The Devil Wears Merkel

diavolo_veste_merkel.jpg

The last time there was a default in Italy was 3 September 1992 when the President of the Council, Amato went on TV and announced the devaluation of the lira. Devaluing the currency that you control and that is used to give a value to your public debt is equivalent to restructuring the debt in relation to foreign creditors. Italy’s devaluation was triggered by the fact that it couldn’t pay the interest on the public debt at the exchange rates fixed by the European Monetary System (EMS). Twenty one years later, Italy still has its hands tied, then it was the EMS, now it’s the Euro. Italy has to pay interest on the public debt amounting to 2,047 billion, and that amount is increasing. Just in the month of May, the debt increased by 32 billion and we’ll have to pay about 1.5 billion euro extra in interest for the year.
What’s happened in the past is useful to understand what’s going to happen in our country in the future. In the ten year period from 1982 to 1992, the debt/GDP ratio nearly doubled: it went up from 60% to 110%, and this happened because in 1981 the Treasury gained full autonomy (in what is referred to as a “divorce”) from the Bank of Italy. Since that moment, the State has not been able to count on an internal lender to borrow from and it has had to offer ever increasing interest rates to finance the debt. If in 1982 Italy paid real interest rates close to zero on its debt, in the ten year period that followed, that reached an average of 5.5% with spikes of 8%. It is thus the explosion of the interest on the accumulated debt that has taken the debt to unsustainable levels. An immense Ponzi-scheme where, in the absence of growth, the interest is paid by issuing new debt. As Alberto Bagnai says in his book "Tramonto dell’Euro“ {Sunset of the Euro}, basically, the result is a net transfer of national income from the provision of primary services to the tax payers (health, education, security) to those to whom the debt is owing, mainly Italian and foreign banks. But why is there this absurd divide? Because that’s what Europe is asking us to do , the Europe of the EMS that we joined in 1978 tying our hands and feet to a rigid and penalising exchange rate that obliged us to give up the possibility of using devaluation as a tool.

...

It would have been enough to insist on the equalization of the balance of trade rather than having a requirement to balance the budget, to have a completely different story that would have clipped the wings of Northern Europe’s mercantilism. Because Italian politics is bowing down to the will of Germany, what has become the priority is the protection of the debt (public or private) held abroad, and most of this debt is generated by the perverse mechanism of the Euro and the EMS. Italian politics has sold its soul to the Teutonic devil in exchange for its own survival but at the expense of the population that is suffering under the conditions of austerity and deflation that have been imposed on it.
If Italy doesn’t react, then the market will do so using its universal language: there’ll soon be a rise in the interest rates required to such a point that our debt will not be sustainable.

business education articles new education business opportunities finance education deposit money education making art loan education deposits make education your home good income education outcome issue medicine education drugs market education money trends self education roof repairing market education online secure education skin tools wedding education jewellery newspaper education for magazine geo education places business education design Car education and Jips production education business ladies education cosmetics sector sport education and fat burn vat education insurance price fitness education program furniture education at home which education insurance firms new education devoloping technology healthy education nutrition dress education up company education income insurance education and life dream education home create education new business individual education loan form cooking education ingredients which education firms is good choosing education most efficient business comment education on goods technology education business secret education of business company education redirects credits education in business guide education for business cheap education insurance tips selling education abroad protein education diets improve education your home security education importance

You could find these posts interesting:

We cannot die for Berlin
The public debt has to be restructured.
The debt from nothing

Posted by Beppe Grillo at 07:22 PM in | Comments (1) | Comments in Italian (translated) Post a comment | Sign up | Send to a friend | | GrilloNews | listen_it_it.gifListen |
View blog opinions
| | Condividi



Comments

Although the devil wears Merkel he is most comfortable as Berlusconi.

Posted by: Cures Riches | July 26, 2013 03:14 AM


Post a comment


Beppe Grillo's Blog is an open space for you to use so that we can come face to face directly. As your comment is published immediately, there's no time for filters to check it out. Thus the Blog's usefulness depends on your cooperation and it makes you the only ones responsible for the content and the resulting outcomes.

Information to be read before using Beppe Grillo's Blog

The following are not allowed:
1. messages without the email address of the sender
2. anonymous messages
3. advertising messages
4. messages containing offensive language
5. messages containing obscene language
6. messages with racist or sexist content
7. messages with content that constitutes a violation of Italian Law (incitement to commit a crime, to violence, libel etc.)

However, the owner of the Blog can delete messages at any moment and for any reason.
The owner of the Blog cannot be held responsible for any messages that may damage the rights of third parties Maximum comment length is 2,000 characters.
If you have any doubts read "How to use the blog".

Post a comment (English please!)


First name and Surname*:

Email Address*:
We remind you that anonymous messages (without real first name and surname) will be cancelled.
URL:


* Compulsory fields



Send to a friend

Send this message to *


Your Email Address *


Message (optional)


* Compulsory fields


Beppe Grillo Meetups

meetup.jpg
Groups 372 Members 76.596
Cities 281 Countries 10

Books and DVDs

grillorama

Check out the books and DVDs of Beppe Grillo (service in Italian)

Initiatives


Terra Reloaded DVD

Clean Up Parliament

Map of Power


Awards

Webby award
14th Annual Webby Awards Official Honoree Selections

Interviews


Tegenlicht - Beppe Grillo's Interview

"De toekomst van Europa volgens Beppe Grillo"

(Tegenlicht TV)

International Press Review

The New Yorker
"Beppe's Inferno"

Times
"The Comic Who Shook Italy"
(The video | Related post)

Forbes
"The Web Celeb 25"
(Related post)

BBC
"Meeting Italy's silenced satirist"

AlJazeera
People and power: "Beppe's Blog"

TIME magazine
TIME.com's First Annual Blog Index
(related post)