA there needs to be some new conferences drawn up to create more effective aliances...but that too can create competing teams of states and also lead to war.

All paths can lead to war or peace (and typically do). I doubt it will be a "small" one though when it pops, and I hope, that like in the last two, the US does not have a large standing army when it happens and is thereby forced to sit out the first couple years once again. Far better to be in a power position at the finish, than at the start.
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Old 11-13-2011   #10
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Default I'm a banker, a technocrat trust me!

Quote:
The new Greek prime minister, Lucas Papademos, was the man who, as head of Greece’s central bank, fiddled the figures to enable Greece to get into the euro (against the rules) in the first place – before being rewarded with a senior post in the European Central Bank. He is no more democratically elected than Mario Monti, who will most likely be Italy’s new prime minister and had hurriedly to be made a “senator for life” to qualify him for the job. Monti’s main qualification is that, as a former senior EU Commissioner, he has long been a member of the Brussels elite himself.
Yes the author is not neutral in these matters, but IMHO this paragraph is factual:http://www.telegraph.co.uk/comment/c...democracy.html
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Old 11-13-2011   #11
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About democratic legitimation:
The members of parliament have the mandate to elect a head of government in most European states. This means that such prime ministers are democratically legitimated in the framework of representative democracy, even without having been candidates for the job during general election campaigns.

About the Greek guy:
Poor choice.
He already proved his lack of integrity and lack of competence to no doubt.

What the Greeks really need is someone who leaves the Euro, converts all debt to free exchange rate Drachme, inflates the debt away and by the way also breaks the sticky wages that inhibit many reforms.
Greece could be out of its troubles by 2020, if only it leaves the Euro and gets rid of the debt. It might become unbearable as EU member by doing so, though.
Maybe it could let its membership rest (= not being subject to EU rules and decisions, but also no Greek bureaucrats in Bruxelles, no Greek EU parliament or commission seats and no Greek vote in the councils).
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Old 11-13-2011   #12
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Default Walk me through?

Quote:
Originally Posted by Fuchs View Post
What the Greeks really need is someone who leaves the Euro, converts all debt to free exchange rate Drachme, inflates the debt away and by the way also breaks the sticky wages that inhibit many reforms.
Greece could be out of its troubles by 2020, if only it leaves the Euro and gets rid of the debt. It might become unbearable as EU member by doing so, though.
Maybe it could let its membership rest (= not being subject to EU rules and decisions, but also no Greek bureaucrats in Bruxelles, no Greek EU parliament or commission seats and no Greek vote in the councils).
Ok, let's assume that Greece will leave the Euro.

Given the following assumptions on my part, I have some questions.

First the assumptions:
  • The Greek Drachma will trade below the Euro. Let's assume 341 Drachma to the Euro for the purposes of this conversation at the start of the exit from the Euro, and that as more information regarding Government debts surfaces the conversion rate will further drop against the Drachma.
  • Greek government employee rolls will be decreased, resulting in an increase in unemployment....government employees, companies offering government services, etc.
  • Greek social services will be decreased, resulting in increased uncertainty and restlessness in a vulnerable segment of the population.
  • The average Greek will act to maximize their lot in life.

Now the questions:
  • Given that the average Greek is aware that a hypothetical 1,000 Euro's in his/her bank account is about to lose value in the conversion to Drachma, how will bank runs be controlled? (An exchange rate of 1 Euro = 341 Drachma today, perhaps worse tomorrow) Corralito?
  • How does the precedence set with your proposed course of action for Greece impact Slovenia, Ireland, Portugal, Italy, Spain, and potentially France?
  • What are the measures to be put in place to prevent bank runs in the rest of Europe?
  • What are the anticipated impacts of the exit of Greece from the Euro upon the rest of the world?
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Old 11-13-2011   #13
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Only Greece and Portugal makes sense for an exit from the Euro.
Thus only bank runs in these countries make sense. They could happen without making sense, of course.


In regard to Greece, I would simply not exchange Euro for Drachme, but instead simply establish Drachme as the official currency - and send the police to close all businesses that refuse to accept Drachme.
Euro would effectively be a foreign currency, and be used accordingly (see Kosovo).

Meanwhile, the Greek state would receive all its revenues in Drachme and pay all its employees and contractors in Drachme.

Whatever state bonds the Greek banks hold (and would lose) could be compensated by the government adding equity capital to those banks on an as-needed basis. A kind of equity capital giver of last resort for one year (including an immediate re-election of the management board so current shareholders have the opportunity to make sure the management doesn't see this as a carte blanche for risk speculation).


There would basically no reason for a bank run, as the Euros in bank accounts would not lose value and the banks would have liquidity.



Impact outside Europe; see the latest Argentinian bankruptcy. Everyone got over it.


Whatever damage such a drop out of the Euro means; it has to be compared to the damage that's being done by staying in it.
The currency is awfully overvalued for Greece, the ECB is no lender of last resort to them and they cannot handle their debts without a bankruptcy or strong debt devaluation (-1/2 is probably not enough; they would be on the safe side with -2/3).


They' have a between the devil and the deep blue sea. No answer is going to be nice.
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Old 11-14-2011   #14
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Default Lack of ordnung, lack of linearity...

Quote:
Originally Posted by Fuchs View Post
They' have a between the devil and the deep blue sea. No answer is going to be nice.
Agreed. Risk is increasing for all of us in this interconnected world (..."the probability that an investment's actual return will be different than expected.")

In my previous post I posed some questions regarding how a Greek exit from the Euro and how that will impact the average Greek who uses banks to pay bills and save a bit of money. Retail banking is not the only sector that is impacted however. (Greece seems to have 20 main banks at the time of this post by the way - Citi and HSBC stand out).

The impacts upon Contract Law are interesting to think about.

Commercial Banking, Investment Banking, Central Banking (ECB and Bundesbank), and the IMF are also involved as bank runs are not limited to just the retail sector. We can see associated risk expressed as increased interest rates for sovereign debt, reduced interbank lending, and increased lending by central banks.
Quote:
“The market is pricing in an Italy event and assuming that Italy fails,” said Patrick Lemmens, a senior money manager who helps oversee about $13 billion, including Intesa Sanpaolo shares, at Robeco Groep in Rotterdam.

Household deposits in Italy still are expanding “at a moderate pace,” according to the Bank of Italy. That’s a contrast to withdrawals seen in Greece, Ireland and Portugal.
Quote:
Italy’s lenders started increasing their reliance on the ECB in July, when end-of-month borrowings from the central bank minus the amount deposited reached 58.8 billion euros, according to John Raymond, an analyst at CreditSights Inc. in London. Before that, net borrowings from the ECB ranged from 9 billion euros to 30 billion euros, he said.
The Economist Intelligence Unit has a timely, and interesting, read to consider: After Eurogeddon? Frequently Asked Questions About the Breakup of the Euro Zone.
Quote:
There are too many unknowns to make confident predictions about the trajectory of the crisis or the extent and speed of any break-up, should efforts to save the single currency fail. The following FAQ represents an exploration of alternative scenarios that diverge from our central forecast. We attach a 60% probability to this central “muddle through” scenario, not least because the catastrophic consequences of a break-up provide a strong incentive for policymakers to do whatever is necessary to save the euro. In contrast, we think there is a 35% chance of a break-up of the euro zone, in which the most likely scenario would be the exit from monetary union of the smaller so-called “periphery” economies, as well as both Italy and Spain. We assign a 5% probability to Greece leaving the euro zone on its own, without triggering other departures.
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Old 11-14-2011   #15
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Having very recently aquired Greek bonds for a price of 40 cent on the € running only another year I have to say that I do believe that Greece will pay back his debts reduced by a big "voluntary" haircut, but that it also has to get the economy running again and to clean up the economic mess resulting in huge regular debts.

Sadly Greece and a lot of Greek have used European funds too often in the worst possible manner, making them nothing more then very inefficient short-term boosts for income and growth. This approach is sadly also quite widespread in southern Italy, where money from the North and Europe just seems to flow through rotten buildings and invented land into the pockets of some "clever" ones.

However I do think that the fellow Italians still think that Italy will make it. Sadly it is pretty much Italian to react when it is almost too late, just look at the way Italy entered the Euro and that many think politics don't make an impact on their live. We had for so many years now a deeply corrupt, shadey sun king as PM, very capable to keep his power through all sorts of "manovre di palazzo", media power and money but utterly uncapable to work for the good of the nation and the common people. A PM able to sell failures with a false smile and big gestures, perhaps best seen in the earthquake of Aquila where he played the salesman with great acumen and but hardly bettered the live of the fellow countrymen hard hit.

So let us hope that Monti like Prodi before will do the right thing and won't get hindered to much by the "casta politica". I still remember my anger when Prodi got backstabbed by a small radical part of his fragile alliance, paving the way for Berlusconi once again. The gravitas of the situation should however (hopefully) keep such attempts in check.

I also don't believe that Italy will leave the Euro, the pride is in this case too big, perhaps trumping also economic reason.

Last edited by Firn; 11-14-2011 at 08:28 AM.
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Old 11-15-2011   #16
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Quote:
Originally Posted by Firn View Post
Having very recently aquired Greek bonds for a price of 40 cent on the € running only another year I have to say that I do believe that Greece will pay back his debts reduced by a big "voluntary" haircut, but that it also has to get the economy running again and to clean up the economic mess resulting in huge regular debts.
No risk, no reward.

Quote:
Originally Posted by Firn View Post
Sadly Greece and a lot of Greek have used European funds too often in the worst possible manner, making them nothing more then very inefficient short-term boosts for income and growth. This approach is sadly also quite widespread in southern Italy, where money from the North and Europe just seems to flow through rotten buildings and invented land into the pockets of some "clever" ones.
Regulatory frameworks and associated staffing seem to be a tough balance for any country to get right; criteria that most can agree too (popular by-in) enforced by impartial regulators with fairly recent industry experience, in sufficient quantities, with appropriate powers to reward and punish...hmm maybe it's just a utopian dream

Quote:
Originally Posted by Firn View Post
However I do think that the fellow Italians still think that Italy will make it. Sadly it is pretty much Italian to react when it is almost too late, just look at the way Italy entered the Euro and that many think politics don't make an impact on their live. We had for so many years now a deeply corrupt, shadey sun king as PM, very capable to keep his power through all sorts of "manovre di palazzo", media power and money but utterly uncapable to work for the good of the nation and the common people. A PM able to sell failures with a false smile and big gestures, perhaps best seen in the earthquake of Aquila where he played the salesman with great acumen and but hardly bettered the live of the fellow countrymen hard hit.
There are many who are rooting for you guys.

The engineering & manufacturing business cluster which covers parts of northern Italy, Austria, Switzerland, and Southern Germany has always been interesting to watch. Aprilia, Rotax, BMW, Brembo, Bimota....Massimo Tamburini's work in particular embodies some of that particular/regional engineering sensibility IMO.

The people/culture/languages/food/geography were great and I never locked my doors when I lived in that region....

Quote:
Originally Posted by Firn View Post
So let us hope that Monti like Prodi before will do the right thing and won't get hindered to much by the "casta politica". I still remember my anger when Prodi got backstabbed by a small radical part of his fragile alliance, paving the way for Berlusconi once again. The gravitas of the situation should however (hopefully) keep such attempts in check.
Mr. Moniti's ascent to power is worrisome to me. Technically, he certainly appears to have the required skills for this crisis. Politically, he will have a challenging/diverse field (political class) to contend with (for how long and to what extent will the People of Liberty Party - among others - cooperate with him?) and forming political consensus rarely appears to be easy (technical grounds, deals, patronage, fear, jealously, love, etc). The biggest question in my mind, with this appointment, concerns adherence to a democratic process...

I have hope, we will see how it goes...
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Old 11-16-2011   #17
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Quote:
Originally Posted by Surferbeetle View Post
No risk, no reward.
There are many who are rooting for you guys.

The engineering & manufacturing business cluster which covers parts of northern Italy, Austria, Switzerland, and Southern Germany has always been interesting to watch. Aprilia, Rotax, BMW, Brembo, Bimota....Massimo Tamburini's work in particular embodies some of that particular/regional engineering sensibility IMO.

The people/culture/languages/food/geography were great and I never locked my doors when I lived in that region....
Thanks, hopefully the trust and the economy will be restored.

Northern Italy is really part of a powerful, central European cluster in terms of enterprises. As a person living and working as part of it, speaking Italian, German and some French you really appreciate the importances of the links crossing many borders. The north has attracted (at least) in the last fifty years a lot of internal immigration, which however in recent times has been dwarfed by the external one. From an economic point of view the latter has been incredibly important one, taking mostly jobs nobody else wanted to do. [From a military perspective, this is (sadly) similar. Due to the conditions and the pay Northern Italians are hard to find among the lower ranks of volunteer armed forces]

While I know the political discourse and reason behind decisions like the "patti territoriali", it has, like the poor support for many "mestieri", it has done little to attract the precious young labour force into the right geographical and business areas. Anyway the Italian strenght is also in it's creative and hard-working "Mittelstand", pretty similar to other regions in the big cluster.

Quote:
Mr. Moniti's ascent to power is worrisome to me. Technically, he certainly appears to have the required skills for this crisis. Politically, he will have a challenging/diverse field (political class) to contend with (for how long and to what extent will the People of Liberty Party - among others - cooperate with him?) and forming political consensus rarely appears to be easy (technical grounds, deals, patronage, fear, jealously, love, etc). The biggest question in my mind, with this appointment, concerns adherence to a democratic process...

I have hope, we will see how it goes...
Napolitano used his constitutional power IMHO wisely .You are of course right that he lacks the direct vote of the people, not such much as a vote of confidence but in form of a powerful party under his control. Berlusconi's government was surprisingly long-lived due to him holding many threads of power firmly in his hand, among them the biggest political party, "his" party, in which hardly anybody was ready to criticize him. Your biggest question, adherence to a democratic process might surprise the ordinary Italian, as it is pretty much a given that until we get election barter, trading, patronage, deals and so forth will make the palazzo an even busier place then usual.

It is of course an important question also for the Italian investor. Should he invest into Italian gov. bonds? Traditionally a lot of Italian money is owed to Italians, but it is of course not always wise to put alot of eggs in one basket.

Last edited by Firn; 11-16-2011 at 05:19 PM.
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Old 11-18-2011   #18
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Quote:
MOSCOW (AP) — Russia is facing a heightened risk of being drawn into conflicts at its borders that have the potential of turning nuclear, the nation's top military officer said Thursday.

Gen. Nikolai Makarov, chief of the General Staff of the Russian armed forces, cautioned over NATO's expansion eastward and warned that the risks of Russia being pulled into local conflicts have "risen sharply."

Makarov added, according to Russian news agencies, that "under certain conditions local and regional conflicts may develop into a full-scale war involving nuclear weapons."
http://start.toshiba.com/news/read.p....org%3E&ps=921
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Old 11-23-2011   #19
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Quote:
Russia warns it will deploy Iskander missile systems in the Kaliningrad and Krasnodar regions, and in the neighboring Belorussia if there is no agreement over the planned American missile defense shield in Europe between Russia and the US. A spokesman for Russia’s Defense Ministry told this to reporters in Moscow on Wednesday. He also announced that by the 1st of December Russia will raise Aerospace Defense Forces that will be able to effectively handle potential missile threats.
http://english.ruvr.ru/2011/11/23/60890065.html

Or as a more alarmist headline would read, "Russia’s top military commander has warned of nuclear war with NATO". http://www.zimbabwemetro.com/?p=30650
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Last edited by AdamG; 11-23-2011 at 03:36 PM.
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Old 11-23-2011   #20
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German Bond Auction Falls Short

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Germany failed to get bids for 35 percent of the 10-year bonds offered for sale today, propelling borrowing costs in Europe higher and the euro lower on concern the region’s debt crisis is driving away investors.

“This auction is nothing short of a disaster for Germany,” Mark Grant, a managing director at Southwest Securities Inc. in Fort Lauderdale, Florida, said by e-mail. “If the strongest nation in Europe has this kind of difficulty raising capital, one shudders concerning the upcoming auctions in other European nations.”
This is beyond contagion - the eurozone is becoming terra incognita for investors - people are terrified in the markets. The "core" should realize what Benjamin Franklin said - that the EZ will either hang together or most assuredly hang separately.
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