December 31, 2014

Greece - Italy: same face, same race, same monetary sovereignty

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After a third failed attempt to elect a new State President, Greece is now required to hold a general election on 25 January. The Greek share market responded by dropping 20% of its value in the past two weeks and the yield of their ten-year public bonds shot up to 10%, the highest level seen in the past two years.

Media terrorism
What better occasion for our regime media to serve up some terrorism “a la matriciana” against Italy’s exit from the Euro. After all, we too have to elect a new State President under conditions that are anything but simple. And here by us too, the spectre of elections is often bandied about opportunistically by highlighting the risk of an increase in the spread should the anti-Euro movements be successful. In essence, this is much the same plan that King George used to impose the Monti Technical Government’s austerity programme on us back in 2011 without holding any election. It remains incredible to think that the mainstream media here in Italy have gone from totally ignoring the Euro as the main cause of the Italians’ problems to now warning us about the impossibility and the cost of exiting the Euro. And what about what is involved? Shouldn’t we talk about the cost and what is involved in staying in the Euro? Are we now, after seven years of crisis, actually going to think about this Plan B? The very same establishment television newsmen that ignored the issue of the Euro in their sitting rooms from their lofty position of ignorance are now suddenly taking cues from any European geopolitical event to warn us about what the cost of exiting the Euro would be. That’s why they first totally avoided doing any detailed analysis of the Scottish referendum and then they jumped on the bandwagon of the Russian crisis in order to frighten the Italians (very soon they will note that the ’autonomy of the Russian Central Bank will allow Russia to come out of it stronger than before.)
Now it’s Greece’s turn to be used as the scarecrow according to the following theory: if the probable victory of Syriza, with his request for debt restructuring, has already led to serious instability in Greece, you can just imagine what would happen in the Euro-exit scenario pursued by the M5S via their request for a referendum.

Italy and Greece out of the Euro!
The reality is precisely that the Greek situation confirms the opportuneness of Italy exiting from the Euro. How can Tsipras even think of reviving his country while keeping the Euro? How does he think he is going to set interest rates in his country without first giving Greece back its monetary sovereignty? In 2015 Greece will have to come up with debt repayments amounting to some 15 billion Euro to private investors (mainly foreign banks). Tsipras is preparing to win the election based on a promise to repudiate the debt and the austerity programme but without getting out of the Euro. This is a contradiction, indeed it would be suicide. Repudiating the debt will not resolve Greece’s problems, the only way to make their problems more manageable would be to reinstate monetary sovereignty. That is why the markets have responded badly, because Tsipras’ ‘Euro confused’ recipe, so heralded by the Italian left-wing during the European election campaign, is the worst thing the country could hope for. Repudiating the debt without editing the Euro would mean souring the relationships with the country’s European partners without having any say in the matter and above all without having the monetary tools with which to actively manage the crisis.
Exiting the Euro is not an end in itself, but is merely a way to regain the monetary sovereignty that is essential in terms of reviving the economy. This is why the fears of capital flight and lack of liquidity from the BCE to our banks in the event of our exit from the Euro are unfounded. Italy’s exit from the Euro must be accompanied by three essential measures to prevent possible market chaos:
1. Abolition of the ‘separation’ between the Italian Central Bank and the Treasury.
2. Introduction of portfolio limits that specify a minimum amount of government bonds that must be held by our banks.
3. Restrictions on all capital outflow from the Country.

Single monetary sovereignty out the door.
With all due respect to Andreatta, who conceived the beginning of Italy’s suicide back in 1908 with the introduction of separation, the exit from the Euro will first of all put the neo-liberalist dogma of Central Bank independence up for discussion. Abolishing the separation will mean monetising the deficit, in other words enabling the Italian Central Bank, no longer independent but at the service of government’s economic policies, to print money and support public investments that support demand. A more or less coordinated exit backed by the aforesaid measures would make Italy totally impervious to external affairs. The liquidity currently supplied by the BCE would go to the Italian Central Bank and above all the latter would be responsible for monetising the deficit. The BCE is awaited at the door of quantitative easing by a hostile Germany, as hostile as all creditor countries generally are, waiting to see the BCE purchase peripheral public debt, seeing that 30% of the BCE’s capital is German. So the latest rumours about a compromise see QE being handled by National central banks with their respective governments standing surety in the event of insolvency. But what is the point of this? Once again we are allowing that which we just threw out the door to creep back in through the window. In 2012, right in the midst of the sovereign debt crisis and with our spread at almost 700, the BCE came up with the LTRO, very low interest loans to our banks, so as to enable the banks to buy up Long-term Government Bonds that the BCE and Italian Central Bank could not by in terms of the Charter. Now they want to come up with QE that is not actually QE because it would be brought in leaving each member country bearing the risk of insolvency without the risk being shared in any way. Once again, what is the point of this? Rather give us back our own Central Bank, our own seignorage and our own currency and we will know exactly how to get it through to our families and how to make our public debt sustainable. For our foreign creditors, devaluation of our new Lira and exiting from the Euro is equivalent to restructuring our debt, something that Tsipras refuses to understand.
Exiting the Euro and debt restructurings, there’s simply no other way.

Posted by Beppe Grillo at 12:46 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 28, 2014

Electrolux and the sleazy State


It seems that the Swedish manufacturer of white goods, Electrolux has asked to be allowed to cut staff salaries from 1,400 euro to 800 euro. If they’re not allowed to do that, they’ll transfer production to Poland or Hungary. After that, there was a statement saying the it’s a sacrifice of minor importance. Electrolux has 3,900 employees in four factories: Solaro, Forlì, Susegana and Porcia. Porcia is close to Pordenone, and it’ll be shut down anyway and the workforce of 1,200 will be sent home Immediately there was uproar from the trade unions, uproar about "employment blackmail", about "unacceptable behaviour", but also about the "dictatorship of the markets" and about "Europe the stepmother". Just crying crocodile tears. There are even those calling on the Government, calling on Zanonato and calling on Letta-the-Nephew. There has not yet been a petition to Napolitano, veteran of the “Terra dei Fuochi” {Land of Fires - in the provinces of Naples and Caserta} and a collection of signatures by the “radical chic” for the “Ius Electrolux”. It’s just a matter of time. Electrolux clears out and cuts wages and nobody wonders why. It’s the secret of Pulcinella and of Saccomanni, the one that passes his time inside a tunnel waiting for the light to arrive. Italy has some of the lowest wages in Europe and the highest cost of labour. That’s not a contradiction.. Nearly everything gets lost on the way like a leaking pipe. Between the company and the workforce there’s the sleaze: the State. A company is paying out about 2 and a half times the real wage: 1.5 to the State and 1 to the worker whether they work in an office or on the shop floor. To pay out 1,400 net, Electrolux has to fork out about 3,500. Thus at a time of difficulty, it would be right for the State to do without some of its generous and unjustified income and not let the worker do without. It would be an equally good idea if the State didn’t take everything from the companies and the workers via iniquitous taxation and immediately started to cut it, so as to give oxygen to the real economy. Why would a foreign company want to come to Italy or stay here? To pay taxes to a State that squanders most of its income of 800 billion a year? If the cost of labour is lower elsewhere, companies will go to Poland, Ireland, Romania, Spain and even to Germany. Nearly everywhere in Europe the cost of labour and taxes are lower, the bureaucracy isn’t strangling people like it is in Italy, the justice system works better (in Italy there are 9 million unresolved trials) and the service industries really work, including those providing digital facilities, not just in government adverts. Electrolux should cut the wage bill going to the State, not to the workers.

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Posted by Beppe Grillo at 06:35 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 24, 2014

Italy forty-ninth economy of the world


Italy was once the fifth economic power in the world. Some malicious people said it came sixth and they put Great Britain in fifth place. That was a long time ago. In 2014 we are invited to the meetings of the major economic powers just as they would invite the impoverished nobleman, the poor relation with tatty clothes and smelly breath. Right now, in Davos, there’s the annual World Economic forum, and one of the official documents is the list of the top 10 most competitive European economies. In order, they are: Switzerland, Finland, Germany, Sweden, the Netherlands, the United Kingdom, Norway, Denmark, Austria and Belgium. Italy’s not there, but you already suspected that. Italy is to be found in position 49 coming below countries like Mauritius, Panama, Malta and Bahrain. In the chart given in the annual report called "The Global Competitiveness Index 2013-2014", out of the 140 countries, we are still in the first column, but towards the bottom of it. The parameters used include technological development, the efficiency of the institutions, education, the labour market, innovation, and the financial situation. We are sliding down to the bottom of the rankings, like an award-winning football team at risk of dropping into the B Series with the indifference that is fruit of past glories. Italy now has to reflect on what it’s doing. By now, it’s a country that is economically on the margin and it has a political class that has no interest in doing anything about the country’s structural problems, but so much interest in hanging onto the armchairs of power. The world is forging ahead with the impressive speed in the development of technologies and innovation and yet the parties have spent the whole of 2013 discussing the IMU property tax and the fall of a well known criminal who will be placed under house arrest or subjected to a community service order, all in good time, in April, almost a year after his conviction. The parties believe themselves to be the centre of the world and yet they are just locusts devouring what is left of the country, and meanwhile our collapse has become structural and congenital. The recovery of our economy, positively tackling concrete issues, cutting bureaucracy, developing the digital economy, the computerisation of the State - are these obscure issues that are less important than Renzi on a bicycle or Fassina-chi {Fassina - who’s that?)? And meanwhile Italy is falling lower and lower as though it were a dead body.

PS As regards an online poll with multiple choices that was carried out on the blog, that possibility was picked up during security checks and thus it did not have an influence on the results. Note that anyone who wilfully makes false statements or who acts in such a way as to distort voting results could face legal action.

Take part in the opinion poll about Italy’s economic decline. You can have multiple choices:

Look at the results

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Italy upside down
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Posted by Beppe Grillo at 08:15 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 21, 2014

This is the land of the sun


"Photovoltaics: Italy has been investing for years And then it throws it all away. There were great results from 2005 to 2012, but the sector has been abandoned at one step away from maturity: that’s how they are rewarding speculation at the expense of policies leading to employment and longer term thinking.
Let’s imagine that I’m a dad and I want to teach my son a trade: carpentry, for example. I give him financial support. I help him buy the equipment and I commission him to do some pieces of work for our house so that he can get the practice. The lad works well and learns fast. In a short time, he’s creating great pieces of furniture at very competitive prices. He’s ready to register as a self employed tradesman and work for himself. At that very point I say: “That’s it! You’ve done too much. Give up. Clear out your workshop and find yourself a job. You’re not having any more support from me.”
This is what Italy has done with the photovoltaics sector, and with the people and the companies that have invested in it.


In 2013, a photovoltaic system cost 70 – 90% less than it did in 2005. In other words, the incentivisation policy worked. The sector got stronger. It came to maturity and became semi-autonomous, and it was nearly able to do without public funding. Nearly.
Today, in order to continue to support this sector it would cost very little, a tiny amount compared to what was needed in 2005. In fact it’s possible to say that just the associated economic benefits (income coming from the sales tax and other taxes, number of jobs, environmental benefits, reduction in energy costs) cover most of the costs of incentivisation. But, instead, as of 6 July 2013, the only incentivisation relating to photovoltaics (and this is very well remunerated) is for private households. This involves a tax deduction amounting to 50% of spending: and this is in line with many types of building restructuring or extraordinary maintenance. However, there’s no incentive at all if the very same structure is erected on the roof of a parish priest’s house or on a factory or a sports centre or any other structure. The other countries, (notably Japan) are thankful for the massive efforts. Now that the photovoltaics are so cheap there are incentivation programmes all over the world.
And the jobs created in recent years? The year 2010 saw the installation of new systems with an output of about 7-8 GW; whereas in 2013, any new systems will be producing about a tenth of that output. When you think of the drastic reduction in price, it’s estimated that more than 90% of the people working in the sector have had to find a new job or find an extra activity to keep the money flowing in. This is confirmed by my own personal experience. In 2010 I had eight people working on photovoltaics. In 2013 I just had one person working part-time, while the State was paying redundancy money to another 3 people who haven’t yet managed to find another job (that’s a further cost on society that swallows up any presumed saving made by eliminating the incentives). Nearly all the companies that were operating in this sector have disappeared or they have been drastically downsized. That’s a waste of time, of energy and of money.
Sure, if instead of investing in my company, I too, had created a little “photovoltaic power station” at the very time when the incentives were very high, then I would have a guaranteed income now. Instead I chose to invest in the long term, to invest in the company, as I was convinced that this was the sector of tomorrow, the sector that we would all need. And I’m still convinced it is. And I’m waiting for Italy to invest in the "smart grid" and for it to rediscover the potential of the renewable energy that we’ve always had: the sun." Valerio Morellato - Morellato Energia SAS

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Posted by Beppe Grillo at 06:28 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 02, 2014

Germany's Monte dei Paschi


The palaver about the Monte dei Paschi di Siena has the typical setting of a classical Italian problem: managerial incompetence that is amplified by political voraciousness and incompetence.
The Siena blight has exploded in the last few days. In the shareholders meeting, the MPS Foundation with a 30% share, represented the majority of shareholders. Thanks to that situation, it has postponed until June, the January capital increase from three billion euro as proposed by the management with guarantees from a consortium of banks.
The six month postponement will have a series of consequences. It’s a good idea to know what they are so as to avoid the usual Italian-style wait-and-see policy that is the harbinger of disasters. This postponement means a postponement of the reimbursement of the three billion euro of the "Monti bonds" from the State. By shifting the date to June, there’s the risk that the increase will not happen if, after the European elections, the market conditions are less favourable than current conditions. This is something that is quite probable because with the forthcoming "stress test“ that will allow the ECB to test the risk of banks in Europe as a precursor to having a Banking Union, it’s likely that many banks will increase their capital. Thus MPS will find it’s in a period when everyone is increasing their capital.
At that time in the future, the difficulties of getting private capital could shift the problem onto the Italian State with the likelihood of the bank being nationalised. That hypothesis in itself is a positive one. However, that scenario could still be painful. Nationalisation happening slap bang in the middle of the creation of the Banking Union and the new discipline surrounding a bail-in would mean it’s likely that bondholders and depositors would have losses before the intervention of the State. Basically, it would always be the fall-guy “Pantalone” who has to pay.
The Foundation has justified its choice by saying that there’s the risk that the increase would be financed by private foreign investors. That’s possible. But it’s likely that the only true alternative to nationalisation is to allow MPS to be taken over by a foreign bank. That’s an even greater risk. The moral to this story is that MPS will become a sacrificial lamb as requested of Italy by Germany to provide an example to the markets as a prey at knock-down prices for one of its own banks, or in line with the "Cypriot" way of saving the money of its depositors and bondholders.
Draghi’s "secret“ letter to Almunia (made public a few weeks ago) has been of no use. Draghi asked for the non-application of the forthcoming bail-in for the banks in difficulty at the expense of current-account holders and bondholders. As always, Germany is going ahead in its own way. MPS can no longer wait. It has to be nationalised without losing any more time. This will guarantee the value of the State’s loan and the value of the bank’s investments and deposits. June could be too late or it could be a big joke for the depositors called to save the bank destroyed by the parties. By the way, what’s happening with the investigations into MPS, nothing has been heard ...

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Posted by Beppe Grillo at 06:53 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 29, 2013

Speculators never die


>>> Beppe Grillo’s end of year message for 2013 will be broadcast on the blog at 8.30 pm (Italian time) on Tuesday 31 December. Don’t miss it! Sign up to the event on Facebook and invite your friends and relatives. <<<<<<<<<<<<

Values have shrunken to fantastic levels; taxes have risen; our ability to pay has fallen; government of all kinds is faced by serious curtailment of income; the means of exchange are frozen in the currents of trade; the withered leaves of industrial enterprise lie on every side; farmers find no markets for their produce; the savings of many years in thousands of families are gone. More important, a host of unemployed citizens face the grim problem of existence, and an equally great number toil with little return. Only a foolish optimist can deny the dark realities of the moment.
Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. This is because the rulers of the exchange of mankind’s goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish. The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.
Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits.
Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit. There must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.
Restoration calls, however, not for changes in ethics alone. Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. It can be accomplished in part by direct recruiting by the Government itself, treating the task as we would treat the emergency of a war, but at the same time, through this employment, accomplishing greatly needed projects to stimulate and reorganize the use of our natural resources. It can be helped by reducing taxes. It can be helped by the unifying of relief activities which today are often scattered, uneconomical, and unequal. It can be helped by national planning for and supervision of all forms of transportation and of communications and other utilities which have a definitely public character. There are many ways in which it can be helped, but it can never be helped merely by talking about it. We must act and act quickly.
Our international trade relations, though vastly important, are in point of time and necessity secondary to the establishment of a sound national economy.
Finally, in our progress toward a resumption of work we require two safeguards against a return of the evils of the old order; there must be a strict supervision of all banking and credits and investments; there must be an end to speculation with other people’s money, and there must be provision for an adequate but sound currency.


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Posted by Beppe Grillo at 05:54 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 26, 2013

Google tax, government by incompetent people


"The Italian Senate has now passed the “Google Tax” and Italian lawmakers really do seem to be entirely blind to the fact that this law is illegal under European Union rules that cover trade and the establishment of companies. But what’s worse than this is that even if the law were in fact legal it wouldn’t in fact achieve what the proposers are saying that it would. Here’s Bloomberg: "Italy’s Parliament today passed a new measure on web advertising, the so-called “Google tax,” which will require Italian companies to purchase their Internet ads from locally registered companies, instead of from units based in havens such as Ireland, Luxembourg and Bermuda. The tax has stirred controversy, with some lawyers saying it probably violates European Union laws regarding non-discrimination over commercial activity and could be subject to legal challenges.
Yes, that is, clearly and obviously, illegal under EU laws. You’re just not allowed to discriminate, in law, among people based in different EU countries. So much so that, for example, when the British government wanted to make an order for some new trains it could not favour the UK based company over a German bid. If you’re not allowed to have national preference in government acquisition then obviously you’re not allowed to tell private companies that they must follow some form of national preference. Italy’s measure is “fairly obviously contrary to EU law,” said Sol Picciotto, an emeritus professor of law at Lancaster University in the U.K. Sol Picciotto is one of the campaigners associated with the Tax Justice Network. This Google and Facebook selling from Ireland thing is one of the matters that they complain about bitterly. And if they say that this potential solution is illegal then I think we can take it as being true that it is illegal.
And I have been making this point for some time now. And it’s not as if people in Italy haven’t grasped the point. Beppe Grillo got it immediately. We even know that Francesco Boccia, the proponent of this tax, knows about it. For we’ve even got his response to my having pointed it out. And the way this European system works is that European Union law is superior to national law. It doesn’t matter what the Italian Deputies, or Senators, nor even the President or Prime Minister, say about what the law should be in Italy, if it breaches EU law then it doesn’t stand.
What’s worse than the law being illegal is that even if it were not illegal it still wouldn’t do what its proponents want it to do. For what it says is that Italian advertisers must purchase their internet advertising from a company with an Italian VAT registration. OK: but the problem with this is that this does not then mean that Google’s profits would be taxable in Italy. For the Italian double taxation treaties state, explicitly, that selling through an agent does not create a permanent establishment. And without a permanent establishment in Italy then Google’s profits derived from trading in Italy are not taxable in Italy. So, Google appoints an agent, an agent with an Italian VAT number, and the law is met and still none of Google’s profits from Italy are taxable in Italy.
The Google Tax is actually worse than being an illegal law. It’s an incompetent one.Tim Worstall in Forbes

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Posted by Beppe Grillo at 02:09 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 22, 2013

Italy’s striptease


In Europe, Italy is playing the part of the “young lady" who was threatened by Totò and thus removed one item of clothing after another, while all the time pretending to refuse. "Now take off your blouse", "'my blouse - no no no no“, until in the end she had stripped to her underwear.
The future of the European Banking Union is being decided right now between Brussels and Frankfurt. Another piece of national sovereignty has abandoned us without the consent of the Italian people. By now, in what way do Italian people count?
The Euro has taken away our monetary sovereignty. The Banking Union will take away our banking sovereignty, the primary function of the bank, to provide protection for savings. And that’s a sacred right engraved in article 47 of our Constitution: “The Republic encourages and safeguards savings in all forms; it disciplines, coordinates and controls the exercise of credit.“ ... But at this point, what’s the value of the Constitution?
Our economy is being throttled by the tiny amounts of liquidity coming through from a banking system that in turn is being throttled by 140 billion euro of doubtful debts and by an ECB that is ever more threatening with the 2014 "stress tests" on bank balances and for the first time ever, they’re going to include the risk of State Bonds. In order to get through this test, the Italian banks will have to claw back billions of euro of new liquidity in the market.
At the start, the Banking Union had two positive objectives. It has done the opposite. The Union was to recapitalise the banks in difficulty to save them from collapse and to break the perverse connection between the banks and the State since the Public Debt was being shown on the balance sheets of the banks and the risk was being shared at an EU level. And, as it happens, the Italian banks are overflowing with more than 400 billion of our shares.
After two years of debating, the winner is still Germany. In fact, Mrs Merkel just wants to place time and obstacles between the collapse of a bank in Europe and the risk that the Germans have to pay the price. The list of German victories agreed to in last week’s Summit in Brussels is very long.
There’ll be a common European fund for the recapitalization of banks in crisis that will be created with contributions from the banks themselves. However... That contribution will only start in 2016 and it will end in 2026. By the end of this period, the piggy bank that the bank will have put together to provide protection for themselves will be just 55 billion euro. That’s less than 1% of the total on the balance sheets of the banks that are involved.


We will be worse off than before and we’ll be obliged to resolve the problems at home, using our own savings. So why should we deprive ourselves of the right to regulate and provide facilitation for the national banking system without receiving anything in exchange?
The moral of all this is that with 400 billion euro of BTPs {Treasury Bonds} being held by our banks, if the “spread” were to take off again, and there are all the pre-conditions for that to happen, this Banking Union will do nothing to stop the crisis hitting our banks with potential losses and banking collapses that we will have to sort out from taxes paid and from the savings of the nation. Long live Europe, that Europe that doesn’t exist.


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Posted by Beppe Grillo at 09:33 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 12, 2013

The government is not interested in SMEs


“An amendment put forward by the M5S to the Decree relating to the Guarantee Fund for small and medium sized companies (SMEs) states that it is possible for voluntary donations to be made to help micro enterprises. The measure meant that, within ninety days of the day when the decree was converted into law, the Ministry of Economics and Finance had to issue an activation decree to define the role played by the institutions, the associations, the companies and the individual citizens. Ninety days have gone by, but the Ministry of Economics and Finance, that takes no interest in the financial difficulties of the small and medium sized companies, has not yet done anything. This Guarantee Fund represents the main national mechanism supporting access to credit for Italian SMEs. The mechanism provides important leverage that can create a multiplier effect for the resources available. For each euro provided by the Fund, that can have an effect of from ten to twenty euros. Any additional resource added to the Fund, can be an important way of giving a breath of life to the system of production. For the first time in Italy, the M5S has decided to take decisive action and not the usual chitter chatter. If we had been able to take the value of our first restitution (amounting to 1,569,951 euro) and pay that into the Fund, we would have been able to provide an amount of between 15 to 30 million euro. By the second restitution day, the M5S was still waiting for this activation decree. Now, 8 days have gone by since the second restitution day and the M5Ss ha still not had the possibility of paying the excess into this Fund. Anyone wanting further information should refer to fondidigaranzia.itBarbara Lezzi, M5S in the Senate

PS: Carlo Sgandurra is not representing the M5S in the public debate at the Italian Cultural Institute on the topic of communication. The M5S communications group in the Lower House and the Senate has received no request related to this.

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Posted by Beppe Grillo at 06:55 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 10, 2013

Italy’s collapse in 2014


It’s an incontrovertible fact that Europe is travelling at two speeds and the PIGs - the countries of Southern Europe are in difficulty and should get sorted out with a common policy that is not subservient to Germany. Exports from the PIGs has been slowed down by the value of the Euro. This is a situation that is becoming unsustainable. It’s time to consider having a two-speed Euro and to start to have discussions with all the PIGS countries to come up with a united position in relation to the EU.

"Italy risks to collapse in 2014 ", interview with Ambrose Evans Pritchard of The Daily Telegraph, by Alessandro Bianchi of l'Antidiplomatico.

Alessandro Bianchi: On the Telegraph, you have often written that southern European countries should form a cartel and speak with one voice in the board of the ECB and the various summit in order to force that policy change necessary to revitalize their economies. Do you believe the euro system can still save itself or do you think it would be better for a country like Italy to return to its national currency?
Pritchard: What we need in Europe today is an economic shock on the model of Abenomics [a series of macroeconomic initiatives carried out in 2013 to bring Japan out of a decade-long economic drepression, - editor]. Italy, Spain, Greece and Portugal, along with France must stop pretending not to have a common interest to protect. These countries have the necessary votes to force a change. The ECB today is not complying with its obligations under the treaties and not just for the 2% target , given that treaties are not talking only about inflation, but also for growth and employment. The figure of 0.8 % in October is a real disaster for the performance of the trajectory of long-term debt . Without a stronger change in strategy, Italy will collapse in 2014. The country has a primary surplus of 2.5 % of GDP and yet its debt continues to increase. The drama of Italy is not moral , but it depends on the deflationary crisis, which is forced by his participation in the euro zone. Politics is about choices and courage. Till now no action has been taken to prevent the dissolving of the political consensus of the euro in Germany. But today there is a greater threat and if Berlin does not accept the new policies, it can also leave the system. The return of Spain, Italy and France to a weak currency is just what the latin countries need. Moreover, the German threat is a bluff , and the countries of southern Europe must expose him. The time of confrontation has arrived.
Alessandro Bianchi: The problem is that the current governments of Southern Europe seem hypnotized by the spell of "more Europe" and do not consider other solutions. Why does this happen?
Pritchard: I recently had the opportunity to meet in London Italian Prime Minister Enrico Letta, and we just talked about this. To my question about the reason why he would not be promoter of a cartel with other European countries in trouble to force this change, the Italian Prime Minister told me that according to him it will be Angela Merkel to change its attitude in the next mandate and meet the needs of south. It is an utterly disappointing approach. Enrico Letta, as well as Hollande in France, is a fervent believer of the project of European integration and cannot accept that the current situation is a complete disaster. This attitude doesn’t enable him to understand the reasons why the euro has become so dysfunctional for the member countries.
Alessandro Bianchi: Those who argue that southern European countries cannot return to their national currencies use two reasons in particular: the huge inflation resulting in the inevitable devaluation and then the inability to withstand the competition of commercial giants such as China. Do you think they are right?
Pritchard: It is, in both cases, the exact opposite of reality. The euro is a real curse for exports, which depend on the prices and the exchange rate . European countries, overvalued because of the single currency, have lost a significant portion of their global market at the expense of China. With that Beijing keeps the yuan undervalued and with a vastly overvalued currency, many areas where the Italian industry excel are inevitably in crisis. A crisis that depends on the exchange rate. Regarding inflation, if Italy were to proceed to a chaotic and disorderly collapse of the euro, the country could lose in the first phase, the control of prices. But today the latter are already out of control. In southern European countries there is an ongoing crisis of deflation that threatens to revive the " lost decade " of Japan with startling shapes for that regards the performance of debt / GDP ratio. In Italy that increased from 120 % to 133 % in two years: it is a trap that is leading the country to collapse. The problem today is to fight deflation and not inflation . Current experience of Italy and the other euro-zone countries is well known in Britain. In our country there have been two examples of similar crisis of deflation and internal devaluation : in the early '30s with the system of the Gold Standard and the EMS crisis of 1991-1992 . In both cases , the United Kingdom has led to the breakdown of the system and restored full control of its currency at a time when the country's interests were put at risk. Critics at the time used the same argument of inflation, but in 1931 at the exit from the Gold Standard, in a situation of domestic deflation , there was no uncontrolled increase in prices, with the monetary stimulus and devaluation that have been the prerequisite for the recovery from the Great Depression. The exact same experience we lived in 1992 with the EMS crisis . We often tend to have a superficial approach to economic issues and this does not help the political debate. If you were to leave the euro, Italy should opt for a large monetary stimulus from the Bank of Italy, a devaluation and a tight fiscal policy. This combination would ensure a smooth transition in the country and no crisis out of control.
Alessandro Bianchi: Very often those who consider the unsustainable return to national currencies are also afraid of the unsustainability of being able to withstand the inevitable economic retaliation of Germany. Is it a credible threat?
Pritchard: There is nothing more far from the truth. Is in Germany's interest to manage the exit of a member country in the most linear, smooth and quiet as possible way . In the case of a depreciation out of control of the Lira, for example , the biggest loser would Berlin: German banks and insurance companies that have huge investments in Italy would be at failure risk , and in addition German industries could no longer compete with the Italian ones on global markets. It would be primordial interest of the Bundesbank to acquire on international currency markets the lire, francs , pesos or drachmas to prevent a collapse . It is a very important point to understand : in case one of the southern countries were to decide to leave the system in isolation , it is in the interest of economic countries of northern Europe , primarily Germany, to prevent its currency to be out of control and ensure a smooth transition. All the stories of terror on any disasters that we read have no economic base.
Alessandro Bianchi: In several of his recent articles, you declare as the push for change will come from France. What will be practically the element that will determine it?
Pritchard: With unemployment growing to uncontrollable levels, Hollande, who has set employment as his presidency primary goal, has lost all credibility and is reaching the breaking point with Europe. What is happening today in France is an exact repetition of the factors that the country has experienced from 1934 to 1936, when with the Gold Standard country was in a state of deflation, mass unemployment and had no resources to re-start. Data have come to an unsustainable level during t Laval presidency in 1935 and has resulted in a revolutionary political change in 1936: the victory of the Popular Front. France is now in a situation similar to 1935, with economic data continuing to worsen from month to month, and a turn as that of 1936 is approaching. Just look at the power of the Protestants in Britain or the growing results of the National Front to understand it.
Alessandro Bianchi: - It will be Le Pen to impress this change?
Pritchard: The rise of the National Front is incredible, but I do not think that they will ever take power. What happens, however, will be just as revolutionary, as it will force the other parties, especially the Gaullists, to change their policy. The Le Pen program is clear: immediate exit from the euro - with the French Treasury proposing an agreement with German creditors, if they will not accept France shall return the same to the franc and the main losses will be for Germany - and then referendum on the EU on the English model. These are topics that meet the sympathy of a growing number of people across the board and other parties can no longer ignore them. The National Front is forcing the other parties to change their agenda and realize that they cannot just have the same opinion of Berlin and Brussels.
Alessandro Bianchi: - In many countries we are witnessing the merger of conservative and socialist parties defending the austerity of Brussels and being against the voting intentions of the electorate. The vote of the national parliaments on the laws of stability now no longer matters and governments expect only the approval of the Commission. Finally, countries are indebting themselves to finance inter-governmental organizations such as the ESM, who will take key decisions for the lives of people in the coming years and inside having no transparency mechanisms and democratic control. But what is becoming the European Union?
Pritchard: The difficulty today is to understand why the creation of the various instruments of federal cohesion decided by the EU have created a so dysfunctional system. The fundamental problem is the lack of control of tax and spending by a democratically elected parliament . It is no coincidence that the English Civil War began in 1640 when the king tried to remove these powers to the Parliament or the American Revolution broke out when this power has been removed from London to states such as Virginia and Massachusetts , who exercised by time . These are Anglo-Saxon examples, but there are many others of how the foundations of democracy reside in the control of the budget and taxes by a government elected by the people . What is happening to the EU , on the contrary , the attempt to give the management of these to supranational entities and structures , which have no basis with no Parliament. It’s extremely dangerous and clearly anti-democratic. The argument that is often used in its defense is that it is a first undemocratic step, needed to complete the federation following the U.S. model . The American system would be the logical model to be imitated , but it is not feasible : there is no political consensus among European citizens and for the U.S. , there were systems , institutions and traditions completely different. François Heisbourg in his most recent book focuses perfectly this point : you can ot create a political union with the goal of saving the euro. It 's ridiculous . The federation should be subject to the great ideals that shape a society and not to save a coin. Countries must return to the social reality as soon as possible and not have to think about financial engineering instruments to make something work that cannot work.
Alessandro Bianchi: The referendum wanted by Cameron to renegotiate the participation of the United Kingdom to the EU finds favor with a growing number of countries, especially in northern Europe. What do you expect from this English vote?
Pritchard: The first reaction in Europe when Cameron launched the referendum was to define the Brit " stupid suicides." The argument was that London would lose the market and it would be resigned to the economic decline. These are ridiculous arguments . People who have still well understood how the European Union function, such as those with which I was confronted at the Ambrosetti Conference in Como in September, know that the exit of the UK would be a disaster, but not for London, for the EU . The European project is based on three legs , one of which is Great Britain , Holland and the Scandinavian countries . And without one of these , the EU is over, because the internal chemistry would change and it would be particularly difficult, especially for France to maintain the subtle balance with Germany. The British decision is a huge warning in Brussels : the integration has gone too far beyond the will of the people and the people want some powers back . The European Constitution was rejected by a referendum in France and the Netherlands. The treaties were not put to the recent judgment of the people , except in Ireland, but forcing her to vote until acceptance . This stage who proceed without public involvement is over. This kind of arrogance is over.
Alessandro Bianchi: In may of next year there will be elections for the European Parliament, a key test for political parties and movements skeptical towards Brussels. Will EU ever be the same?
Pritchard: As an economics scholar I find difficult to answer it. I can say that today the greatest danger for the countries of Southern Europe is called deflationary crisis, which could soon turn into an economic depression able to make out of control the trajectory of debt / GDP ratio . It 's a potential disaster . In this context , politics must set the goal of the return of a number of sovereign powers delegated to Brussels and the European elections next may will be a potentially momentous event: the skeptical parties of the institutional architecture could be first in a number of countries - the UKIP in Britain , the National Front in France, the Five Star Movement in Italy, SYRIZA in Greece and in other countries - and it will be a chance for people to express their annoyance and frustration against the choices from Brussels. An important political block will destroy this "artificial myth" that is built : the EU will never be the same and will be forced to be less ambitious and understand that many of its prerogatives must return to the national states. The governments of Italy , Spain, France should take back full control of the lives of their citizens and not think about enlargement to Ukraine or Turkey . This is the last battle.


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November 07, 2013

The chains of debt - Piero Ricca interviewing Francesco Gesualdi


"In the name of debt, our rights are being destroyed. But is it really true that we have no other choice but to pay up and get poorer? The solution is for us all to start dealing with the public debt. We can insist on having a massive debate about the causes, the solutions and current outlooks. With new eyes. With the courage to put everything up for discussion starting with the legitimacy of the debt". Those are the thoughts of Francesco Gesualdi, an activist and a writer, one who organises campaigns around goods held in common, critical consumption, and sustainable development. He’s the founder of the Centro nuovo modello di sviluppo {Centre for a New Model of Development} and together with Alex Zanotelli he founded Rete Lilliput {Lilliput Network}. In the last few years he has focused his activity on debt, and that’s the topic of his recent book "Le catene del debito - e come possiamo spezzarle“{The chains of debt - and how we can break them} (published by Feltrinelli)." Piero Ricca

Piero Ricca: Francesco Gesualdi, national governments, European institutions and mainstream media are telling us that there’s no alternative to austerity. What do you think?

Francesco Gesualdi: Already the obligation to keep the deficit below 3% of GDP has meant that we have been subjected to ever increasing taxes and spending cuts with serious social repercussions. The figures show that we have a real rate of unemployment at 24% while the risk of poverty involves one person in three. But with the fiscal compact we’ll have a catastrophe, because taxes and cuts will have to increase until we have a balanced budget. Furthermore, the debt will have to be halved within a period of 20 years. That’ll be a fatal blow leading to the economic and social collapse and the total demolition of our common home. To the immense satisfaction of the international capital system and of the service multinationals that finally will be in a position to buy up public property at knock-down prices and then make a grab for lucrative utilities like water, rubbish collection, health care and education.

PR: In order to find an alternative, you maintain that the preliminary step is to carry out a demystification analysis of the debt. What do you mean by that?

FG: We need to clarify that we are not in debt because we have been living beyond our means but because of the high interest rates that have cost us 2,230 billion euro since 1980 to give tax privileges to the wealthy classes because of tax dodging amounting to 180 billion a year, because of corruption that is costing us 50 billion a year, because of the useless and harmful spending on things like the high speed train and the purchase of the F35 fighter jets. So the first step is to carry out a massive popular investigation to understand what part of the debt we really have to pay because it came about to bring an advantage to people and which part should be shunned or repudiated. Which part is it our right to shrug off because it was created to enrich the banks, to go to weapons enterprises and to go to the politicians thirsting for power? The investigation cannot be entrusted to the political class that has created this disaster. It can only be carried out by citizens formed into work groups. Examples of this type of activity are already happening in France, Spain, Belgium and even in Italy. In Parma a group of citizens has reconstructed the genesis of the 900 million euro debt that is burdening the city. Anyone who wants to start an analogous group in their own town can send a message to


PR: Do you think that the forthcoming election campaign for the European Parliament could be the moment to start to "break the chains of debt"?

FG: Yes definitely. As long as we understand that our enemies are not the German factory workers but the banks and anyone who wants to make a fortune out of the public debt.

PR: But with this political class, these parties and these power relationships between the worlds of finance, media and politics can you really believe it realistic that we’ll have a glimmer of change?

FG: This political class is disgusting, but it’s not unshiftable. We can send them home - but it needs a spark of participation. The state of apathy, of passivity, of obnubilation in which such a large proportion of the population exists, is the aspect that worries me the most. But with the commitment of those that have maintained the capacity for critical thinking, we can create an earthquake not only by starting anew with the political scene but also by transforming each and every one of us into promoters of counter-intelligence. This is why I’m inviting everyone to join with the campaign “Debito pubblico decido anch’io {public debt - I decide too}”.

Francesco Gesualdi’s book: "Le catene del debito. E come possiamo spezzarle {The chains of debt - and how we can break them}"

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October 31, 2013

Work less to earn more, by Serge Latouche


Figures published today about unemployment in Italy are devastating. In September the unemployment rate in Italy was 12.5%, that’s an increase of 1.6% compared to last year. Youth unemployment has gone up to 40.4%. People are increasingly losing motivation. The government, the parties, and the trade unions are not offering any response and they are not able to take action. The truth is that the economic and development model is in decline and the concept of work needs a complete rethink. The economist, Serge Latouche, explains how we have reached the peak of the crisis, and he takes away the cloak enveloping the false myth about productivity and he explains the route to take us to a new economy in the service of individuals and peoples.

“It’s a paradox to say that we are in a crisis. In 1972 there was an ecological crisis, and before that in May 1968 there was a cultural crisis, and young people today are still in this type of crisis. Then came the time of Thatcher and Ronald Regan, and a neo-liberal counter-revolution that brought us to this situation. We are in a social crisis and with the collapse of Lehman Brothers on 15 September 2008 we’ve been experiencing an economic crisis. All these crises get mixed up and give rise to a crisis of civilisation, the crisis of western civilisation. We are just at the beginning. The situation will get worse in the next few months and years.
Old Marx was right - not Karl, but Groucho Marx - when he said : “a child of 5 could understand this!". Sure! Our governments could do with a child of 5, because he would understand straight away that infinite growth is incompatible with a finite planet. A child understands that, but we don’t. In France, in 2007, our President got himself elected with this mantra: “work more to earn more". This slogan is completely stupid! It is in complete contradiction to elementary and economic logic. For all economists, the law that is sacred is the law of the market, of supply and demand, and thus if someone works harder they are increasing the supply of labour and, given that there’s not enough demand for labour, this causes the fall in the price of labour and that’s called wages or salaries. They’re not saying we have to earn more, but that we have to work more! The European Union is asking France to shift the pension age and the result is that wages are coming down all the time. On the other hand, they could say “work less to earn more” and in fact in many moments in history, that has been the case. In the 14th century, after "The Black Death”, there was a fall in the number of labourers and wages rose sharply. Today there are millions and millions of unemployed. We are living in a world (that some people have called Absurdistan“) in which millions of workers are working more and more and are going mad, and committing suicide, while millions of others aren’t working at all. Working less is one of the ways of resolving the unemployment situation, but it’s not the only way. Other ways are via ecological re-localisation and reconversion, but then straight away the economist will say “but how are you going to produce?” Today, the sacred word for the European Union is "productivity“ because our productivity is too low compared to competition from China. The child of 5 would say “We have to freeze competition from China”. Unfortunately we don’t have a child of 5 in the government. I will use a word that creates a scandal in Italy, but it’s a word we have to use because we are in a crisis. The word is "protectionism". We have to be protectionists in an intelligent way: we need social protectionism to allow everyone to work, ecological protectionism, to save the planet, even fiscal protectionism. To have competition, free trade is a form of protectionism, but it is the protectionism that is the most ferocious of predators. We have to protect the weak. We have to protect the people! Not the predators, the speculators, the financiers, the banks, but the people! And the poor entrepreneurs! Especially in Italy, where each week some entrepreneurs are killing themselves because they are strangled with debts and if they have an honest work ethic, they are strangled even more!
The crisis can be the moment of opportunity to develop an alternative project. As the left wing is set up now, there is no longer hope for it. I’ve always been a left wing person, but I think that only a grass roots movement can reinvent the world of politics. I think that there’s no salvation with these corrupt parties and that we don’t know whether the politics of tomorrow will have to be channelled through the parties.
What’s important is to have a sensory horizon and the sensory horizon has to go beyond the economy and bring in the spirit of giving." Serge Latouche

We’d like to thank Jaca Book for their collaboration. They are publishing Serge Latouche’s book called “Incontri di un «obiettore di coscienza»” (Encounters with a Conscientious Objector}

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October 29, 2013

Cleptocracy - Thieves of the Future - Elio Lannutti


“My name is Elio Lannutti, and I’m the President of Abusdef, the association that defends the people using the services of banks and financial institutions as well as anatocism, and rating agencies, in the battles against banks (banksters) and that phenomenon of the betrayal of savers that has emptied the pockets of the Italian people.
The Troika, made up of Mario Draghi’s European Central Bank (ECB) with Christine Lagarde’s International Monetary Fund (IMF) and Barroso’s European Union, is deciding the economic policies we need to be operating and strangling the people of Southern Europe in order to save the German banks! The sovereignty that is in the Italian Constitution no longer belongs to the people, but to these technocrats, these cleptocrats that have stolen the future from the younger generations. A few days ago a guy called Oli Rhen (a former footballer in Finland) came to Italy to dictate Europe’s economic agenda to Italy. That is, that we need to bring back the IMU property tax on the primary residence, to increase the IVA sales tax, that we must not even dream of touching financial yields and the great power of the bankers! Not everyone knows that the Italian Parliament not just now, but in the previous legislature, has voted for the ESM- European Stability Mechanism and for the fund to save the states. The public debt has increased and stands at 2,075 billion euro. That’s nearly 35 thousand euro for each of the 60 million inhabitants in Italy, including new born infants and it keeps on going up because we have given 94 billion euro to the fund to save the states and to the European Stability Mechanism to save German hegemony, monetary orthodoxy, and the German banks that had debts in Greece and in other weaker countries. I hope that things will start to change radically. Young people have to rebel. The hope of liberating Italy from wheeler-dealers and cliques is like the war of national liberation fought by our forefathers to force the German occupiers from Italian soil! At that time, they used tanks and heavy weaponry, today, they use the spread! Young people are leaving. They are emigrating to so many different countries not just in Europe, but also to countries beyond the oceans. I’ve published a book: "Cleptocrazia, ladri di futuro {Cleptocracy - thieves of the future}". The book talks about the bad behaviour and the crimes of the banks and of world finance and it ends with the verse by Bertold Brecht: “First they came for the gypsies, and I was happy because they steal. Then they came for the Jews, and I did not speak out because I did not like them. Then they came for the homosexuals and I felt relieved because they bothered me. Then they came for the communists, and I said nothing because I was not a communist. One day they came for me, and there was no one left to speak out for me."." Elio Lannutti

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Posted by Beppe Grillo at 07:39 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 27, 2013

Draghi, like the magician, mago Silvan


At first he pulled the LTRO rabbit out of his hat and then he produced two white OMT doves. In this way, Draghi has for the time being, won the two turns he’s had at the gaming table of the Euro. But the game is still not finished because sooner or later, the market will call his bluff. It’s these two magic tricks, the LTRO and the OMT, that for now are keeping Italy and its banks alive. For how much longer?
The first LTRO was announced in December 2011 followed by the second one in March 2012. The objective was to supply liquidity to our banks in exchange for guarantee taken to the ECB, given that the north European banks no longer trusted peripheral banks and no longer lent them money. In theory, this should have made it possible to finance the real economy: I, the ECB, am loaning you money in exchange for guarantees so that you can pass on the money in the form of loans to the SMEs and the families. In reality the real economy has seen very little of the 250 billion of LTRO money that the Italian banks got from Draghi. In fact they have reinvested nearly all that money in BTP that are giving a yield of 4.5% after having taken the ECB loan at an interest rate of 0.5%. That’s roughly 10 billion in profits each year for the Italian banks in exchange for allowing the State to place its debt. In fact more than half the annual profits of the Italian banking system come from this little game: the ECB loans money to you the commercial bank and you the commercial bank loan money to your State. And the results? In the last two years the value of loans to Italian companies and families has gone down by 70 billion euro and the value of BTP government bonds being held by the banks has gone up by 190 billion euro, and now stands at 411 billion euro (more than 10% of the total value of holdings in Italian banks).
Having discovered what game is being played out, the market returned to the attack in the summer of 2012, by putting pressure on our BTPs: the central bank is the only institution that can give guarantees to the market on the solvency of the states in those places where it is buying debt by printing currency. The statute of the ECB does not allow this. But Draghi went very close to the wire, by announcing the Outright Monetary Transactions (OMT) programme in the summer of 2012. When faced with resistance from Germany, Draghi announced that the ECB is prepared to buy public debt in secondary sovereign bond markets where the bonds are due for redemption in up to three years, for those countries that happen to find difficulty in finding someone to take on their debt. This happens in exchange for rigid intervention on the part of the Troika (the IMF, the European Commission and the ECB) that is imposing reform in exchange for this help. In August 2012, no one thought that such an announcement of intentions would be enough to placate the market. At that time, there was a discussion about whether Italy should act before Spain to take the opportunity to get OMT support. What’s happened in the last year tells us that Draghi has won and that for now, the market has placed its trust in the announcement without going calling the potential bluff, given that no peripheral state has had recourse to the OMT programme. Yes sure. It could be a matter of bluffing, because the German Constitutional Court has still not passed a resolution about the legitimacy of this programme. It’ll do that in December.
There’s nothing wrong in the fact that it is the central bank providing a guarantee for public debt. In fact, it is the right of a sovereign people and of its central bank to make use of all the tools of economic and monetary policy according to the phases of the economic cycle, including the power to "monetize“ the debt by printing money. That has always been done by the FED, the Bank of England (BoE) and the Bank of Japan (BoJ) but not by the ECB. Its statute does not allow it to buy public debt but, for now, by using a semi bluff, the OMT programme has succeeded in convincing the markets that this could be possible.
Two years later, we find we have a banking system that gets its liquidity from Draghi (and not from the other banks) and then uses this to buy in BTP (and not to spend in the real economy), thus creating a vicious cycle in which the state’s weakness has been transferred to the banks and only the announcement of the OMT, has, for the moment, kept the situation on its feet.


But the time that Draghi has managed to buy is not infinite: Merkel’s "gong" on the OMT programme will arrive sooner or later and that day will be the last round. On that day, the Italians will be left with nothing but their underwear. Perhaps not even that.

PS: Ciao Zuzzurro! With your death, even a part of my own history is disappearing. When performing as a comic was called "cabaret" and yet nobody yet knew what it was. Hugs to Gaspare and the family.

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Posted by Beppe Grillo at 07:15 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 25, 2013

Sons of the Troika - Piero Ricca interviewing professor Bruno Amoroso


>>> Today I’ll be in Trentino - South Tyrol in support of the M5S candidates putting themselves forward for the 27 October regional elections. Today 25 October, I’ll be in Bolzano, piazza Magnago, at 6:00pm. The live broadcast can be viewed on the blog and on LaCosa<<<<<<<<<<<<

The IMF has denied that it ever proposed taking money from the current accounts of European citizens, just admitting to having “discussions and experiences relating to the possibility of a one-off event of taking capital” as a method of tackling the debt. But the denial has not convinced the economist, professor Bruno Amoroso, who is emeritus professor at the University of Roskild in Denmark. He maintains that “The Troika is at work once more." “The ECB and the Commission are preparing loads of savings and the IMF is doing the same while working along parallel lines, concentrating on how to get the citizens to pay the ‘foreign debt ' of the States". Piero Ricca

Piero Ricca: Professor, the last few days have seen a discussion about the hypothesis, seen in an IMF report, of a one-off grab of money from current accounts on a European level. Does that strike you as credible? And in what context is this hypothesis situated?

Bruno Amoroso: The IMF’s hypothesis is part of the second phase of the strategy of expropriating the savings of the citizens, that started in the 1980 and 1990s and that saw its success in the United States and in the European Union with the financial money grabs of 2008-2010. A robbery that has delivered the loot into the hands of a small number of groups to a value of 37% of Europe’s GDP; that is State help provided between October 2008 and October 2011 that has benefited financial institutions by 4,500 billion euro, and 6,500 billion euro has been added to that. This has obviously caused the explosion of the ”sovereign debt” in many countries of the EU, estimated to be between 45 and 65 thousand billion euro. This robbery, defined by K. Galbraith as the “greatest financial crime in the history of capitalism” has movers and shakers who are known. It’s sufficient to read the text of the investigation carried out in the United States by the Financial Crisis Inquiry Commission (Financial Crisis Inquiry report, 2011) that discusses the mechanisms and the political collusion that has taken place. The report explains that all the laws brought in to legalise this robbery are in operation and the people responsible are in their positions and they are getting ready for the second round.


PR: Is it still possible to save the European integration project?

BA: I fear that it’s too late to restore trust between the citizens of Europe and the institutions. However, for those that believe that still to be possible, the Triad needs to be swept away and power needs to be given to the European Parliament so that it can be the expression of a European political government within the limits of the powers that it has. As regards the countries in the south of Europe that have been devastated by the crisis and by the ECB, there needs to be renegotiation of the functioning of the whole Euro-zone in such a way that there are two monetary areas with greater margins of flexibility and with a solidarity mechanism between the north and the south. The stumbling block is represented by Germany, the stumbling block that has brought down the Euro. Germany must either contribute to bringing back the ship to an upright position or we’d better abandon the ship before it’s too late. But I fear that it is already too late, and the first ones to abandon ship will be the Germans themselves.

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You could find these posts interesting:

The troika and new forms of fascism
They want 10% from our current accounts
Cyprus or Greece?

Posted by Beppe Grillo at 07:02 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 20, 2013

The troika and new forms of fascism


Image: Neofascists in Hungary

Alessandro Bianchi interviewing Yanis Varoufakis, professor of Economic Theory at the University of Athens

Alessandro Bianchi: Together with Professors Galbraith and Holland, you have updated in July your “Modest Proposal,” in which you indicated four programs of economic policy of absolute wisdom that could help Europe to find a way out from the current collapse. Programs, however, that European countries of the north, Germany in particular, have shown no intention to implement in any way. At the current state of things, don’t you believe that the best solution for southern European countries would be the exit from the single currency?
Yanis Varoufakis: "If we could turn the clock back, the best option would have been for the southern countries, plus Ireland, to have stayed out of the Eurozone. Undoubtedly, the behavior of the powers-that-be both in Northern and in Southern Europe has well and truly dispelled the fantasy, circa 2000, that the Eurozone would evolve into a federal entity, possibly after an existential crisis threatened its integrity. Put bluntly, our elites committed a cardinal sin by placing our Peripheral nations into a European version of the Gold Standard which, like the original Gold Standard, (1) occasioned massive capital inflows into the deficit regions that built up gigantic bubbles and (2) caused a permanent depression in the same deficit countries once the bubbles burst following our generation’s 1929 (2008, that is).
Having said all that, getting out of our hideous monetary union will not return us, even in the long run, to where we would have been had we stayed out of it in the first place. Once in, an escape may simply push our stuttering social economies off a tall cliff. Especially if it is does in an uncoordinated country-by-country basis. The reason why is dead simple: Unlike Argentina in 2002 or Britain in 1931, getting out of the Eurozone is not just a matter of severing a peg between our own currency and a foreign one. We just do not have a currency to unpeg. In other words, we would have to create a currency (a task that takes at least 8 to 10 months to complete) in order then to unpeg or devalue it. An 8 to 10 month of delay between announcing a devaluation and effecting it is sufficient to return our economies to the stone age.
Of course, none of this means that the European Periphery must suffer in silence the pains of an unsustainable, misanthropic Eurozone. Our governments can exercise their legal veto powers at the next European Union Summit or Eurogroup meeting. And demand that policies like the ones that we have proposed, in our Modest Proposal, are discussed seriously and given a chance to reconfigure the Eurozone in a manner that makes it sustainable.
Alessandro Bianchi: This week The Wall Street Journal published the (till now) undisclosed reports of the statements of members of the board during the meeting of 10 May 2010, which opened to the bailout of Greece. Many had predicted its unsustainability, that would only have allowed banks and private creditors to take back their investments and worsened the socio-economic situation of the country, without improving, moreover, the trend in debt / GDP ratio. Every prediction, indeed, came true. In the light of these revelations what do you think of the behavior of the troika in your country after three years of work?
Yanis Varoufakis: “It will go down in history as a notorious Unholy Alliance between Irrationality and Wickedness. Representatives of organisations which knew perfectly well that the policies they were imposing would fail by their own stated criteria carried out their ‘orders’ with no remorse, no rhyme or no reason and in a manner that brings to mind Hannah Arendt’s Banality of Evil. Their ulterior motive, hiding behind a rhetoric of ‘saving’ our countries, was none other than to shift losses from the accounting books of Deutsche Bank et al onto the shoulders of the weakest of Europe’s taxpayers (including those in Germany who are suffering a severe restraint in the real value of their wages).
Alessandro Bianchi: As in several other European countries, even in Greece we witness the union of socialist and conservative parties in the defence of an economic model that led society to the collapse. How do you judge the action of the Pasok of Mr.Venizelos and how much responsibility you would attribute to them for the current crisis?
Yanis Varoufakis: Social democratic parties made a pivotal choice in the mid-1990s: to throw their lot in with financialisation; to go into partnership with financial capital. At the time, it made sense to them. It had never been easy for social democrats to extract value from industrialists, from shop owners, from business people, from landowners for the purposes of funding the welfare state to which they were, indeed, committed. It was much easier instead to turn a blind eye to the bankers’ opaque shenanigans of the 1990s and 2000s (which, in any case, they never fully understood) and, in return, collect a small percentage of the mountains of financial rents the bankers made as a result – rents that they used to fund social programs (some of which were very worthy).
Tragically, in 2008 the banks went under and the mountains of financial surpluses turned into deep holes of losses. At that point, the bankers demanded that the state fills these gaping holes up with monies borrowed by the taxpayers. The social democrats were at a loss. They had long lost both the moral authority and the theoretical capacity to oppose the bankers and their arguments. Both as political organisations and as individual politicians they had sold their soul to a devil that was now injured and demanded in no uncertain terms that they, the social democrats, drop all other priorities and come to the aid of the hand that fed them and their cherished welfare state for a decade. So, they obliged the bankers. They bent to their will. Instead of demanding a default of public debt in Greece and a default on senior private debt in Ireland, the social democrats joined the conservatives to side with the bankers. To conspire in order to delay any defaults until most of the losses were transferred on the shoulders of the weakest of taxpayers.
In the process, the loyal members of the social democratic parties felt let down. They had joined up and struggled for years to effect a degree of income distribution from the have-nots to the haves. Suddenly they found that their own social democratic party was party to a terrible alliance that, in the name of ‘saving the country from bankruptcy’ effected the most brutal redistribution of income to benefit those whose preposterous acts had occasioned the crash. It did not take long for social democratic parties to be abandoned by the well-meaning, genuine social democrats and to be left in the filthy hands of the careerist, opportunists who turned these proud parties into their personal fiefdoms. Precisely the case of PASOK under Mr Venizelos.”
Alessandro Bianchi: The most credible opposition party that opposed to the administration under a commissioner of the troika in Greece today is Syriza. Do you think that it will ever come to the government? And what do you think of the “European agenda“ of Tsipras recently announced at the Kreisky Forum in Vienna?
Yanis Varoufakis: My fear is that Syriza’s win may come too late. That it will come after the bankers, in cahoots with the current government, have built a New Cleptocracy which, by the time Mr Tsipras in Prime Minister, will have become a state within a state. As for his recently announced European Agenda, I think it is a beacon in the current darkness that is Europe’s political landscape.
Alessandro Bianchi: The last point of your Modest Proposal 2.0 calls for the establishment of a program of social solidarity to ensure the existential minimum needs of all citizens and to prevent the current crisis to be pretext for the rise of totalitarianism. Do you believe it is possible the repetition of what happened in the 1930s? Do you think Greece’s situation is really that different from that of other southern European countries?
Yanis Varoufakis: Yes, we repeated the mistakes of the 1930s and we should, thus, not be surprised if, in the process, we are conjuring up the same kind of demons. Portugal and Spain may not have seen the rise of a Nazi party yet (thankfully). But then again, Portugal and Spain have not seen a 30% loss of national income – at least not yet. If the rot goes that far, I have no doubt that extremist nationalism will rear its ugly head there too. Meanwhile, far right, Nazi-leaning parties are rising in Denmark, in Holland, in Austria, in Scandinavia, in Hungary. Europe is toying with some very nasty ghosts which it nourishes and reinforces with ever act of denial of the nature of this Crisis. Alessandro Bianchi

Read "Modest Proposal" by Yanis Varoufakis
See a version of the original interview on Yanis Varoufakis’s blog.

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Cyprus or Greece?
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Posted by Beppe Grillo at 05:19 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

September 24, 2013

Telecom Italia - Italy is falling apart

Italy loses another bit: Telecom Italia. Telecommunications become Spanish. A disaster that was bound to happen given the continuous plunder of a company that was one of the most powerful, innovative and dynamic. And this plunder was planned and cynically put into action It was fundamental for the country’s policy of innovation. Years ago, I had seen this shameful end when the company was taken over by Telefonica. The death of Telecom Italia began in 1999 when D'Alema, who was then the President of the Council, had it taken over by the “Captains Courageous” and saddled with debts. D'Alema, the merchant banker of Palazzo Chigi, is the main one responsible for this catastrophe. A company without financial problems suddenly found it had more then 30 billion euro in debts.
Telecom owned companies, real estate, the best engineers and computer people, and the biggest fleet of company cars in the whole of Italy. It had wealth that had been built up using the taxes of generations of Italians.
Then came Marco Tronchetti Provera and the complete looting of the company with the closing down of strategic parts, the sacking of personnel, and the parcelling out of bits, and strategic plans worthy of a joke. Tronchetti resigned in 2006 leaving debts of 41 billion, apart from various types of debentures and securitization (IOUs to investors), inherited from Colaninno and Gnutti. However that’s not considering all the companies that were sold off. After that, Bernabè acted as the liquidator and all he could do was administer the last rites.
And now? Whoever has stolen the future from us has to answer to the nation for this act of destruction.


"I’m falling apart but it’s not my fault
now I’ve just got a big head
and a testicle for reproduction.
" The man who’s falling apart, Gaber

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Posted by Beppe Grillo at 08:45 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

September 05, 2013

Italian Competitiveness: Italy - not there


The publication of the ranking of the competitiveness of countries compiled each year by the World Economic Forum has bad news for Italy. In a year, we have dropped by seven notches, going from position 42 to position 49. In reality, in absolute terms we still have the same number of points (4.4 out of 7) but other countries have overtaken us. In the ranking, we are matched by Kazakhstan and the similarities are increasing. The ranking is the result of an average made up of 114 different values. Keeping us in this position is first of all the size of what is still left of being one of the top ten economies on the planet and the inheritance of a recent past as a well-to-do nation. We are sixth for “life expectancy” and 14th for the number of mobile phones, 18th for air flights, 28th for number of students, but 72nd for quality of the educational system.
Then there are two different universes: that of the companies, and that of the ambit of the State. There is no country where the difference between these two worlds is so massive. In the realm of entrepreneurship and innovation we are above average in nearly all factors: 14th for number of companies, 11th for competitiveness, 27th for sophistication of production processes and we even come overall second in relation to business clusters.
In the chapter dealing with institutions, Italy is below average in 20 out of 22 parameters. Why are we the only G7 country where there’s no growth? Perhaps because our judicial system is in 145th position? Or because there’s a lack of transparency in the public decision-making process, given that only 8 countries perform worse than us? Or perhaps it’s the burden of regulations that keep investors at a distance. Only 2 out of 148 countries are worse than us. As regards the public debt, only 4 are worse than us. And what about the effect of taxation on job creation? We come last out of 148 countries. With figures like these, any government, on the right, the left, in the centre, would think of just one thing: cutting taxes and public expenditure in a consistent and continuous way. Our government prefers to do the opposite." Marco Di Gregorio

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Posted by Beppe Grillo at 05:04 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

September 01, 2013

Italy upside down

zhang_dali.jpg Image by Zhang Dali

Italy’s GDP has fallen by -0.2% in the second quarter of 2013 as compared to -0.6% in the first quarter. It was enough to have a slowing down in the degrowth to hear the proclamation of a recovery coming from the Letta government with the promise of the end of the crisis that in fact is a long way off.
The top economists, including Fitoussi and Roubini, are warning that it’s unlikely that there’ll be recovery in Europe before the end of 2014 given that the current erroneous recipe of "austerity and taxation" has depressed real wages and consumption and until that’s redressed, it’s unrealistic to talk of recovery. The estimates of the International Monetary Fund indicate a mere +0.5% of GDP for Italy in 2014, but this today seems just a mirage. Moody’s has indicated that a return to pre-crisis levels in the Euro-zone will not happen before 2016-17 and only for certain non-peripheral countries, thus not us. The negative outlook confirmed by Moody’s for all the periphery of Europe implies a 33% probability of a further downgrade in the next few months. This would take Spain to junk status with inevitable implications of contagion for Italy that was downgraded by Standard & Poor's to BBB before the summer, one level above Spain and two levels above junk status.
The public debt has to maintain investment grade status as a measure of trustworthiness, in at least two out of three ratings agencies for it to be included in the main world indices, thus in order to sell public bonds. The statutes of investment funds prevent them from buying public debt that is not included in the indices.
What would happen to the spread and to our taxes, if we were to become "junk" with the resulting "obligation to sell" by large foreign investors? Default. Draghi’s monetary policy is a necessary condition but it is not sufficient to guarantee the sustainability of our debt and to provide growth. In fact, for the last two months, real interest rates have been increasing pushed up by the change in the FED‘s monetary policy. The yield on American 10 year bonds has gone from 2% to 2.7% in recent weeks, and in parallel with that, the Italian equivalent has gone from 4% to 4.5%. This has a significant impact on the real economy in Italy.


It’s clear why Letta is not going beyond 2015 in his most optimistic predictions for the life of the government. Going beyond that date means exploring topics that are much more complex than how to get rid of the IMU property tax on the primary residence and how to bring in a “Service Tax”.
It’s these topics that need to be considered when talking about growth in Italy, Captain Findus Letta, not the less than “zero point summer” celebrated by all the accommodating media.

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Posted by Beppe Grillo at 08:40 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

August 07, 2013

Tax Authorities against savings


The Tax Authorities are against savings. With the “redditometro” system for assessing income, you have to even account for the spending that is not covered by your annual income. But it’s not the job of the tax payer to show the State how he is spending his own money, rather, it’s the State that has to explain to the citizens how it is spending the money gathered in via taxes. The “redditometro” system is a monstrosity and it needs to be abolished, together with the tax collecting agency, Equitalia. The sooner that happens, the better for everyone.

“The circular issued a few days ago by the tax collecting agency introducing the regulations on the new “redditometro” system does not contain anything particularly significant that we didn’t know by reading the text of the legislation and the decree that put it into effect. We already knew that, on the one hand the new “redditometro” is stricter than the previous one, given that the gap between the declared income and the presumed expenditure is reduced from a quarter to a fifth, that it’s enough for the gap to be seen for a single tax period, rather than for two, and that the expenditure is covered by the income form the current year, as though the idea of “savings” didn’t exist; on the other hand, being more respectful of civil liberties in putting to good use the debate in the offices of the agency, which is something that will be necessary given the sheer size and importance of the presumptions that have been brought in. We knew about the type of spending that ends up under the scrutiny of the tax collecting agency and how they are calculated inductively in the absence of concrete data, derived, for example, from the tax database or proved by the tax-payer. We even knew that the new “redditometro” sees the downgrading of the value given to savings, that attitude protected by the Constitution that up until now has managed to avoid being identified as a new target to be attacked. Thus, the circular confirms the spirit and the reasoning behind the legislation in the perennial battle against the phantom of the tax dodger, contributing to outline his profile: an ordinary person, lower middle class who, to his great merit, remembers to deduct spending on medicines from his taxable income and who tries to protect himself from hard times by taking out health insurance. Italy is full of people who get a season ticket for the theatre season so that they can spend the occasional evening a bit differently and who are very willing to spend time looking after a tiny kitchen garden (plants and flowers are elements indicating tax-paying capacity for the classification “free-time, culture and games”).


For the Tax Collection Agency, these average people, so similar to each other in their tastes, in their behaviours and in their priorities, to such an extent that to each spending action there’s an average value assigned as though individual preferences do not exist, they are tax dodgers “unless there’s proof to the contrary”, enemies of the State, evil ones that have to be hunted down to set an example, so that everyone can learn, not that taxes are a great thing, but that spending and savings are really bad things.”

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The redditometro and the fiscal State
Who is the father of the redditometro?
The tax collector’s mad calculations

Posted by Beppe Grillo at 12:42 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 30, 2013

Letta at work


Letta is at work. He’s dealing with the sales. He’s been off to Greece to see for himself what Italy will look like in the near future. While in the shadow of the Parthenon, he said this: "In autumn we’ll present an important privatisation plan". He said this like a statesman. "It’ll be a broad plan that I’ve already discussed with social partners and we’ll be working on this during August and September". The "broad plan" involves the handing over of the State’s property and its shareholdings in the country’s most important companies: ENI, Enel and Finmeccanica. A sell-off, a "garage sale" of what’s left of Italy. The "broad plan" is designed to pay the interest on the debt that keeps on growing implacably, and to gain time. For the caste, for the PDL and the PDminusL, for the lobbies supporting them, the imperative is survival for as long as possible, even at the cost of impoverishing the country, of destroying the production infrastructure, of giving up national sovereignty. ENI, Enel and Finmeccanica belong to the people of Italy. They’re companies that have been built up with the toil of generations and it’s fundamental for the country that we continue to control them. Nobody, not even Letta or Saccomanni can sell them off as though they were "their own property" to save their backsides for a short while. "Italy is experiencing the worst crisis in its whole history, worse even than the crisis between 1929 and 1934. It’s undergoing an unprecedented process of de-industrialisation", Gianni Toniolo, professor of economics in Rome. "The key to change is in a new political class. The only hope is in the State defaulting", Enrico Colombatto, professor of economics at Turin University. GDP has gone down by 7% since 2007. In 2013 the optimistic projection is at minus 2%, the realistic one is at minus 3% and in 2014 there’ll be no recovery. Wages are 15% lower than in Belgium and 40% lower than in Germany, where, to make up for that, labour taxes are 30% lower. Italy is in 42nd position in the competitiveness ranking according to the World Competitiveness Center (WCC), coming behind Panama and Brunei. Italy’s problem is represented by its administrators that suck it dry year after year. If they are not stopped, with Captain Findus Letta’s i "broad plans" there’ll be nothing left of Italy, not even its bones.

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Posted by Beppe Grillo at 06:47 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 26, 2013

The collapse of the Banca delle Marche


by Sergio di Cori Modigliani. Dedicated to all the people of the Marches region in Italy

“Why has it suddenly happened that the executive is pressing down the accelerator and denouncing such a fiery haste? Why do they have to get their hands on the Constitution at all costs by 15 August and change it immediately? To get what particular measure put in place? You see immediately that they are keeping an eye on international markets. Sure you can see that. In a completely opposite way from what Saccomanni said in Moscow, from what Letta said he got in London, and from what Zanonato, Quagliarello and Alfano go around saying in official declarations, the markets are responding.
Is this not what they are always telling us? Is this not what we have to listen to every other day? “Let’s see what the markets say” or “now we have to hear what the markets think”, etc, etc? Well. The markets are talking about it.
Yesterday, Thursday 25 July, following the decision of Standard & Poor’s (announced yesterday evening at 7:00 pm Italian time, with the downgrading of the first 31 Italian financial institutions defined to be “in a liquidity crisis and on the border of financial collapse ”) the whole of the international financial world is issuing the order NOT to use the banks to invest in Italy . Exactly the opposite of what the government is saying.
The extreme case before the politicians right now, is the Banca delle Marche that once was one of the most solid Italian banks and the financial hub of Italy’s most industrious region, once the prime stronghold of the Italian Communist Party (PCI), then of the Democrats of the Left (DS) and finally of the Democratic Party (PD) that got 37% of the vote in 2008. But in the last elections, they had an electoral collapse. The M5S became the top party with more than 30%. And the deputies elected to the regions are rolling up their sleeves and are starting to work on this. And so, thanks to their commitment, we are finding out the real situation in the Marches.
Sure. This information hasn’t spread to the whole country and nobody has talked about it. And when I say nobody, I do mean nobody. With one exception. The on-line version of Ancona today. All this is thanks to Donatella Agostinelli, the parliamentarian elected to represent the Marches. She has denounced the real financial situation. She’s a graduate in law with a specialization in criminology and she has special knowledge about how things are manipulated in the media.
This is where the M5S people elected to the Lower House come in useful: to uncover the games played by the parties “under the table” the parties that use public financing and divert it into the foundations that then supply the banks who pass the money on to the parties to maintain the clientele, taking funds away from the State, from the local economy and from the companies.
The Banca delle Marche has six days to find 80 million euro, otherwise it will be placed in “administrative measures”: a massive blow for the whole region. The Treasury has said not a word. Neither has the government. The foundations that support it have run out of money because the PD lost the elections and so the client base has thinned out. They no longer have friends in high places that can take action. Not only are they not paying the companies, we have reached a real paroxysm: the banks are calling the business owners the ones that they had favoured in the past because of political convenience and they are asking them to hand over money to save the banks: a true delirium. The companies are now being blackmailed by the banking system: a completely Italian financial madness. Our political class thought that “the markets” would not have noticed. This is what’s happening in the region of the Marches. If you want more details, contact the parliamentarians Andrea Cecconi, Patrizia Terzoni and Donatella Agostinelli." Sergio Di Cori Modigliani

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Posted by Beppe Grillo at 07:29 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 23, 2013

The Devil Wears Merkel


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.

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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 Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 19, 2013

Saccomanni's collateral damage


Italy is at suicide point and the people who have brought us to this point, instead of making a hasty retreat to some country without extradition treaties, are preparing to sell off the family silver to gain time. The banker Saccomanni, promoted Minister of the Economy, has found the solution: "Ready to rake in the cash using Enel, Eni and Finmeccanica". Afraid of a violent reaction, he made the announcement in the far-off Moscow where he’s been invited to attend the G20 (ah yes, we’re still in the G20, but not for much longer). Frightened by his own words and by the comments of the international press he "explained better" that “We’ll be able to use the company shares as collateral". The ordinary citizen who usually thinks of collateral side effects as something to do with the so called "little scrap of lies“ attached to medicines and feels reassured: they’re just "collateral side effects". A touch of diarrhoea, a slight tingling sensation, a slightly higher temperature, reddening of the skin. Where’s the problem with that? So State holdings of shares in the only big national companies still left in Italy, is thus safe. However some suspicious person could go further than this superficial analysis and do some investigation. A tiny bit of help. Who in Italy knows the meaning of "collateral security"?. Here’s a definition:
“A financial product given as a guarantee that a debt will be paid back on time. If the debtor is unable to pay back the agreed amount, at the moment when the debt falls due, then the creditor can take the product and sell it and use the whole or a part of the cash recovered to cover the amount outstanding. If shares are used as collateral, they can be bought by people who want to speculate with borrowed money and the guarantee represented by the shares themselves."
Basically collateral security is like a promissory note on which the value has been left blank, an I O U given to secure a debt, in this case - shares in state companies. "Ah, so it’s something quite different!", says the citizen who has finally been informed and reassured: "It’s not simply a sale, but collateral security". The effects, Saccomanni’s collateral damage, will be long term, leading to the loss of control of the State’s 30% and the "golden share", that makes it possible to have power in making strategic decisions, and a fall in dividends going into the public coffers. It’s a matter of Saccomanni’s collateral damage

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Posted by Beppe Grillo at 06:42 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

June 30, 2013

Mariolino Cannuli and the war-time economy


Italy is faced with a catastrophe, but the government is staying stock still like a kerbstone. Letta, devoting himself to the game of Subbuteo where the maximum risk is dislocating your index finger, is making announcements, announcements, announcements. Captain Findus seems like an updated version of the TV presenter Mariolina Cannuli (from whom I beg forgiveness for the irreverent comparison). There’s a flat calm just like when you’re at sea and there’s no sign of a sea gull, of a wave, of a breath of wind, just before the tempest. What are we waiting for? We have gone bust and we are denying it and we are burying the small firms with unsustainable burdens like increasing the payment on account for taxes like Irap, Ires and Irpef defined by the minister of the Economy, Saccomanni as "a loan from the tax payer that at an individual level has a very “soft” impact". An impact of of 2.3 billion euro, soft soft, a feather. What’s needed straight away, before the Autumn, is a war-time economy. Cut out the provinces, bring down the maximum for pensions to 5,000 euro, cut out public financing to the parties and the newspapers, return the handling of public concessions to the government, starting with the motorways so that it’s the State coffers that are raking in the profits and not private companies like Benetton, or in cases where this is not possible, re-negotiate the conditions, eliminate political bureaucracy from companies with State ownership (even partial) where thousands of directors are prospering, nationalise Monte dei Paschi di Siena, eliminate every big useless public works project like the Tav in Val di Susa and Expo in Milan, drastically reduce the salaries and benefits paid to parliamentarians and people in every public position, cancel the mission in Afghanistan, stop the purchase of the F35 jets. We could go on and on. There’s no time left. Resources have to be devoted to the partial lifting of the tax burden on the SMEs. the introduction of a citizen’s income and the reduction of the public debt. In spite of abnormal taxes, the public debt is growing at a rhythm of 120 billion a year. In 2013 we’ll have to sell 400 billion State bonds (who will buy them and under what conditions?) and meanwhile they are discussing constitutional reforms to maintain the power of the parties and of the lobbies. Some people will object that there’s "an attack“ on acquired rights, like the golden pensions (in Italy there are 100,000 “super-pensioners” and they are costing the Italian State 13 billion a year and this is funded from the pension contributions of a good 2,200,000 workers). For some time now, the acquired rights of the “exited” people have not been considered, similarly for the “precarious workers”, and for those who will never get a pension. In a war-time economy, acquired rights no longer exist.

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Posted by Beppe Grillo at 03:15 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

June 29, 2013

Letta and the elephant under water


One summer I was at the seaside when I felt some heavy implacable hands on my shoulders. Someone pushed me under the water. For one or two whole minutes I tried to get free without succeeding. After loads of useless efforts, full of anguish, I was about to resign myself to my destiny when just as in an enchantment, whoever wanted me dead, let go of me. I came up to the surface and saw him. I didn’t recognise him. He was laughing but when he looked at me he changed his expression. He said "Sorry - it was a joke. I thought you were my friend Alberto". Captain Findus Letta is like that. When he sees an SME he makes it go under, but just for a joke, as though he were among friends. It’s just that the joke is never successful and the company dies from lack of air. The latest sting from the Nephew of his Uncle that would drown an elephant is the advance payment of 2.6 billion euro because of the increase in the payment on account at the end of the year. The payment on account for the Irpef income tax is going up from 99 to 100%, on Ires from 100 to 101% and on Irap from 100 to 110%. A sophisticated form of water torture, like waterboarding, a form of controlled drowning carefully controlled and tailor-made for the companies. The problem of the SME’s is cash, liquidity, money, dosh. The banks are not supplying credit as they are too tied up buying Italian State bonds. The State is not paying back the money owed to the companies that is now amounting to about 130 billion. When things are going OK, clients are stretching payment terms to 120 or 180 days. When things are going badly, clients are going bust and the money is no longer going to be paid. However, the government is desperate for money so that it can put off the sales tax and the IMU property tax to a date as yet unknown. So what better than a hefty tax on the companies rather than cutting useless costs? The crisis of the small and medium sized companies is causing a collapse in the tax revenues that Italy depends on and that needs to be about 800 billion a year. What more do you want in life and what more do you want from Captain Findus? A push under water?


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Posted by Beppe Grillo at 12:19 AM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

June 23, 2013

Waiting for Godot


While the Government is wasting time waiting for Godot, Italy is at risk of default. Action is needed as soon as possible with the restructuring of the debt. In the last two weeks, the interest that the market is demanding on our 10 year State bonds, has gone up by 10%. The spread has gone back to about 300 points, to the levels of September 2012 and its rise is just beginning as the market has to absorb a lot of bad news about Italy.
The first news item. By now it’s clear that the monetary "drug" that the FED has supplied in the last few years at a rate of 85 billion dollars a month and the purchase of State bonds, is over. Ben Bernanke‘s announcement has been a “cold shower” for the markets. The American economy has now taken off so well that it no longer needs the support of the FED that is now worrying about inflation.


Is there anyone in Palazzo Chigi?
Time is a very precious resource that is being allowed to pass by without reacting. This attitude will do nothing but increase the cost that the crisis will present to the Italian people. The Government’s public accounts estimates are showing negative growth for GDP of about minus 1.3% for 2013. In reality, in the first half of 2013 Italy has been coasting at minus 2.4% and it will probably end the year at minus 3%. Is there any sane person that could believe that Italy could grow by 1% in the second half of 2013 as Letta&Alfano are forecasting? Italy is on its way to an economic measure to adjust the public accounts by at least 20 billion (and that could be doubled) after the summer. It’s quite different from having Europe’s permission to exceed the 3% increase in the deficit. It’s quite different from postponing the IMU property tax. By waiting for Godot, Italy dies.

Posted by Beppe Grillo at 09:18 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

June 02, 2013

Italy is like a camel


>>> Today, Sunday 2 June, I’ll be in Marina di Ragusa, piazza Malta, at 5:45 pm and then at 9:00 pm I’ll be in Acate’s piazza Matteotti. Tomorrow, Monday 3 June, I’ll be in Leonforte at 9:00 pm. The live broadcasts will be on La Cosa <<<<<<<<<<<<

Man’s heart is like a camel and if it is weakened, it can suddenly die if put under pressure while giving no warning beforehand. Our hearts will put up with anything, they can compensate for every problem of the body and then suddenly they give way. Italy is like a camel. It has no more water stored in its humps and yet in front there’s a desert that seems endless. According to a study carried out by the CGIL Trade Union, it’ll take 13 years to get back to the GDP we had in 2007 and it’ll take 63 years to have the same employment levels. Sixty three years? It’s like Moses’ time of wandering in the wilderness moving towards the Promised Land. The official figure for unemployment is 12.8% (in fact when you take into consideration those who are discouraged and who are no longer looking for work, the real figure is about 20%). That’s the worst figure since 1977. 40% of young people are unemployed. The South has become the land of emigration just as it was in the 1800s. The public debt beats its own record every month. In March it reached 2034 billion euro, an increase of 6 billion since February (when it was at 2028 billion euro). The annual interest on the debt is increasing and is now about 100 billion a year. According to the Bank of Italy, GDP in 2012 was 7 per cent below what it was in 2007 and income available to families was 9 per cent lower, and production has gone down by a quarter. Each minute, a company closes down, but with thethe IVA sales tax going up in July from 21 to 22 per cent, thus increasing costs to families by 200 euro (source Adusbef), the death rate is destined to rise. Less will be bought, less will be produced, even basic goods. The OECD has revised its estimate for our GDP to minus 1.8% for 2013, an estimate that is more than optimistic. Translated into unemployment that means a loss of about a million jobs. The humps of Italy-the-camel are dry, but the people selling mirages are multiplying. Captain Findus Letta is offering a number of oases "The absolute priority is creating jobs, reducing the tax burden on employment, then there are other priorities, like housing ... we have sent out a massive message to give work to the companies, to improve energy efficiency, to relaunch the sectors of furniture and construction." Meanwhile the Government is only making proclamations and it is amusing itself with the idea of presidentialism, the electoral law that will come in under Napolitano’s vigilant eyes, the “taking us for a ride” cut to party financing (Letta why are you not straight away giving back your party’s 46 million euro like the M5S has done?), the law to eliminate the M5S from Parliament, the new Constitution and other amenities. Italy-the-camel will collapse and the Italians won’t know until the early evening, after the advertising break and before the helicopters arrive.


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Posted by Beppe Grillo at 06:36 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 26, 2013

The Quiet Collapse of the Italian Economy


The Quiet Collapse of the Italian Economy, by Roberto Orsi of The London School of Economics and Political Science (LSE)

"While attention on the Euro crisis has been focusing primarily on Greece and Cyprus, it is no mystery that Italy, alongside with Spain, constitutes the real challenge for the future of the common currency, in any direction events will be unfolding. In the relative silence of the international press, Italy’s macroeconomic situation has been showing no sign of improvement, and indeed numerous indicators portray a national economy which finds itself in a depression, rather than in a however severe recession. It is no overstatement that the Italian economy is currently collapsing. Italy is the third largest economy of the Eurozone (after Germany and France), holds the largest public debt (over €2 trillion), which has been growing at an astonishing pace, even in more recent times and particularly as a ratio to GDP (130%), since the latter is contracting fast. How is this sustainable? Well, it is not. But for the moment, thanks to the ECB direct interventions (€102.8 billion of Italian bond purchases in 2011-12) and especially to the LTRO mechanisms, the finances of the Italian state can still be kept afloat. Italian banks have been absorbing €268 billion of liquidity issued by the ECB by means of the LTRO programme. In its essence, the mechanism is the following: "because the ECB cannot lend liquidity directly to the states, except in times of absolute emergency and for the stabilisation of financial markets in the short term (as happened in 2011), it lends money to the banks, which in turn purchase government-issued bonds". Interestingly, the LTRO scheme has also become an instrument for the relatively orderly withdrawal of international investors from Italy, especially French and German, whose share of public debt has fallen from 51% to 35%, mirroring the rise of Italian banks purchasing public debt. This is an important signal, which goes in the opposite direction of an increased interdependency as would be expected from a monetary union in preparation for a political union. It is arguable that many investors are actually systematically reducing their exposure in South Europe, possibly hoping that a future breakup of the common currency will have less harmful consequences if their involvement in the financial and economy destiny of those countries is curtailed to the minimum. For Eurosceptics, it is a signal that, once all foreign investor withdraw, Italy will be left to its fate.
The truth is that the Italian state went bankrupt in summer 2011, when interest rates on the national debt went out of control, and as a result Italy lost access to the financial markets. Of course, because of the sheer dimensions of Italy as an economy and as a DEBTOR, the ECB and political authorities in Europe have agreed to create around the country’s finances the appearance of a market, which is in fact, as the numbers above show, largely artificial. Ideally, Italy should stay on this artificial support until the economic conditions improve and confidence is restored to such a level that the country will have again access to a “normal” credit market. However, this is not happening and there is no sign it is going to happen in the years to come. The situation of the Italian economy is simply dramatic.
Recently, a study has appeared which reveals how the current crisis (2007-2013) is in many ways much worse than the 1929-1934 contraction. In the present crisis, investments have collapsed by 27.6% in the five year period, against 12.8% in the interwar depression. GDP has declined by 6.9% against 5.1%. Italy, with the second largest manufacturing sector in Europe after Germany, has lost about 24% of its industrial production, going back to the 1980s level. No data is currently showing any sign of recovery. From the beginning of this year, the country has lost over 31,000 companies. Every day 167 retail units are lost, signalling an authentic disintegration of the retail sector. The automotive sector, a crucially important one for the Italian economy, has been constantly contracting: from about 2.5 million cars sold in 2007, sales in 2012 reached only the 1.4 million mark (the 1979 level) and they are still contracting this year. Construction, the other pillar of the national economy, is in rout: the 14% slump in 2012 is only the last in a series of difficult years. Home sales have dropped by 29% in 2012 against the already miserable 2011, to the 1985 level of 444,000 units, about half the number of 2006. Of course, the consequences of this economic disaster in terms of loss of employment are dire: unemployment is now at almost 12% and growing fast. Half a million workers have been put in stand-by and receive a state funded social benefit (cassa integrazione): it is projected that this year again the state will pay well over a billion work hours equivalent of this benefit. Needless to say, it is far more likely for all these workers to lose their job, rather than being re-integrated in the production cycle. The Italian state has so far managed to defend its financial position by means of increased taxation, limited spending cuts and more borrowing. As illustrated above, the borrowing scheme has been engineered with the help of the ECB and the banking sector. Taxation has now reached unprecedented levels, and it is asphyxiating the economy together with the credit crunch. Spending cuts have been implemented to a certain extent, but like taxes they have a depressing effect on the economy, not to mention their unviability in a largely clientelistic, if not openly kleptocratic system.
Under pressure from the European Union, Italy has committed to a rigorous budget and it has even introduced a balanced-budget amendment in its constitution. Absurdly, the Italian state runs a surplus when public debt interest payments are excluded, but this only appears to be because, purely and simply, the state often “forgets” to pay its suppliers (the outstanding debt to private companies is in the €90-€130 billion range, depending on the criteria for calculation). Now, it is not difficult to imagine that, in a few months, despite the new taxes, the sheer collapse of entire sectors of the economy will cause a rapid contraction of tax revenues. The Italian state cannot possibly accumulate even more debt at a faster pace (at least for Italy, the austerity debate makes little sense). Italy will simply run out of options, and it will require additional measures from the EU.
Essentially, some sort of bailout. But because of the sheer size of the economy and the public debt, this is simply impossible. In the absence of any political consensus around a radically different monetary policy of the ECB, i.e. unlimited QE, which will probably never materialise, and which will clearly not solve any of the country’s structural problems, the only realistic scenario will be that of a debt restructuring or renegotiation, as suggested by Nouriel Roubini in a precise analysis published more than 18 months ago. The collapse of the Italian state finances is rapidly approaching. It will have an enormous impact on the Eurozone and the European Union."
Original versione in English

Posted by Beppe Grillo at 05:58 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 03, 2013

5 Star Social Housing


“In the last six years sales of property have halved (source: Confedilizia). In 2012 the number of mortgages to buy property has gone down by 42%.
Many citizens can no longer pay their mortgages. Their homes are put up for auction. There has been a steep increase in foreclosures. But because of the slump in the property market, many auctions find no buyers. Lending institutions are in possession of property (whether property acquired as the result of foreclosure, or as security) that they cannot sell and that continues to lose value. A million families want to buy a home or stay in one for which there is a mortgage. But they find this is not possible as they cannot find a bank to lend them the money or to give them a mortgage. “Precarious workers”, those on short term contracts, freelance professionals and associates as well as a decent number of entrepreneurs, are considered to be at risk of insolvency and so are not given any loan.
Redefining the idea of housing whether it’s social housing or with facilitation, there’s the proposal that the State is a “guarantor” for families. The towns and local authorities could negotiate with the banks to get discounted prices for the unsold properties to allocate them to those who can’t get a mortgage.
The risk of insolvency is usually not greater than 5% and if a citizen is going through a period of difficulty, the State could temporarily make the monthly payments and then get that money back by increasing the payment period. For example, if a person makes monthly payments for a 20 year mortgage on the property and they for 2 years they are unemployed, they could shift the years when they didn’t make the monthly payments and increase the length of the mortgage to 22 years. The profit that the banks would get, should be used to finance Small and Medium Enterprises. For this to happen, there’d need to be a policy document from Parliament addressed to the Bank of Italy for a six-monthly verification of the funds freed up to be devoted to this project.
Among the advantages of such an operation are:
1) A million properties could be sold and this would allow the property market to take off again
2) A million families that are currently not eligible for credit, could have the chance to buy a house at a discounted price and closer to a real market price.
3) The State would act solely as a guarantor without an immediate outlay of resources
4) Although they would have to accept a lower price for the properties in their possession, the banks would recover their credit and thus would have a solution to get out of the current tricky situation by swapping property that cannot be sold for credit guaranteed by the State.
5) With the improvement in the liquidity of the banks, many small businesses would be able to get access to the financing needed to get their businesses to take off and to thus boost the economy.
6) Citizens would have greater protection if they happen to lose their job or have a serious illness.
7) Simply by providing a guarantee, the State could avoid paying out big sums of money needed immediately for welfare payments and all the related knock on effects for public finances.
8) The State would not suffer losses even if there is temporary insolvency because they could get back the money by lengthening the mortgage period." David Borrelli

This proposal has been passed on to the 5 Star MoVement parliamentary group.

PS: Last Tuesday, David Borrelli ended his term of office as a local councillor in Treviso. After 5 years of service for the citizens he has decided not to put himself forward again but he will remain "in the movement, and available to everyone." Thank you David!

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Posted by Beppe Grillo at 10:31 AM in Economics | Comments (10) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 01, 2013

May Day ostriches


May Day used to be the festival of the workers. Now it’s the festival of the unemployed and the big concert in Rome. Once upon a time there was "panem et circences“ {bread and circuses}, now we’ve only got the “circences”, but just once a year, and in pride of place, instead of Caligula or Diocletian, there’s the top brass of the Triple Trade Union. Companies are closing down every minute, and the "official" figure for youth unemployment has reached 38.4%. Italy has become a nation of people who have been laid off, of “exited” people, of unemployed people, of “precarious workers” and of emigrants. In the past, the youngsters from the South used to emigrate to the North, to Milan, Turin, and Bologna. Now it’s the the youngsters from the South and from the North who are emigrating abroad all together. Graduates and those with diplomas. Blood and intelligence are being poured out. After Romania, Italy has the second highest number of emigrants in all of Europe. The country has nothing to support it. Just chitter-chatter and mess ups. The tax revenue and the “Irpef” income tax are collapsing because of the disappearance of companies and employees. The volume of traffic on the roads has dropped by 34% in a year. The “autogrill” service stations on the motorways are deserted. Italy is grinding to a halt like a massive machine suffering from rust, one piece after another, until it’s stopped moving. Four million public employees, 19 million pensioners, half a million people living on politics, these are numbers that cannot be kept going by a country that has had no development for 15 years, with a GDP that has been in free fall starting well before the crisis of 2008. Celebrating May Day is a tired rite providing absolution for the people who are responsible, for the trade unions that are complicit, for the "get rich quick entrepreneurs“ in the Confindustria that get the public sector contracts, for the parties that have occupied the State. It’s the “celebration” of terrible memories like “Caporetto” and “8 September 1943” on all TV channels at the same time. “Captain findus Letta” is promising cuts and more cuts without any source of money to cover the measures and people are dancing in the streets while there is no money in the pot to pay the workers that have been laid off. One day of merrymaking that has the strong and rancid smell of a feast of the dead workers. The CGIL trade union said that "it’s a positive fact" that the Nephew of his Uncle "touched on many points raised also by the trade unions", and that that indicates "sensitivity and listening with care". Prosit! Your good health!

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Posted by Beppe Grillo at 06:23 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 24, 2013

Help the SMEs or die


Detail from "Happy new year 2010" by Skyshaper

In Rome they are sharing out the spoils and the armchairs of the Second Republic. Meanwhile the economy can’t wait. Every minute, there’s a company closing down. By this Autumn, we could get to the point of no return. The 5 Star MoVement has two fundamental points in its manifesto: social solidarity, with the citizen’s income, and the measures in favour of the SMEs. The whole fabric of the environment for SMEs is disintegrating like a massive spider’s web whose silken threads are breaking one by one until it’s completely destroyed. Without this network of businesses, Italy is done for. That’s what supports public finances. In recent months, M5S people have had numerous encounters with small and medium sized enterprises (SMEs). They are asking us to help them survive. Many have got to the point of suicide and they are looking to us as their last chance of survival. Up until now, the policies pursued by the government have been to increase taxes for private individuals, for companies and on consumption. One suicidal position that is transforming the country into a desert and that has the objective of maintaining the current situation regarding privileges, waste and the costs of politics and putting banks and finance at the top of the pyramid instead of giving pride of place to production.
Together with Casaleggio, I have met up with a lot of companies and associations connected to ConfAPRI, whose members are representing about a million entrepreneurs, it’s a network of entrepreneurs, professionals, and experts belonging to or representing groups, associations, companies and individuals. ConfAPRI is in agreement with most of the points in our manifesto and has indicated its willingness to support the proposed laws in our programme. The first ones to be presented to Parliament with extreme urgency to keep the companies alive are:
- Abolition of IRAP. An absurd tax on employment. The more a business takes on staff, the more it gets into debt in order to grow, the more it is taxed. IRAP has to be reduced gradually starting in 2013 and it needs to be eliminated by 2014. With IRAP, the richer companies employing fewer staff are paying taxes at a rate of about 32%, while the poorer companies with a lot of workers, are paying up to 80% in taxes. As shown in a report by the * Istituto Bruno Leoni, the amount raked in by the IRAP tax can be covered if our costs of politics are brought into line with those of European nations.
- Payment of the IVA sales tax only when the money has been received. IVA should only be paid to the State after the payment for the goods or services has been received. (As well as this, the increase in the IVA sales tax due 1 July, should be suspended). By shifting the moment when the sales tax is paid, this will not make much difference to the amount paid, but it will alter when that is received.
- Immediate release of about 120 billion euro that the State and public bodies owe to the private sector. This may even take place by means of payment in advance or pro-soluto {without recourse} discounts with the publicly controlled “Cassa Depositi e Prestiti” or with the banks (with interest to be paid by the debtor and not by the companies). This measure also lays down that payment delays, between the State, public bodies and private sector companies, must never go beyond 60 days. And if there is a delay beyond this period, then interest at a rate of 8% above the ECB rate must be added as well as any documented costs caused by the excess delay. These measure have to be approved by parliament as soon as possible after they have been presented by the M5S. There’s no time left.

* Costs of politics in Italy

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Posted by Beppe Grillo at 09:17 PM in Economics | Comments (12) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 08, 2013

Cyprus or Greece?


Will Italy end up like Cyprus or like Greece ? Beppe Scienza - Department of Mathematics, University of Turin

What’s happened to Cypriot banks has shocked many Italian savers. As for "news items", there’s one good and one bad:
1. Italy won’t end up like Cyprus
2. Italy could end up like Greece.
Let’s see why.

Italy like Cyprus?
The banks in Cyprus stayed closed for 12 days, then they opened up with very severe limitations (a daily maximum of 300 euro can be withdrawn in cash, and a monthly maximum of 5,000 for credit cards etc.). But the worst thing is the executioner's axe that has come down on current accounts in the Bank of Cyprus (Τραπεζα Κυπρου) and the Cyprus Popular Bank (Λαικη Τραπεζα). For each current account, only 100,000 euro is still available. As regards any amount above that figure, it’s not even clear whether anything will be left when considering extraordinary taxes, forced conversion to bank shares etc. Anyway, the alternative to these measures was the collapse of those banks.
What’s happened in Cyprus is a further proof of the stupidity of the ideas so dear to Italian banks and the journalists that are subject to their orders, the people blethering on about the "battle against cash as a battle for civilisation" (Giovanni Sabatini, head of ABI, the Italian Banking Association). It’s all false: no other means of payment offers the same protection and the same guarantee of availability. The ECB has sent to Cyprus a number of containers with 5 billion euro in banknotes, not in credit cards. Refer to my presentation "Long live cash! It’s the Bundesbank that says so": see: The indecency of the banks
But going back to the worries of the savers, is there the risk that the same thing may happen to Italian banks? The response is no. Cyprus has (or had) affinity with Malta or with Luxembourg , not with Italy or Spain. Most of the deposits in its banks were foreign (Russian, British …), mostly from tax dodgers or worse: those attracted by tax advantages. It’s not like that for the Italian banks.
In fact it’s possible to say that the Cypriot banks were nominally banks but were in fact acting as funds or investment companies in speculative products. That’s not the case for Italian banks. If, however, someone wants to have more peace of mind and withdraw the money from their account in cash to put it in a safe-deposit box, they are free to do so without any limits. And if anyone tells you differently, perhaps you could let me know (

Italy like Greece?
However, what is much greater is the affinity with the situation in Greece before the insolvency. Without indulging in glorifying catastrophes, it’s undeniable that the current cocktail is venomous. This is made up of a very high public debt (it seems to be close to 130% of GDP and that is a nasty percentage), an economic crisis and a political class that is not up to tackling the situation, to say the least. Ending up like Greece is certainly not about to happen in the near future, but it cannot be excluded in the medium term. In fact this is not ruled out by financial markets.



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Posted by Beppe Grillo at 10:17 AM in Economics | Comments (6) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 02, 2013

Story of a taxi-driver


Story of a taxi-driver and the tax collection agency

"Greetings to all the friends of Beppe Grillo’s blog. I’m here to denounce what has been happening to me in the last few years causing me to have issues with the tax collection agency.
A few years ago the tax collection agency made me pay a penalty for two years and they asked me to pay nearly 80 thousand Euro to cover taxes and penalties and after negotiations with tax specialists they ended up asking me for 40 thousand.
I just don’t have that amount of money and in the end I made the decision to give up my work and use the money I’d been earning to pay these taxes.
What I’m saying is that I just wasn’t listened to by the officials in the tax collection agency. I’m a member of a Trade Union, and I’m delivering a public service, I’m a taxi driver, and I believe that even the tax specialists themselves didn’t look after my interests properly even though I explained my problems and showed them all the documentation. I have a debilitating illness and the big mistake I made was not to reveal my problem.
For this debilitating illness, I’ve had to stay in hospital a number of times. I’ve got to have treatment almost every day. I’ve been under observation for so many years and this illness means that I cannot dedicate myself full time to my work. The documents speak clearly. I’ve got statements from hospital consultants, from doctors that have looked after me, and I’ve got the results of the MRI scans that can show what’s happening with my illness. What happens is that today I’m fine and tomorrow I’m not, and I have to stay in bed. I need lots of cortisone, and lots of intravenous drips. People could ask me: “How come you’ve never asked INPS for a disability pension?
I have actually done that, but that was when I was still young, aged about 40-43 and perhaps it was too early to do so. Anyway it was a pretty bad time, because it was the moment when people were denouncing “false invalids” who were receiving pensions that should never have been provided. Anyway I had to go to a medical examination at INPS with a medical board and I found it very humiliating and since I’m a very proud person I didn’t want to face that situation again. And I said: “Basically, you’ve got the results from the MRI scans, the reports, the times I spent in hospital. You know what my condition is, why do I have to always go through this humiliation of declaring what I’ve got? ” So from that moment I proudly took the decision, (wrongly) to never go through another medical examination and I just went on doing my job.
The documents and all the consultant doctors have always stated that I couldn’t (and still can’t) work at the same rate as a normal person. I’m a taxi-driver and I’ve got enough sense to stop working and go home when I’m ill. Anyway with the amount of money I’ve earned, I’ve been trying to do things properly and I’ve declared even what I didn’t have to [he declared more: editor] because I don’t work like lots of other colleagues. To add to that, all sorts of bad things have happened to me: my mum and dad have died, and then I got divorced and with all these upsets I felt I was under attack and I ended up in hospital one more time.
Those were the years when the tax collection agency was asking me for money, the years when I wasn’t working, but I didn’t manage to explain all this to the officials in the tax collection agency.
The big problem here is that the tax collection agency when looking at our work as taxi-drivers, they take into account all the kilometres travelled as kilometres travelled for work, but in reality the law allows us to use the vehicle even when you are not on duty, that is you can use it for your personal life. Given that the only means of transport I have is this taxi and I used it to go back and forth as I needed to visit my daughter, so I did loads of kilometres and the psychologist told me not to stay home. I was out and about a lot and then I had this stay in hospital, and then I had to spend time convalescing. I wasn’t working. I didn’t make any money and I used the vehicle for private journeys.
They say to me: “But how did you get by?” So I explained that I had an additional pension fund and I withdrew all the money from that to give to my ex-wife, to pay off mortgages and to give money all over the show and above all so that I could keep on living. I’ve been living like this, but they don’t care that I can be so unwell that I can no longer work. That’s of no interest to them. The only thing they’re interested in is to get money into their coffers with these taxes and get extra by applying penalties and so on.
The result is that I’ve gone on being unwell and I’m getting progressively worse. I’m closing down the business activity and I’ll have to use the money I’m earning to pay taxes on the sale of the business, and I signed the agreement because I was worried that they’d come and sequester my house, the only thing that I still have after so many years of sacrifice. I’m nearly 62 and I’ve got an apartment with two rooms. Lots of people have advised me to stand up to them, to declare war on the tax collection agency. The tax consultants have said that nothing can be done because I’ve signed the document. It was the feeling, the wish, so to speak, even a matter of pride, to denounce what has happened to me. I’ve heard that 300 entrepreneurs have committed suicide. I’m not going to do that because I’ve got my children who are supporting me, however these people are literally destroying me!
Whatever I have, I have after years of work, as a labourer, as a mechanic, basically I’ve got to a situation, as you may notice from how I am delivering this message. I’m very agitated. At times I’m not really making sense. It’s because I’m angry, because I feel that I am being incredibly unjustly treated.
Sure, there have been times when I’ve done OK with this work, but it’s not always been like that! What the tax collection agency is saying is so incongruous and unjust that they are making me angry and they are obliging me to do this: to let people know about my situation via Beppe Grillo’s blog and I’m sure that there’ll will be heaven knows how many other people in a similar mess." A taxi-driver

You could find these posts interesting:

Lao Tse and IRAP - Regional Tax on Production
The owner of the small and medium sized enterprise, man of the year

Posted by Beppe Grillo at 07:23 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

March 29, 2013

Lao Tse and IRAP - Regional Tax on Production


In order to survive, the Small and Medium Enterprises (SMEs) have to be able to stand on an equal footing with European competitors in relation to red tape, taxes, and services in support of entrepreneurship (for example the tightening up of action against false accounting and the introduction of effective anti corruption regulations). Today the SMEs have no tools to protect them. The abyss in which they find themselves, has been created by the parties, the very same ones that are now tearing their garments. The reconstruction of the SMEs must begin straight away to avoid the collapse of the country. A first step is the abolition of IRAP bringing in about20 billion a year in taxes from companies, even if they are making a loss. They make a loss and they pay taxes on the loss. The State is acting like someone who sees a drowning man - and then ties a weight round his neck. "Yeeeeeeeeeees! And where’s the money going to come from?", this is the typical objection that means nothing is done.
The revenues from IRAP are more or less equivalent to the difference in the cost of the political scene in Italy and the costs in the main countries of Europe. It would be enough to cut these costs to get rid of IRAP and give a bit of breathing space to the companies. If you measure the cost of the political scene in relation to the population, the extra cost in Italy relative to countries of more or less the same size, is about 1% of GDP, that is about 16 billion, a third of the deficit. Since 1990, the cost of politics has doubled - it has gone up by about 20 billion, and most of this has gone to national politics. A few examples. The cost of the Italian Parliament is twice that of the French one in terms of the cost per parliamentarian: 920 in France and 945 in Italy. In Italy it costs 1.6 billion compared to 0.9 billion in France and 0.6 billion in Great Britain. In 2013, the Quirinale Palace is predicted to spend 349 million whereas the Elysée Palace is costing 112 million. Public financing to the parties amounts to 100 million euro a year, an amount that can be renounced simply by writing a letter, as the M5S has done to renounce the 42 million assigned to it. Eliminating the provinces would give an annual saving of 2 billion. Then there are savings on the 7,000 official blue cars, and the 52,000 less powerful, non-chauffered "grey cars", looked after by 19,000 personnel of whom 10,000 are drivers. Here there could be a saving of 800 million and there could be other savings of smaller amounts. "A journey of a thousand miles begins with a single step", Lao Tse

Figures: I costi della politica in Italia {Costs of politics in Italy}

You could find these posts interesting:

It doesn’t take much
Get rid of IRAP, save the SMEs
The owner of the small and medium sized enterprise, man of the year

Posted by Beppe Grillo at 04:29 PM in Economics | Comments (15) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 22, 2013

It’s written as MPS, but you read it as PD - Beppe Scienza


>>>Today, 22 February at 6:00 pm We’re meeting up in piazza San Giovanni in Rome! Follow the live broadcasts on La Cosa! >>>

Article by Beppe Scienza, Department of Mathematics, University of Turin

Savings are not a problem only for the rich. If that were the case, you could say: “Let them deal with it!"
In fact, it’s quite the opposite. Those who have little money, do well (if they can manage it) to save something that could come in handy for sudden emergencies: a time when you’re unemployed, an urgent operation with waiting lists that are too long etc.
Above all it’s a good idea to put some money away for your old age. Even if we avoid some kind of terrorism in the social security sector, something typical of trade unions and insurance companies, pensions could be incredibly low.
Unfortunately, in Italy, people with savings are victims of a policy that for decades has been on the side of the parasitical industry of managed savings. To push people towards making additional provision for old age, there was action on two fronts: the law to dismantle the TFR {lump sum payment at the end of your working life}, was brought in by a Berlusconi government in 2005. And then in 2006, it was brought forward and made even worse by the Prodi government.
It’s almost impossible to find a bank, an insurance company, or a door to door network that’s not pushing out products that are harmful for those with savings. As some people say: even the healthiest is sick. But there’s one that manages to do a bit worse than the others, and that is Monte dei Paschi di Siena (MPS).
It’s not just the oldest bank in Italy, founded in 1472, it’s also the one that has issued some of the worst products … backed up by more than five hundred years of history.
It’s true that when you invest money, you can make a loss. Nobody denies that, and I certainly don’t. But you have to try really hard to lose more than 100%.
And yet MPS’s management company’s managed fund called “Spazio Euro Nuovi Mercati” managed to destroy the 104.3% of its capital over the space of three years. Basically it lost all the money entrusted to it and more money as well. In fact, when you take away the tax credit on the loss, the people saving made a loss of 91%, that is anyway a massive disaster. For the records, this is called “Professional management of savings".
But we have to mention something that is even more perfidious, an initiative dating back to Vincenzo Bustis when he was the CEO of MPS. He’s a man who seemed to be much appreciated by Massimo D’Alema, who is already remembered for the esteem he placed in the infamous “captains courageous". It’s a product marketed with the slogan "innovation in social security" (Publicity attached) and sold with various enticing names like: For You or 4You, My WaY etc. (What a lot of English names! If an Italian product has an English name, smell a rat!)
In reality it’s an explosive combination of a bond, a managed fund and a mortgage. What was the consequence? Anyone who allowed themselves to be tricked (and how can someone who is not an expert avoid that?), landed up not only with no money after two years but also heavily in debt.
Let’s consider someone who signed up to the “For You” product and paid in their savings for two years, let’s say for example amounting to a total of 10,000 euro. Well, not only did they lose everything. But they would have ended up with a negative balance of 22,900 euro, as the total value of their shares and the debt with the bank. So basically they owed the bank loads of money. As a percentage they’ve made a loss of almost 330%, much worse than with the country of Argentina, or the companies like Parmalat, Cirio, Alitalia etc. Something like that for a savings product is the maximum, also because the product called “For You” and the matching one called “My Way” were presented as “low risk” and with the aim of “maintaining value”.

More detailed figures for the products cited, Excel files with the evaluations etc. are available on my web pages at the University of Turin:

PS. There’ll be connections from Piazza San Giovanni in Rome to the cities throughout Italy that are following the streaming of the event. If the square near you is broadcasting images in live streaming, fill in this form to get the connection. PPS. Place the icon for "Io Voto M5S" {I’m voting for M5S} on your Facebook profile with a click on the app. "Attivista 5 Stelle“ {5 Star Activist}.

Posted by Beppe Grillo at 07:30 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 17, 2013

Monte dei Paschi di Bersani


<p><strong>>>></strong><em>Today, 17 February, at 5:00 pm I’m in Savona’s Piazza Sisto IV, and at 9:00 pm I’m in Genoa’s piazza De Ferrari. Tomorrow, 18 February, at 5:00 pm I’m in Cremona’s Piazza Stradivari, and at 9:00 pm I’m in Pavia’s piazza Vittoria. Follow the live broadcasts on La Cosa! >>>

The Monte dei Paschi di Siena (MPS) bank would almost certainly have gone bust without Rigor Montis’s loan of 3.9 billion euro, an amount equal to how much Italian families have contributed for the IMU property tax. MPS has had a mind-blowing stock market fall in the last few years. Shareholders have lost nearly all their investment. MPS has had a price fall that is being investigated by the Siena Prosecutors Office, a gaping hole that would make Parmalat look like nothing. The amount is 21 billion, made up thus: 7 billion in overpricing when buying the Antonveneta bank, 7 billion in debts acquired when buying Antonveneta, 7 billion handed over to foreign banks for reasons still to be verified. MPS was privatised in 1995 and from then on it has been controlled by a charitable Foundation. Until a few months ago, 55% of the Foundation was in the hands of members appointed by the Region of Tuscany, by the Province of Siena, and by the municipality of Siena - all bodies that are controlled by the PD. It’s unthinkable that the secretaries of the PD that have held office since 1995 were in the dark about Antoveneta or about the sale of significant sources of income including goods and real estate belonging to MPS that made it possible to pay out generous dividends. If the various people like Bersani, D’Alema, Veltroni, Franceschini, Fassino never realised that all this enormous financial disaster was happening, how can the PD aspire to run the country? People have to remember that in the last twenty year period, the PD has been in government for about 10 years, and has shared things with Berlusconi. A decade each for have the festival of Italy.
Napolitano, a former PD man, has called for privacy in relation to the current investigations by the Siena Prosecutors Office instead of hammering on the table and shouting "Give us the names of the people responsible!“ as President Sandro Pertini would have done. The fiscal shield was used to bring back illicit funds into Italy with the payment of just 5% in tax. It was approved, thanks to the absence from the Chamber of numerous PD parliamentarians. Why? Is it legitimate to have a complete list of the wealth brought back in accordance with the Fiscal shield, to verify whether it was connected to the plunder of the MPS? Or is it a State secret?
Bersani never gives a response in relation to his own responsibility or the responsibility of his party, but he’s coming out with absurdities that are getting bigger and bigger: "There’s obviously the wish to send people to prison, just like the fascists did. Watch out, that we are not to be cowed ..." The M5S is not sending anyone to prison. That is the job of the magistrates. Perhaps Gargamel is directing his words at them. Craxi had more class.



Posted by Beppe Grillo at 07:34 PM in Economics | Comments (9) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 13, 2013

It’s possible to make cuts. It’s possible to fly


Rigor Montis’s "spending review" has stopped with the pronouncements and with the soft sound of the English word "review". The Monti government has increased taxes, and it has done nothing else. The "spending review" has not been done. But the taxation review has been overdone, to such an extent that for the self employed, the skilled workers, the owners of small businesses, and all those who are subject to the “studi di settore” {estimates of how much you should earn}, it could be more worthwhile to stay home than to go to work. Before the total collapse of the revenue from tax collection due to the closing down of companies at a rhythm of a thousand a day, what’s needed is to make cuts without being held back by anyone. Italy is a hot air balloon that is losing height. Useless costs have to be thrown overboard. To do this, what’s needed is a government of public health that can be guaranteed only with a victory for the 5 Star MoVement. Cuts can be made in so many areas:

- grouping together of municipalities with fewer than 5,000 inhabitants (immediately)
- modernisation and computerisation of the machinery of central government with a 30% cut in costs (in 5 years)
- put an end to every foreign peace mission, that in fact is a true military mission (immediately)
- elimination of Provinces (immediately)
- put a stop to the construction of useless infrastructure like the TAV in the Val di Susa, the Gronda in Genoa, the Pedemontana motorway in Lombardy (immediately)
- elimination of public financing of the publishing industry (immediately)
- elimination of official blue cars except for the President of the Republic and the President of the Council (immediately)
- elimination of electoral contributions to the parties (immediately)
- halve the external consultancy contracts awarded by the central government and by local government (immediately)
- recover the 98 billion euro that slot machine companies have failed to pay in taxes (immediately)
- cut by 2/3 the spending of the Presidency of the Republic (immediately)
- adoption and use of open source software within the public administration (immediately)
- bring parliamentary salaries into line with the European average (immediately)
- cut the number of parliamentarians by 50% (during the legislative session)
- renounce buying F35 fighter jets (immediately)
- with an efficiency/savings drive, cut health care spending by 1/5 (immediately)
- cut or sell off two of the RAI national TV channels (immediately)
- cut Expo 2015 (immediately)
- halve the salaries and halve the number of regional councillors (immediately)
- cut pensions above 5,000 euro gross a month (immediately)

Together with the cuts listed above, what needs inserting is the “citizen’s income” to be found in many parts of Europe, like Germany, for those who have no job.
It’s possible to make cuts. It’s possible to fly

You could find these posts interesting:

Give the Government your opinion!
Riccardo Iacona and the F35 in “La Cosa”
Cuts, remnants and offal

Posted by Beppe Grillo at 04:06 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 12, 2013

The landslide


The news of the arrest for international corruption of Finmeccanica’s CEO, Giuseppe Orsi, didn’t surprise me. Just as I wasn’t surprised by the collapse of Monte Paschi of Siena with a loss of 21 billion in value (a tiny hole ...) or to hear that ENI’s chief executive, Paolo Scaroni (*), is officially under investigation for corruption for bribes amounting to 200 million euro for contracts in Algeria. Fee-fi-fo-fum, I smell the blood of the party chums motivated by an atavistic and unquenchable thirst, that after occupying every space, and every armchair, are now denuding the companies managed by the Foundations in which they are present, as in the case of the Siena bank or they are carving up the companies in which the Treasury has shareholdings. Finmeccanica is the second Italian manufacturing group after Fiat. It has about 70 thousand employees and annual revenues of 17 billion and the Treasury has 32.4% of the shares. People have been appointed to Finmeccanica, (that is fundamental to the economic life of the country), not on the basis of merit, but as party nominees. "Every year, Lorenzo Borgogni, the manager for institutional affairs, went to the chief’s office and taking hold of the chart he opened out the organigram and discussed which names were to be inserted where. Rather than a discussion, as Borgogni explained to the prosecuting magistrate, it was the reception of “political orders". In this activity of parcelling out positions, there was an alternation of Ministers of the left of the Right, from the Lega and from the Centre. Borgogni talked about this with the prosecutors in their Rome office on 13 December 2011 and on 20 December 2011 Officially the people making up the Board of Directors are appointed by the Treasury, but in reality “they are chosen on the basis of political mediation inside the elements making up the governing majority". (**)
Rigor Montis, like a parrot on his perch, said this morning, after Orsi’s arrest " There’s a problem of governance that we will tackle." In more than a year when he has had an absolute majority in the government, he has obviously not found the time to do this. Let him get out from under our feet and go and take his dog for a walk in the park. He’s already done enough damage. Yes. Sure. There’s a big problem of governance, and thus of control, but who should have been watching over this, unless it’s the Treasury and thus the Government? Here rather than a problem of governance, there’s a problem of honesty of the so called managers and of who placed them there (in exchange for what?). There’s an enormous problem of the lack of a sense of the State. The country is sliding down the hillside. On 24 and 25 February let’s send them all home.

(*) In the 1990s, as Techint’s CEO, Scaroni made a plea bargain and was sentenced to one year and four months for corruption in connection with the kickbacks to get ENEL contracts.
(**) source: Espresso, 45/2011


You could find these posts interesting:

Beppe Grillo talking about Scaroni in 2008
Operation Ferragosto
Beppe Grillo at the shareholders meeting of Monte dei Paschi di Siena

Posted by Beppe Grillo at 04:36 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 01, 2013

Monte dei Paschi di Siena: let’s have the names!

>>> Today at 5:00 pm 1 February I’m in viale delle Sirene in Trapani, and at 9:00 pm, I’m in piazza Politeama in Palermo. Tomorrow 2 February at 5:00 pm I’m in piazza Maggiore in Bologna, and at 9:00 pm, I’m in piazza Grande in Modena. Follow the live broadcasts on La Cosa! >>>

For the scandal of Monte dei Paschi di Siena some frontline politician could end up in prison. It’s a very plausible hypothesis. A gaping hole of 21 billion (7 billion overpricing of Antoveneta, 7 billion in further payments abroad, and 7 billion in debt taken on as a result of the purchase, that’s 42,000 billion in old lire, twice the amount for Parmalat, a hole equal to 5 times the money generated by the IMU property tax). Without the go ahead from “the System” it’s logically and materially and humanly impossible. I don’t know what documents the magistrates have, but, if in those papers, there should happen to be the names of people who are to be Ministers in the future, it would be opportune for their names to come out before the elections. The problem is very simple, no government, no legislature, would cope with a judicial trauma that looks like being enormous in its extent and responsibilities, if top level people were found to be involved.

“Lo scandalo MPS e le domande che non vengono poste. Come mai?” {The MPS scandal and the questions that are not being asked. How’s that?}. by Sergio Di Cori Modigliani

It could be (and I feel it should be) “the mother of all Italian scandals”.
Here, once more, we are talking about the affair relating to Monte dei Paschi di Siena. They are already doing everything to tone down the affair, to camouflage it, to hide it, to conceal it and finally to shelve it.
In these last few days of the election campaign, they will come up with the strangest news items to divert attention and so that the general public will not question things and so that people will not insist on getting to the truth.
It’s up to us to stir the water to swamp the media (well at least on the web) with an avalanche of questions that it is our right to insist on getting answers to with immediate and relevant replies.
Without a doubt we would have found out more from Corradino Mineo on “RAI News 24”. That’s no longer possible: he’s the PD’s top candidate for Sicily. That’s something that is really intelligent (because the man is doubtless very intelligent but it’s also very relevant because he’s one of the greatest Italian experts on the ins and outs of our banking system). We would have been able to learn more by reading enthusiastic financial editorials in “Il Corriere della Sera” written by Massimo Muchetti but that will no longer be possible because he’s the PD’s chief candidate for Milan. We would (perhaps) have been able to find out more from another 25 people, but they are all candidates. Thus they will all stay silent.
Is this why they have been put forward as candidates (?) And this is why in the mainstream press we are not reading anything or getting any news. It would be enough to ask the right questions.


Final question to everyone: “How is it that a charitable organisation refuses to give credit to companies that provide work and employment but donates money to a party? ”.
The value of MPS’s shares is going up and the Stock Exchange is obviously pleased.
They have done their sums.
Wouldn’t it be splendid on the day after the elections, on 26 February, to be able to say: ”Gentlemen, you have done your calculations without the crucial element
We are the crucial element. Let’s not forget that.
Have a good week everyone." Sergio Di Cori Modigliani

Posted by Beppe Grillo at 08:27 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 29, 2013

Commission of enquiry for Monte dei Paschi di Siena


>>> Today, 29 January at 5:00 pm I’m in Catanzaro’s piazza Prefettura, and at 9:00 pm in Reggio Calabria’s piazza Duomo. Tomorrow 30 January at midday I’m in Messina, piazza Cairoli, at 5:00 pm I’m in Ragusa’s piazza San Giovanni, and then at 9:00 pm I’m in Catania’s piazza Università. Follow the live broadcasts on La Cosa! >>>

In 1995 the Monte dei Paschi di Siena bank was privatised. The organisation in charge was the MPS Foundation (with a 55% shareholding) with representatives of the municipality, nearly all of whom were associated with the PD that has governed the city since after the second World War (8 appointed by the city, 5 appointed by the Province, one appointed by the Region, the University and the Diocese). The Foundation lived solely on dividends and over time some shares were sold to various people like Caltagirone and Gnutti. In order to give money to its shareholders, MPS started to sell off its property including shares in banks (San Paolo, and Generali), whole banks like Cassa di Risparmio di Prato and real estate (the Fontanafredda estate, buildings on the Monte Mario hill in the north west of Rome) so they could give money to new shareholders but in reality these assets were the fruit of centuries of saving by the people of Siena. They stripped the flesh off MPS. The left wing has carried out its mission of handing over a public bank (that had been in operation since 1500) to the Stock Exchange and to the speculators. Before privatisation, MPS’s value was about 20 billion euro. Today it’s worth less than 2 billion and its share value is going down day by day.
Today 10,000 employees are at risk of losing their job. Ceccuzzi’s Cabinet for the city has been brought down. The Foundation no longer has the majority shareholding (it had to sell some shares) and what’s looking likely is nationalisation and the dismissal of perhaps 10,000 employees.

The story of the plundering

- Santander Bank buys Antonveneta for 6.6 billion euro

- Santander Bank realised it had made a dreadful mistake and demerged Interbanca from Antonveneta, valued at 1.6 billion, and looked for a buyer. The real value of the bank is about 3 billion

- A few months later, Monte dei Paschi buys Antoveneta for 10.3 billion

- MPS also takes on the burden of Antoveneta’s liabilities of 7.9 billion

- At that time, MPS was worth 9 billion and it bought Antoveneta that has half the number of branches (1,000 compared to 2,000) for a sum, 10.3 billion, that is higher than the value of MPS itself

- MPS does not have 10.3 billion, and thus gets into debt, the share value collapses


MPS makes other catastrophic collapses look like child’s play, collapses like Parmalat, and Banco Ambrosiano. As happened then, behind this colossal pillaging, there could be everything happening. In comparison, what Craxi did was like stealing sweets from children.

Posted by Beppe Grillo at 06:49 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 25, 2013

Beppe Grillo at the shareholders meeting of Monte dei Paschi di Siena


>>> Today, 25 January at 5:00 pm I’m in Livorno’s piazza XX settembre and at 9:00 pm in piazza Santissima Annunziata in Florence. Tomorrow, 26 January, at 12.30pm I’m in Ravenna, and at 3:30 pm I’m in the Giardini Pubblici, then at 7:30 pm I’m in piazza Cavour in Rimini. Follow the live broadcasts on La Cosa! >>>

Beppe Grillo at the shareholders meeting of Monte dei Paschi di Siena
“First of all, what’s struck me is the atmosphere. If you talk to a shareholder, he’s devastated because of his investment, he’s complaining and he’s furious. Then I notice a feigned air of calm from the presidency, from these gentlemen that I don’t know. I presume that there’s a public notary. You are giving the impression of being extraordinarily calm.
Like Dr Profumo, I come from Genoa. I know Dr Profumo. I know the sort of life he’s lived. He’s a former toll collector on the motorways. He worked in the evenings. He’s a self-made man. He’s a very important man. However, he’s someone who is absolutely not the right person to manage this situation, because he is under investigation for tax fraud. This was a thriving bank. It was an extraordinary bank. In 1995, it was as we could say, “privatised”. This term no longer has the meaning that it used to have. It’s been “politicised”. A party has come in with a foundation, appointed by who you well know - by the municipalities, the region, the province. People from the PD and from the former DS, that have governed this region for 40 years.
Right from the start, from that moment onwards, the complete destruction of this bank has been carried out. It was privatised , a public limited company, a foundation. It has started to open up to the market.
When people don’t have a grasp on the concepts, they talk about the market, but who is the market? The market that rejoices? The market that is amazed? Who loses? The “market” - it’s the usual sharks who come into the public limited companies, into all the companies, and here we’re talking about Caltagirone, and Gnutti. It’s always the same people. These people come in and invest and they want their dividends. To give dividends to these gentlemen, they have dismembered one of the most beautiful banks in the world. They’ve sold everything! Their capital, the banks, the buildings in Rome, the estates, the bank called “Cassa of Risparmio di Prato”. They’ve sold off the jewels and slowly but surely, they’ve stripped the flesh off a company that before the privatisation in 1995 had a value of 20 billion euro, and now we’re probably at a bit less than 2 billion.
Then what happened?


Thus I hope that you will try to stand up to these things. And I want, I would like, as a shareholder, as a citizen, as a person, to shed light on this, because this money is not there. Who has taken the money? So we’ll line them up in the dock and they’ll have to be put on trial by the general public, by the people with savings and by the workers, who mustn’t lose a lira and neither must they lose their jobs.
I’ve finished.

Posted by Beppe Grillo at 07:25 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 20, 2013

The three main Trade Unions and companies owned by the workers


>>> Today, 20 January, at 5:00 pm I’m in Piazza Vittorio Veneto in Matera, and at 9:00 pm I’m in Piazza Prefettura in Potenza. Tomorrow 21 January, at 5:00 pm I’m in Corso Vittorio Emanuele in Avellino, and at 9:00 pm I’m in Piazza Portanova in Salerno. Follow the live broadcasts on La Cosa! <<<<<<<<<<<<

Just like the political parties, the three main Trade Unions are responsible for the current situation of the economy. Is it so outrageous to say that? To state that the main Trade Unions are in alignment with the associated political parties is like shouting out "the king has no clothes on": it’s something everyone knows - except for Gargamel Bersani. The smaller Trade Unions and the FIOM have tried as hard as they could, even though they’ve been mocked and kept away from the forums of discussion, to represent the rights of the workers that today no longer have rights. They are the only ones that have got a saving grace. Can it be whispered that if the defence of the workers was the aim of the three main Trade Unions, then the three main Trade Unions have failed miserably? Today they are just ramshackle organisations, privileged interlocutors with the governments that have killed off the dignity, the safety, the social rights, and the health facilities gained through bitter battles lasting decades.
Companies and factories must belong, at least partially, to those who work there. That’s not utopia. It’s already happened and it’s happening now. Anyone who is taken on, must be able to become a shareholder with a tiny quota allocated by the company.
Here Alessandro Di Battista is today telling us a story with a happy ending, a great story about the rights of workers.

Companies have to belong to the people who work in them: here’s an example from Argentina

“In 1979, Luigi Zanon, an Italian entrepreneur started a ceramics factory in Neuquén, in Patagonia. He was well known in Argentina. His family had constructed the amusement park called Italpark at Recoleta, just a stone’s throw from the cemetery where Evita is buried. It’s the biggest amusement park in the continent. Zanon demonstrated excessive patriotism and the Italian flag was a prominent feature in the factory’s logo. The kilns used for manufacturing the ceramics and the roller coasters were all “Made in Italy”. In the first few years, the factory was given a lot of public financing and Zanon, a great friend of the regime, did nothing but thank the dictator Videla for making Argentina into a paradise for investors. While Zanon was enjoying a great life, the same could not be said for the factory workers who were slaving away in the factory for 16 hours a day without rights and without health and safety.
Is there anything in the world that is worse than an alienating job? Certainly: losing the job. The 1990s didn’t start off too well for Zanon or for Argentina. While Brehme scored a pretty doubtful penalty that caused the newly reunited Germany to explode with joy and Maradona and his mates to fall into despair, a 15 year old girl called Roxana Celia Alaimo, lost her life on a ride in Italpark which had not kept up its maintenance regime for many years.


All the same, the victory of the Zanon workers (in 2009 the government of Neuquén accepted their position and signed a revolutionary document that authorised the transfer of ownership of the factory from the old Mr Zanon to the FASINPAT cooperative) demonstrates to what extent it is necessary to question the “the dominating thought”, the thinking that goes on repeating that the only way to tackle the crisis is to cut the social State, or that a factory cannot be managed by the workers and that to do politics you have to be professionals. I no longer believe in “the dominating thought”. I no longer listen to the fatalists that tell me a project cannot come to fruition because nobody has achieved it before and that changing the world is an illusion. Zanon’s factory workers have achieved this. They are now the owners of a great factory. They have their own destiny in their own hands. It’s been hard. It’s been like climbing a mountain, but if you really think about it you just have to take one step at a time. " Alessandro Di Battista – author of “SICARI A CINQUE euro” {Killers for hire at five Euro} an investigation into the origins of organised crime in Latin America

Posted by Beppe Grillo at 06:19 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 18, 2013

The day Germany left the Euro


>>> Today, Friday18 January, at 5:00 pm I’m in Brindisi, Piazza Mercato, and then at 9:00 pm I’m in Bari, Palaflorio. Tomorrow 19 January, at 5:00 pm I’m in Lecce, Piazza Sant’Oronzo, and at 9:00 pm I’m in Taranto, Piazza Maria Immacolata. Follow the live broadcasts on La Cosa! <<<<<<<<<<<<

If it were Germany leaving the Euro instead of the PIGS countries, who would benefit? The first response is Germany but that’s the wrong answer. The explanation is given in the article in Zeit Online (translated into Italian by Voci dalla Germania - a blog revealing the German debate about the Eurozone).

"And if Germany were to listen to the eurosceptics and leave the euro? What would happen if Germany were to leave the euro?"
With a two thirds majority, the German parliament approves the exit from the Euro and the reintroduction of the D-Mark. Only the Greens vote against. The exchange rate is one to one. The president of the Bundesbank steps down from the ECB’s Governing Council with immediate effect.
Financial markets and exchange rates react immediately on the news of the German exit. From the rest of the monetary union there’s an inflow of liquidity into Germany. The new currency increases its value by 50% in relation to the Euro. One Mark now costs 1.5 €. At the same time, there’s a sharp decrease in the value of the State guarantees offered for the European Financial Stability Facility (EFSF). The same thing happens for the debts and credits with the ECB’s TARGET system: the Bundesbank asks for these to be immediately settled. At least at the start, the risks for the public accounts seem to go down. About 200 economists celebrate Germany’s new found freedom. On TV, Thilo Sarrazin states: "Germany doesn’t need the Euro."
In the rest of the Eurozone, the financial markets are in difficulty. After Germany’s exit, the ECB immediately moves its headquarters from Frankfurt to Paris. Meanwhile it announces the unlimited purchasing of bonds. In this way, the central bankers manage to control stock prices. The New European Central Bank reimburses all the Bundesbank‘s TARGET credits with freshly printed money. Calculated in Marks, they’ve lost a third of their value. The Bundesbank is obliged to record a massive loss in their accounts. The same happens with the reimbursement of German funds with the European Stability Mechanism (ESM). German public debt grows by an equivalent amount. After a few weeks of respite due to the exit from the Euro, many car manufacturers declare that their income from sales in the rest of Europe has collapsed. German cars are too expensive for the rest of Europe. Vehicle manufacturers ask for a fund for laid off workers and they start to let staff go. Shortly after that, the employers association states that the German economy is no longer competitive because of the increase in the value of the Mark and they plead with the German trades unions to accept a reduction in wages. After just three months, the Federal Statistics Office says that the surplus in the balance of payments has halved and there has been a collapse in the exports to the rest of Europe. In another TV talk show, Thilo Sarrazin says that he feels very good even without the Euro. In fact his income hasn’t gone down. In the rest of Europe, the other countries have more time to reach their savings objectives and decide to increase their ESM deposits, to compensate for Germany’s exit.
Germany goes into recession. The European Fiscal Compact is suspended and replaced with a Stability Pact.


Two years after the exit from the Euro newspapers say that Greece and Spain are booming, whereas the German economy is in difficulty. In a TV programme Thilo Sarrazin says: "I never suggested an exit from the Euro, at most I said that we don’t need the Euro."”

Posted by Beppe Grillo at 06:55 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 15, 2013

Opinion poll on urgent measures for small and medium sized companies


Without the basics, you cannot construct anything. The foundation of the Italian economy are the small and medium sized companies (SMEs) that in Italy have nothing much in the way of representation. They are the cows to be milked in a country that is getting ever more bureaucracy, where (inefficient) services only exist in theory for those who are entrepreneurs and the costs of competing, of having transport, of having connectivity, and of distributing merchandise, are higher than the average in the other EU countries. The State applies retaliatory laws in relation to those who produce, without realising that it is sawing off the branch from which it is hanging. The massive taxation of the SMEs is an incentive for the exodus of entrepreneurs. It is the bureaucracy itself that is by now an insuperable obstacle for anyone starting an enterprise. Here we either create companies or we die with the decline of the Social State. To get out of the darkness, we need to cut off the dead branches of the State, to eliminate the pockets of privilege, we need to eliminate delirious bureaucratic procedures and reduce the tax burden on the companies. As soon as possible, we need to put a stop to the flight of companies abroad and we need to create the conditions for attracting foreign investment and foreign companies to come here not to Austria, to Slovenia, and to Carinthia. Below is a list of measures that I believe are urgently needed for the companies, to prevent the definitive collapse of our country.

PS. The poll will close at 2:00 pm on 16 January 2013. Look at the results..

Posted by Beppe Grillo at 05:29 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 04, 2013

Dialogue between an ordinary Italian person and “the spread”


Photo: detail from a painting by Vladimir Kush

Dialogue between an ordinary Italian person and “the spread”

Ordinary Italian person: “Can you present yourself? I don’t speak English and I know nothing about economics.”
Spread: “I am the difference between the interest on a bond and that on an investment used as a benchmark. For example if a BTP {Italian government bond} offers an interest rate of 6% and the equivalent German government bond with the same due date offers an interest rate of 2%, then my value is 6 − 2 = 4 percentage points that can be expressed as 400 basis points."
Ordinary Italian person: “Thus you are a difference, the bigger the difference between our government bonds and those of other countries, the more we have to pay in interest"
Spread: "To spread means “to open out”, the more I open out, the greater the gap. I am a gap."
Ordinary Italian person: "Yes, but what’s the connection between me and you? I haven’t bought either Italian or German bonds."
Spread: “Your State lives on the sale of debt. It builds up about 100 billion euro of debt in a year. You are Italian, so you have joint responsibility. You cannot pull back. Anyone who buys your debt knows that there’s the risk of insolvency, thus they know that, basically, they could lose the whole or a part of their investment. The less confidence they have, the more they want in interest."
Ordinary Italian person: “Thus anyone buying German bonds considers them to be safe. He knows that he’s not risking his capital and he’s happy to get a low rate of interest."
Spread: “Yes. That’s right. The greater the inefficiency of the State, the more the State has to pay in interest. For anyone who’s buying, it’s like playing roulette. Do you remember Argentina and the tango bonds?”
Ordinary Italian person: “But the debt can just get bigger, or can it also get smaller? We’ve got to a public debt of 2,000 billion. What’s the limit? What is there apart from the spread?"
Spread: “I see that you are starting to follow what I’m saying. Apart from the spread, when the gap becomes an abyss, there’s the default. If you live on debt and continue to create it, because of your political irresponsibility, the interest rates go up gradually because you have to sell new government bonds to pay the interest owed on the existing ones and so bit by bit the debt goes up. The debt is a spiral. You are in the spiral.”
Ordinary Italian person: “How do we get out of the spiral?”
Spread: “You cut unnecessary spending or you renegotiate (“restructure” is a gentler word) the interest payments on the debt. Otherwise, the interest payments eventually eat away at the social State. Schools, hospitals and public services get closed down, street lamps get turned off, while the debt increases and increases."
Ordinary Italian person: “OK. But how is it possible that Rigor Montis has killed us with taxes and yet the debt is getting bigger?"
Spread: “The debt has got bigger because he took action on the money coming in to the State coffers, on direct and indirect taxation, causing the collapse of thousands of companies, destroying the real estate sector, and lowering consumer spending, and he hasn’t taken action on expenditure and efficiency. The result is that your economy has got worse. Just look at the ratio of GDP to the public debt that’s close to the value that Greece had two years ago.”
Ordinary Italian person: “Well, I don’t understand. If the Italian economy is falling to pieces, how come you are getting better?"
Spread: “Not only do you not understand economics and you don’t speak English but you still believe in fairy stories. My current value has nothing to do with your economy. Even a child can understand that. All the economic indicators for Italy are negative, at the worst levels since the end of the Second World War and I am below 300 points. So what have I got to do with your economy? Can I ask, are you one of those who only reads the newspapers, is that why you are asking me these questions?"
Ordinary Italian person: “So why has your value gone down?"
Spread: "’Vuolsi colà dove si puote’ {that has already been decided}, by the rating agencies, as your poet Dante would have said. However, I’ll give you a few clues. Rigor Montis has brought home hundreds of billions of your debt from the French and German banks and thus the problem of debt is becoming just a problem for you and thus I become ever less relevant. Once you have bought back 80 to 90% of your public debt no one will bother about the spread any more. This is Rigor Montis’s mission: to bring the debt back to Italy thus making the country poorer."
Ordinary Italian person: “Thus, as time goes by, you will disappear form the scene and we’ll be left with an enormous public debt all weighing on our own shoulders and no one abroad will buy it from us and to get it under control it’ll take decades and we’ll have to dip into the savings of the Italian people."
Spread: “He who lives by debt, dies by debt. Auf wiedersehen, my dear friend"

Posted by Beppe Grillo at 08:07 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 07, 2012

The indecency of the banks


“To buy something and pay for it with bank notes or coins is one of the most normal things in the world. And yet in Italy, there are those that want to make out it is in fact an uncivilised way of behaving. Look at Giovanni Sabatini, director of the Association of Italian Banks (ABI), coming out with the ridiculous idea that "the battle against cash is a real battle for civilisation". He’s clearly talking nonsense so that he can hide a very different reality: the banks earn something on all payments, apart from cash payments. For this reason they want to make people feel guilty if they are using cash With credit cards, ATMs and so forth they earn something on charges to the merchants, commission on current account transactions, interest payments (up to 24.9% a year), revolving credit cards and so on. Furthermore they oblige people to keep money in the account without needing to give them anything much in interest.
Italian banks have in fact invented the campaign of the war on cash. They have put together and financed the "War on cash" that spreads falsehoods like: "Cash is a thing of the past, costly, dangerous, polluting and inconvenient".
One of the leitmotivs of the banks, repeated parrot-like by Italian economic journalist, is that in this field, Italy is way behind the rest of Europe. Well, this too is a lie, as evidenced by the German Central Bank: in Germany 80% of purchases are paid for in cash. In fact the Deutsche Bundesbank has even organised a conference to defend cash (Bargeldsymposium, Frankfurt 10-10-2012, and this was obviously ignored by the Italian press.
Advantages of cash. Research workers and directors of the German central bank give incontrovertible proof that when compared to electronic payments cash is: more convenient, faster, more widely accepted, providing a greater respect for privacy, cheaper and more transparent.
The final point is really important: only by taking out cash and using it to make a payment have you got immediate control over your expenditure.


Overall it turns out that using cash costs less.
We could go on and on. In 2009, when the banks in Italy started off this “war on cash” campaign, Giampaolo Fabris wrote that " there’ll be a tendency for cash to disappear" (Il Sole 24 Ore, 21-12-2009, pag. 21). Once more the truth is re-established by the Bundesbank proclaiming "cash is a means of payment for yesterday, for today… and for tomorrow". In spite of what Italian bankers say.” Beppe Scienza

Posted by Beppe Grillo at 05:43 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 23, 2012

The death of the SMEs


Italian companies are dying like flies while what’s being discussed in Rome is how to save the parties and their beneficiaries, starting from the new electoral laws. A tailor-made, off the peg law for a Monti bis. A gentleman that is not putting himself forward as a candidate but who is already the new President of the Council by divine right in spite of democracy. Investing in Italy is no longer sensible, running a company is like a battle with a wind mill. Those running small and medium sized enterprises, the social fabric that holds this tottering country together, are the new Don Quixote that are fighting a battle that seems to be lost before the start. If they go down, the country will go down with them. When there’s no longer any direct or indirect tax revenue coming from the small and medium enterprises, the machinery of Italy will stop and the problem will no longer be political or economic but social. How many “soldier blue”s will be needed to maintain public order? Then what will be the point of byzantine discussions about elections, the majority premiums, the little premiums, primaries done by Mr Nothings and sold like tubs of washing powder by media propaganda? Here Italy is going up in flames and the new Neros are playing the fiddle.
The company Price Waterhouse Coopers has published a classification of SMEs in different States based on three indices: the number of tax obligations, the time needed to calculate and manage taxes and the tax burden. Italy is at position 131 in the world. It’s more worthwhile to start a company in Barbados (121), in Bielorussia (129), in Bosnia (128), in Cap Verde (102), in Colombia (99), even in Ethiopia (103) , Guatemala (124), Guyana (118), Iraq (65) , Moldova (109), Namibia (112), Nepal (114), Sierra Leone (117) and Uganda (93). An Italian SME has a tax burden of 68.3% and is subject to 15 taxes that involve 269 hours of work to sort out, which is about 33 working days. We are in the hands of madmen that have been released who state that they have revitalised the country by means of successes like the growth of the public debt, of unemployment, or inflation and of the collapse of production. Europe is always cited by the government "cicero pro domo sua“, to defend the interests and the privileges of the caste. In relation to taxes however, Europe is never the guide, as seen with the bringing in of the anti-corruption law false accounting, or lowering the tax burden for the SMEs. In. Europe. It. Can. Be done. Denmark is 13th with 27.7% taxes, Finland 23th with 40.6%, Germany 72nd with 46.8%, the Netherlands 29th with 40.1%, Great Britain 16th with 35.5%. All countries with services that are much more efficient and less costly than in Italy, States where bureaucracy is at the service of the citizens and not self serving and like a nanny. Here we either have to save the SMEs or we die. See you in Parliament. It’ll be a pleasure.

Posted by Beppe Grillo at 05:14 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 19, 2012

The crime of usury - Emidio Orsini


We are living in a “bancocracy”, the natural capitalistic development of the democracy entrusted to the banks that have even the power to appoint the man they want as premier. The blog is offering space to Emidio Orsini, the general secretary of the organisation called "Il delitto di Usura“ {The crime of usury} a non-profit virtual forum, made up exclusively of victims of usury and extortion by banks or criminals, as well as supporters, some of whom are anonymous.

Presentation by Emidio Orsini, National Secretary of the grass roots movement called "Il delitto di Usura" {The crime of usury}

“Greetings everyone. My name is Emidio Orsini, I am the National Secretary of a non-political movement called “Il delitto di usura”. When we are talking about banking usury some people ask me: “But how do the banks apply usurious rates of interest?” The banks have used the argument that certain circulars from the Bank of Italy have led them to make a mistake. When calculating the cost of money, they have never included the commission for the maximum amount overdrawn, thus the interest rate used is always a few fractions of a percent below the maximum allowed, as published every three months by the government. Then of course the borrower goes over the agreed limits and so the commission is applied as well as costs that are not legitimate and this goes way beyond the limits of the maximum interest rates allowed and thus the rates become usurious.
I want to talk about the many privileges enjoyed by the banks, because not only do they commit usury, but the banks have enormous privileges.


This would be a great source of relief for Italians who are now seeing starvation at the door. It’s a battle that we of the organisation “Il delitto di usura” have been fighting for years, in all the political, governmental and party institutions, but we have not been listened to. I really hope that some action will be taken as a result of these reports, because it is no longer possible to keep a people enslaved to credit institutions, and it would thus be better to nationalise them! "

Posted by Beppe Grillo at 09:52 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 28, 2012

The spiral of public debt


The Italian public debt is close to 2,000 billion. It’s galloping along at a rate of an extra 100 billion each year. 94% of the debt is what the State owes, whereas 6% is owed by local authorities. The story that the debt is due to us living above our means, is false. The public debt has not been growing in recent years because of too much expenditure. Just in 2011 alone, the State had a primary surplus of 16 billion, but the interest payments, amounting to 72 billion (in 2012 they’ll be more than 90 billion), have caused a deficit of 62 billion. It’s an infernal mechanism. Between 1980 and 2011, spending was lower than the tax revenue by 484 billion (thus we have been really virtuous) but the interest payments (on the debt of 2,141 billion), that we had to pay in that period, have made us poor. In the last 20 years, GDP has been growing slowly, while the debt has exploded. The ratio of public debt/GDP has increased from 98.5% in 1991 to 120% in 2011.
Who are the ones who own our debt? To whom are we paying the interest that is destroying the State’s budget? Only 15% are families, 40% are foreigners (and of those more than half are in France and Germany), 19% are finance funds and insurance companies, 20% are Italian banks and 6% the Bank of Italy (*). The public debt is regularly transformed into something for market speculation. When States sell new bonds to replace those that are coming to maturity, markets experience speculators who are contributing to price falls so as to bring about higher interest rates. It’s the usurer’s technique. Thus the debt becomes an opportunity to maximise earnings in the market at the expense of the nation. As a consequence social inequality increases. 11% of Italian families are living in poverty and 7.6% are at risk (**), from 2008 to June 2012 Italian families have been subjected to a hole of 330 billion euro (***). If financial powernbrokers use speculation to increase their earnings and they force governments to pay the highest possible interest rates, the result is recession for the State that’s in debt as well as their loss of sovereignty. After three years of austerity, Greece’s expenditure has gone from 180 billion to 150 billion and unemployment has gone up from 200,000 to nearly a million people (****). In the long term, the recession is destroying the country, but the debt is not getting smaller. The myth of growth that in time, is said to reduce the burden of debt, has been proved false. In 2012, Italy will have a fall of about 3% in GDP and for 2013, no improvement is expected. Globalisation relentlessly shifts production to the countries with lower labour costs. There is no compatibility between the environment and a model of infinite growth. . On average, each person in Europe is consuming 16 tons of stuff every year and that corresponds to 51 tons when taking into account the waste due to the production processes.
The spiral of increasing debt and
interest rates is making Italy disintegrate, together with other European States. There are alternatives. These are being put into effect by some countries in South America and by Iceland. The burden of the crisis has to be distributed across creditors (mostly banks and financial institutions) and citizens. There has to be a really fierce attack on speculation, the evaluation of the possibility of freezing interest rates for a few years, and the analysis of the items making up the debt to check on the legitimacy of each one. We are running into a wall and they are telling us there’s no alternative. The risk is that we are going to reach default in any case with the devaluation of the debt and the Nation impoverished and on its knees.

(*) figures March 2012
(**) Istat July 2012
(***) Il Sole 24 Ore July 2012
(****) elaboration of figures Ameco 2012
The article is from the document: "Debito pubblico - kit per la partecipazione di base“ {public debt - kit for grass root participation} by Centro Nuovo Modello di Sviluppo {Centre for a New Model of Development}

Posted by Beppe Grillo at 05:56 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 25, 2012

Piedmont has technically gone bust


Piedmont is up for sale. The banks are at the gates.

"Paolo Monferino the cabinet member in the Piedmont cabinet responsible for health services, has declared that the Region of Piedmont has technically gone bust because of the consolidated debt that’s close to 10 billion euro. That’s more than 2000 euro a head for every person in Piedmont. A big furore has broken out among the parties and the president, Cota has had to try and patch things up by saying that the accounts are under control because there are going to be cuts, rationalisation and the selling off of regional property.
Land belonging to the region will be sold off, the thermal spa at Acqui Terme, unused buildings like the one in piazza Castello in Turin, in the hope of getting together 220 million euro. We are very sceptical. And that’s not all. They are going to set up a real estate fund using the property that is not available. Not even the "spending review" dared to do so much. This relates to all those buildings that are currently in use by officers of the Region of Piedmont, or used by the health services and in the same buildings as the hospitals! These would be handed over to private owners, to "ethical" banking foundations. Like the “Fondazione San Paolo”, whose president is the former mayor of Turin, Chiamparino. We fear that this is the first step towards the privatisation of all the health services in Piedmont. The detailed application of directives from the Monti government and from Brussels is making the crisis worse. Austerity policies at a time of crisis do nothing but make the crisis worse. The enormous debt of 10 billion that started to build up with the cabinets led by Ghigo, Bresso and Cota has to be restructured with a programmed intervention lasting 15 to 20 years, not one lasting two or three.” Davide Bono, regional councillor MoVimento 5 Stelle Piemonte {5 Star MoVement Piedmont}

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Posted by Beppe Grillo at 03:25 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 18, 2012

Italian Expo 2015 "ad personam"


Forminchioni is a lame duck. He knows that. Another person, anyone else in his shoes, would have resigned after 17 years occupying the position as president of the Region of Lombardy with half the cabinet under investigation or in prison. He has hung on longer than the folk defending Fort Alamo. An massive defence, one that’s incomprehensible. If he’s going to resign, he’ll do it when it suits him and he has already claimed a politically oriented role after the next regional elections. The reason for this dogged resistance is perhaps his obstinate defence of his armchair for his role as the director general of Expo 2015 that he doesn’t want to give up at any cost: ""I have already explained that the appointment as director general of Expo 2015 is a decision made by the government to appoint a single individual. Thus they are free to choose who they want. They are not choosing the president of the region or the mayor just for the time being ". Expo 2015 is, basically, the transformation into building land of agricultural land in the area around the town of Rho with an enormous increase in value that should go to the investors including Arexpo, the company that has bought the areas where the Expo 2015 site is to be constructed. There’ll be participation from the municipality of Milan, the region of Lombardy, Milan Fair Foundation, the province of Milan and the municipality of Rho. The areas around Rho mainly belonged to the Milan Fair Foundation that "from 2006 took on a central role in the Expo 2015 Promotion Committee to bring the event to Milan. In April 2011, in complete harmony with the wishes of the local authorities (mainly the municipality of Milan and the region of Lombardy), the Foundation approved the transfer to Arexpo SpA - of those areas that it owned that are needed to build Expo 2015". The Milan Fair Foundation depends on the region of Lombardy that has powers to make appointments, to oversee and even to dissolve the administrative body. Milan Fair Foundation controls Fiera spa, a company that is quoted on the Stock Exchange that has signed a service agreement with Milan Fair Foundation. The second organisation round the table of decision makers for Expo 2015 is the 'ndrangheta that, according to public opinion, is controlling the movement of earth in the North of Italy. The evidence of this can be seen in the arrest of Domenico Zambetti, who is the regional cabinet member responsible for housing, elected with the votes of the 'ndrangheta in exchange for possible favours relating to Expo 2015. Is Zambetti really the only one? The third body at the table is the construction company CMC di Ravenna associated with the PDminusL, famous all over Italy for the contracts for the high speed train line (TAV) in the Val di Susa and for the “Dal Molin” military base near Vicenza. So far, CMC has been the first and only organisation to win a contract as a result of a tender process for Expo 2015 (with the work being assigned to the lowest bid). The Milan Office of the Prosecutors has opened an investigation into this tendering process because of the possibility that the bidding was not fair. There’s no emotional break. No one is giving up their place at the table.

Sicily Special: Today, 18 October, at 6:00pm I’m in Mussomeli (direct streaming)and at 9:00pm I’m in Agrigento (direct streaming).
Tomorrow, Friday 19 October, at 3:00pm I’ll be in Ravanusa, then at 6:00pm I’ll be in Favara and at 9:00pm, I’ll be in Sciacca
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Jobs for women

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manicitta_3DA.pngLe mani sulla città {Hands on the city} by G. Barbacetto and D. Milosa

The middle classes of Milan have tranquil lives, while the mafia bosses are owners of scores of leisure locations. Businessmen ready to transform themselves into ruthless criminals. The city is theirs. Beware of putting obstacles in their path.

You could find these posts interesting:

Expo 2015 and the parson’s nose
Pisapia and Expo 2015 - Gianni Barbacetto
Expo 2015: “Feed the lobbies" - Interview with Luca Trada

Posted by Beppe Grillo at 08:26 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

Italian Expo 2015 "ad personam"


Forminchioni is a lame duck. He knows that. Another person, anyone else in his shoes, would have resigned after 17 years occupying the position as president of the Region of Lombardy with half the cabinet under investigation or in prison. He has hung on longer than the folk defending Fort Alamo. An massive defence, one that’s incomprehensible. If he’s going to resign, he’ll do it when it suits him and he has already claimed a politically oriented role after the next regional elections. The reason for this dogged resistance is perhaps his obstinate defence of his armchair for his role as the director general of Expo 2015 that he doesn’t want to give up at any cost: ""I have already explained that the appointment as director general of Expo 2015 is a decision made by the government to appoint a single individual. Thus they are free to choose who they want. They are not choosing the president of the region or the mayor just for the time being ". Expo 2015 is, basically, the transformation into building land of agricultural land in the area around the town of Rho with an enormous increase in value that should go to the investors including Arexpo, the company that has bought the areas where the Expo 2015 site is to be constructed. There’ll be participation from the municipality of Milan, the region of Lombardy, Milan Fair Foundation, the province of Milan and the municipality of Rho. The areas around Rho mainly belonged to the Milan Fair Foundation that "from 2006 took on a central role in the Expo 2015 Promotion Committee to bring the event to Milan. In April 2011, in complete harmony with the wishes of the local authorities (mainly the municipality of Milan and the region of Lombardy), the Foundation approved the transfer to Arexpo SpA - of those areas that it owned that are needed to build Expo 2015". The Milan Fair Foundation depends on the region of Lombardy that has powers to make appointments, to oversee and even to dissolve the administrative body. Milan Fair Foundation controls Fiera spa, a company that is quoted on the Stock Exchange that has signed a service agreement with Milan Fair Foundation. The second organisation round the table of decision makers for Expo 2015 is the 'ndrangheta that, according to public opinion, is controlling the movement of earth in the North of Italy. The evidence of this can be seen in the arrest of Domenico Zambetti, who is the regional cabinet member responsible for housing, elected with the votes of the 'ndrangheta in exchange for possible favours relating to Expo 2015. Is Zambetti really the only one? The third body at the table is the construction company CMC di Ravenna associated with the PDminusL, famous all over Italy for the contracts for the high speed train line (TAV) in the Val di Susa and for the “Dal Molin” military base near Vicenza. So far, CMC has been the first and only organisation to win a contract as a result of a tender process for Expo 2015 (with the work being assigned to the lowest bid). The Milan Office of the Prosecutors has opened an investigation into this tendering process because of the possibility that the bidding was not fair. There’s no emotional break. No one is giving up their place at the table.

Sicily Special: Today, 18 October, at 6:00pm I’m in Mussomeli (direct streaming)and at 9:00pm I’m in Agrigento (direct streaming).
Tomorrow, Friday 19 October, at 3:00pm I’ll be in Ravanusa, then at 6:00pm I’ll be in Favara and at 9:00pm, I’ll be in Sciacca
Follow the tour as it happens on Facebook and Twitter!
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Jobs for women

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Posted by Beppe Grillo at 08:26 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 16, 2012

Companies going bust every minute


Small and medium sized companies are close to collapse. It’s a matter of months. The country’s production ecosystem is disintegrating. The banks, busy buying up State bonds on the international market and those recently issued, are no longer supplying credit to companies. Loans are in continual decline. The Government is not paying the debts of the public bodies amounting to 80 billion euro and this is an issue that Rigor Montis has put off until after the next elections in 2013. Meanwhile the companies are being throttled by the highest taxes in the EU and by the interest to be paid to the tax collecting body, Equitalia when they don’t manage to pay on time. Every day 35 companies are going bust. In 2011 11,600 went under. That’s the highest number since the crisis began. The prediction for 2012 is for 13,000 more to go under, that’s more than a thousand a month. This is the true national emergency. All the rest, even paradise, can wait. Rigor Montis’s action is aimed at saving the banks and avoiding the devaluation of our public bonds, but meanwhile, the country is dying. One company in four is closing down in the first three years of its life. The State is completely absent in the process of helping companies through their infancy, in fact, if it can, it assists in killing them in the cradle with a mad system of bureaucracy and taxes on presumed income. Although it’s almost impossible to start a company in Italy, it can be closed down in a flash. A company that closes down, leaves its employees and their families high and dry. In the wealthy region of Lombardy, a notable 2,613 companies closed down in 2011. A business owner who is tired of this baronial and feudal, scurrilous and oppressive State, can leave Italy for more civilised places, like Slovenia, Carinthia, Switzerland, that are welcoming them with open arms. Countries where communications infrastructure and postal services for example, cost less and function OK. The word "function" is one that the Ministers should be writing one hundred times a day on a blackboard to make them aware of the disaster that they and Rigor Montis are dragging us into. A country cannot "function" without companies. Does someone really believe that we can make a living just from services, pensions and public administration? Who will pay the bill? Passera, the Kinder egg? A company that closes down is a failure for the country. The State drainage pump is sucking up the life blood of the SMEs like a massive parasite. When the tax revenue from the companies and from their employees isn’t enough, (and it’s only a matter of time) the State will close up shop. Where they are creating a desert, they’re calling it growth.

Sicily Special: Today, 16 October, at 6:00pm I’m in Noto and at 9:00pm I’m in Augusta.
Tomorrow, Wednesday 17 October, at 6:00pm I’ll be in Piazza Armerina and at 9:00pm, I’ll be in Mazzarino
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The faces of the politicians

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Posted by Beppe Grillo at 03:55 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 09, 2012

The economists


The prophets could foresee the future, the Italian economist foresees the present. Live in the moment. Seize the moment. Liberalist, and if necessary statist. More State and less market in times of crisis, but more market (with its hand that is invisible to most people but very obvious for him and for the banks) and less State, if the Stock Market index goes up. Astrologists could happily be economists, however economists could not be astrologists. It’s a matter of reputation. In fact, wizards, sorcerers, soothsayers and necromancers are more reliable than any Italic economist. Every so often they take us for a ride. Parmalat, Seat, Telecom, derivatives, junk bonds, the explosion of the public debt, and speculative bubbles, have been unpredictable events for the economists. Known, but unpredictable. If an ordinary citizen with the common sense of a family man, warns of looming bankruptcy, he’s an alarmist that doesn’t understand the basics. With the economist you always have this doubt, this torment, this nagging thought: is he doing it on purpose, or is he really like that? Is it that he really knows how things will turn out, but he’s obeying orders from on high and keeps quiet to make sure he’s earning his daily bread, or whether he just doesn’t understand a thing. I’d reckon it’s because he’s careful to earn his daily bread. Successful economists become ministers of the Economy, opinion leaders on TV, economic journalists, and even political leaders. After a decade, when we’re on the brink of the catastrophe, they explain why we have gone bust. They claim no merit for Italy’s default, and to be fair to them, they don’t accept the blame either. They are the high priests of nothing, creators of economic theories that last as long as a fart in space. Like the nobility of once upon a time, the economists only discuss things with their equals and not with the plebs. They don’t want to go so low. The others can’t understand the complexity of economics and the intensity of the spread. The economist dealing with battles and government, above all government, is a natural optimist. GDP will grow in 2013. Unemployment will go down as will taxes. The country is already ready to take off again. The Italic economist has that mouth that can say whatever his master wants.

Posted by Beppe Grillo at 06:27 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 07, 2012

Unjust Equitalia - the lawyer Alberto Goffi


“There’s this social tension in relation to Equitalia because there’s a perception of injustice. Why is it that for 50 years there have never been acts of violence against the Finance Police or the Tax Collection Agency? Why is it that this is all happening with Equitalia? How is it that the State never asked this question? Why is it that the institutions pretend nothing is happening here? They have run a few adverts presenting some Act in Parliament, but there has been very little in terms of outcomes, and now the crisis situation will get worse in the next few months and the issue of tax collection by Equitalia will get worse and this will create more social tension. Alberto Goffi

Interview with the lawyer, Alberto Goffi

Defending people
To start off I’d like to say “ciao” to the friends of Beppe Grillo’s blog. Thank you for inviting me here. This is a social battle about justice. So it’s definitely a great honour for me to be here today. Anyway I’ve been engaged in this battle against Equitalia for many years now. Last year I wrote a book with the assistance of Antonio Lubrano. The income has been used to help the families in difficulty and to help so many people who have tried to commit suicide. We have seen so much desperation up close and personal. I want to tell you about that. First let’s have a look at what Equitalia is. 80% of the Italian population know it well. In 2010, 18 million of the 24 million families received a tax demand from them. Equitalia is a company belonging to the State. 51% is owned by the Tax Collection Agency and 49% is owned by the pensions body called INPS. It is led by Attilio Befera who is also the head of the Tax Collection Agency and by Mastropasqua who is the president of INPS and the vice president of Equitalia. Thus Equitalia is a State company and it basically has to gather in money owed to the State and to the local authorities, for things like rubbish collections as well as income tax. The regulations have changed and as of January 2013 the municipalities and the local bodies can collect their own taxes without having to make use of Equitalia. This is an important piece of information because I’m certain that many people reading this blog are administrators and they need to take action so that all the local authorities can get busy to organise their own payment collection service, because there’s a risk that if they don’t, they will just establish another contract with Equitalia from 01 January, even though this has been taken away from them because of the crookedness and the inefficiency they have caused.
It’s important to explain the reasons for this battle. Many people accuse me of defending tax dodgers. I’m a young lawyer in Turin. I’m the son of a skilled craftsman who has had experiences of this crookedness. For some time, my father has run a small business with two employees. For three years the company has been waiting for payments from the State. It got into difficulties and at one point it had to pay the initial sum it owed to the State multiplied by three. I started to ask around to see if my father’s situation were an isolated case. Unfortunately, I found out that thousands, in fact millions of people in Italy are experiencing something like this reality and thus tax dodgers are something completely different. I come from a family in which my father taught me to respect the institutions, to respect the rules and to be a good tax payer. But when it’s the State that hasn’t paid you what it owes for 3 years and you have to pay money to the State and you are a skilled crafts-person and you cannot cope with acting as a banker for the State, up comes Equitalia and applies sanctions on you with rates of interest that even make the initial debt go up to twice or three times the initial sum.
The tax dodger is someone who doesn’t declare their income to the tax authorities. In Italy, tax dodgers are not only protected, but they are super-protected. Just think of the Fiscal Shield that makes it possible for people who have shifted undeclared income abroad and then they bring the money back to Italy and only pay 5%. Today it’s possible for the people who haven’t declared their income to go to the Tax Collection Agency and negotiate the so-called “Agreement in full and final settlement“. I owed 100 but I do a bit of negotiating and in the end, if things go really badly, I end up paying 50. Whereas the people that I’m defending are honest tax payers that have declared everything, but at the time they have to pay their taxes in accordance with what they have declared, they are in financial difficulty perhaps because there’s been an illness in the family (in fact many people have had debilitating illnesses like motor neurone disease) or they’ve experienced a financial crisis, In Italy it seems that only the banks experience the crisis in the economy. So many crafts-people are finding that although when they submitted their tax declaration they thought they would be able to pay the appropriate amount, then at the point when they are obliged to pay, they didn’t manage it because of a fall in their turnover, or because they are still waiting to be paid money due to them from the State. Payments from the public administration can take anything from 180 days to 1,670 days and whereas the public administration tends to pay late it still insists that the tax payer should pay within 60 days. If the tax payer doesn’t pay within 60 days, that triggers penalties that can mean having to pay between 40% and 100% extra. This not is a democratic State. A State that doesn’t understand this, is a State that is light years away from its citizens and from the people who work every day.


Why is it that for 50 years there have never been acts of violence against the Finance Police or the Tax Collection Agency? Why is it that this is all happening with Equitalia? How is it that the State never asked this question? Why is it that the institutions pretend nothing is happening here? They have run a few adverts presenting some Act in Parliament, but there has been very little in terms of outcomes, and now the crisis situation will get worse in the next few months and the issue of tax collection by Equitalia will get worse and this will create more social tension.


Posted by Beppe Grillo at 05:46 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

September 27, 2012

The Regions of the pigs


Article 114 of the Italian Constitution says: " the regions are autonomous entities having their own statutes, powers and functions in accordance with the principles laid down in the Constitution."
Article 117 specifies the powers of the State: "The State has exclusive legislative powers in the following matters: foreign policy and international relations of the State; relations between the State and the European Union; right of asylum and legal status of non-EU citizens; immigration; relations between the Republic and religious denominations; defence and armed forces; State security; armaments, ammunition and explosives; the currency, savings protection and financial markets; competition protection; foreign exchange system; state taxation and accounting systems; equalisation of financial resources; state bodies and relevant electoral laws; state referenda; elections to the European Parliament; legal and administrative organisation of the State and of national public agencies; public order and security, with the exception of local administrative police; citizenship, civil status and register offices; jurisdiction and procedural law; civil and criminal law; administrative judicial system; determination of the basic level of benefits relating to civil and social entitlements to be guaranteed throughout the national territory; general provisions on education; social security; electoral legislation, governing bodies and fundamental functions of the Municipalities, Provinces and Metropolitan Cities; customs, protection of national borders and international prophylaxis; weights and measures; standard time; statistical and computerised coordination of data of state, regional and local administrations; works of the intellect; protection of the environment, the ecosystem and cultural heritage."
The Regions are bodies that are not at all autonomous and they have powers that are limited almost exclusively to the health service that receives almost all its budget. The rest is spent on infrastructure, salaries, missions, marketing festivals in costume, reimbursement of expenditure. Leading these bodies, there’s the governor who goes off to cut the ribbon for useless hospitals and his only power is to get the Region into debt. On 01 January, the debts of the Regions and the autonomous Provinces came to more than 17 billion euro (*), Lazio was in pole followed by Piedmont, Lombardy, Sicily, Campania and Sardinia. Having created Italy, the debts of the Italians have also been created. Who controls the spending of the Regions? The Court of Accounts? The industrious journalists that post-date their news as has happened in Lazio? The Government? Who? The Italy of the Regions is the caricature of a federal State, whose architecture is the part of a ferociously centralist State. An expenditure item, an excellent way of financing the parties by opening up the spending purse at the local level. The Regions came into being because of the profound differences between the peoples of our peninsular. They are completely useless. They need a complete rethink. What’s needed is a real transfer of powers from Rome to local authorities with spending eliminated or controlled by local people. Tertium non datur {there is no third way}. Lazio is just starting to open up Pandora’s box and the enclosure for the pigs.

Participate in the opinion poll about the Regions. It’ll finish at 2:00 pm tomorrow 28 September.
Look at the results.

(*) figures 01 January 2011

Contro l'industria dei partiti {Against the industry of the parties} by Ernesto Rossi

The parties are just power machines and that’s it. For them, money is everything and the programme is nothing.

You could find these posts to be of interest:

Parliamentary Commission of Inquiry into the debt
Billions owed to Sicily
M5S Programme for Sicily

Posted by Beppe Grillo at 08:03 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

September 20, 2012

The worst political class in the world


Almost 15 years have gone by since it was set up and the lack of action and the incompetence of a political class, more concerned with wasting public money and building cathedrals in the desert, is once more, making it likely that the region will miss out on an opportunity that is unlikely to come again, that is the opportunity to get the Sardinia’s Parco Geominerario up and running now. So much time has been wasted and who knows where a mountain of public money has all gone. So much money. Almost 500 million euro. With much less than half (200 million) and in a five year time frame, in France (and to be precise at a place called Lens) the "Louvre Lens“ is about to have its inauguration. We Italians are marvelling at it but, strangely, the date set for 4 December 2012 has never been subject to delays and there have not been variations to the costs while the work has been going on. They knew exactly how much the work would cost and how long it would take. For work carried out in Italy and especially in Sardinia, this is pure science fiction, worthy of an Asimov story. In 1997 Unesco recognised, the Parco Geominerario as a world heritage site because of its history and environment in Sardinia, but there is still no date for its inauguration while the money has obviously all been spent. Can you think of water being thrown into the driest desert? As usual, as for the management of public resources in Sardinia, things have once more gone like this and as usual, no one is accepting responsibility for it. On more than one occasion, Unesco has reminded the Region of the need to safeguard this priceless site and make it available to the whole world, but the politicians do not understand these things. We have a treasure in our own home, - but anyway, we can’t eat gold. MoVimento 5 Stelle Cagliari

Interview carried out by Dafni Ruscetta.

La Carta di Cagliari {The Cagliari Charter}
DR: We are here with Giampiero Pinna, a geologist with the Sulcis-Iglesiente region and he is currently the president of the Forum for the Associations and campaign groups for Sardinia’s Parco Geominerario.
GP: Together with the agropastoral sector, mining activity in Sardinia has been a significant part of the history of our region for the last 8000 years and it has had a particular impact on the culture and identity of the people of Sardinia.


The dream of the former miner
Silvestro Mocci (former miner): We are still fighting to have all this heritage that we miners have left in the Parco Geominerario. Up until now, nothing has been finalised. GP: The Sardinian community wants to see the launch of this park, it wants to have it start off again. It wants it to be a mechanism for development and for work opportunities in our region just as has happened for parallel initiatives, as has happened for the great mining areas of Europe. I’m thinking of the Ruhr, of the area to the north of the Pas-de-Calais in France, of Cornwall in England where the reclamation and the enhancement activities started off later than this project but all the same they have already had great results and have created thousands of jobs.
We believe that the park has great potential for economic development and this is what we are fighting for. Unfortunately we have to say that this shameful affair has become the emblem of ineffectiveness and also of the failure of this majority party, of this regional cabinet and added to that the total indifference of the Opposition, thus the whole political class of the region, lumped together in this massive display of incompetence that says so much and perhaps explains a lot about the great state of backwardness of Sardinia and the fact that a million and a half of the inhabitants can’t have any well-being and can’t have the satisfaction of their most basic needs, namely the possibility to work.
We are simply asking for the relevant institutions to perform their duty and make it possible to get to the start of this reform that also means working for the relaunch of the Parco Geominerario. That’s what we are asking for.
When we had battles to fight, there you are, giving support in these difficult times, there’s been the MoVimento 5 Stelle {5 Star MoVement} close by and I personally want to express heart felt thanks but also on behalf of all the groups and associations that are part of the Forum.
DR.: What’s your dream? What’s the dream of the former miners, of the miners who are retired?
SM.: Given that the miners are going away; the last generation of miners are my age. I’m 71 years old. But what we want is that this heritage that is left, is passed down to our offspring and to their offspring. This is the battle that we are fighting both here and at Villa Devoto.

PS. On 22 September there’s a public meeting in Parma and I’m going to be present. It’s in piazza della Pace and it’ll start at 2:00 pm and finish at 6:00 pm. The topic to be discussed is "Dies Iren -the end of the incinerators".

Posted by Beppe Grillo at 08:22 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

September 05, 2012

The retreat


In Europe the siren has been triggered and it’s saying "Each for himself and the euro for everyone". The continual manoeuvres, institutional meetings, European summits, new elections and removal of prime ministers that have been happening in recent years, have had a primary, and undeclared aim: to reduce the risk of France and Germany in relation to the countries that are in debt. Thus in relation to Greece, Spain, Italy, Portugal and Ireland: the PIGS. If it should happen that Italy or Spain were to default then the whole European economic system could in fact collapse. Even tiny Greece, with a GDP that is 3% of that of the whole of the EU, has put the stability of French banks at risk. Banks and foreign investors have sold off at any price the bonds of the PIGS and these have been bought by the banks of the PIGS thanks to a loan from the ECB to the banks to the value of a thousand billion euro. The debt is returning to the country that is owed the money while foreign investments in the PIGS are drying up. Since the financial crisis of 2008, the German banks have reduced their exposure to the PIGS by 301 billion and the French banks by 204 billion. Thus France and Germany are stuck at a crossroads. Germany has reduced its exposure to the Mediterranean countries and Ireland by 49.7% and France has reduced its exposure by 33.4%. In two years time, the risk due to the PIGS (and consequently due to the euro), will be down to zero. Perhaps, then their interest in keeping the so-called “single currency”, (“so-called” since it has been adopted only by certain European countries), will decrease. The exposure to PIGS for France and Germany has gone down by about 45 billion in relation to Greece, by 170 in relation to Italy, 153 in relation to Spain, 19.5 in relation to Portugal, and 119 in relation to Ireland. Doubtless this is good work, but it has happened while there has been recession in the PIGS that are sinking with higher unemployment and the closure of companies. The phenomenon of the selling off of PIGS bonds is accelerating. Just last year, about 10% of public bonds in circulation in Italy and Spain were sold by foreign banks and bought back by Italian and Spanish banks. Another loan of 1,000 billion euro from the ECB to the banks of the PIGS, (largely financed by the PIGS themselves!), and the problem will be solved. Euro or not euro!

Posted by Beppe Grillo at 05:04 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

August 23, 2012

Either Rome or Orte


Mario Ciaccia, the Deputy Minister of Transport and Infrastructure, has had a brilliant idea thanks to his time in office as a judge in the Court of Accounts (that in recent years has seen the public debt go up to 1976 billion euro without batting an eye). The idea is the partial defiscalisation of the Great Public Works as a way of getting the economy moving again. Not even Tremorti dared to do that! He said precisely: “In that way those projects that today are not bankable will be able to take off.” Bankable? In other words, projects that are not sustainable economically. And what might be these projects that are loss-making before they start? These bits of infrastructure that the country desperately needs? The Gronda? The TAV in the Val di Susa? A relaunch of the Messina Bridge? All the infrastructure projects to be carried out using the mechanism of project financing. Basically, if there happens to be no return on the investment, permission is granted to the companies to offload the costs of the so-called Great Public Works onto the State. Furthermore, usually the companies are financed by accommodating banks. Ciaccia, who has a British sense of humour declared: “I’m thinking of a total sterilization of the sales tax with an impact of 5-6 points on the GDP and the creation of hundreds of jobs." The State’s Confindustria applauded without hesitation. More GDP for all. The first of the Great Public Works that should get the country to take off again is the fundamental Orte-Mestre (never without that again), costing 10 billion euro, to great an interconnection with the whole of the Trans-European “Corridor 5” Lisbon-Kiev route. Then the stretches of motorway in tunnels or on viaducts with bridges, excavations and link roads and three-lane carriageways, that no one feels the need for, should be getting investments of 300 billion euro in 7 years. With tax reductions. And the whole of the final cost for all that will end up being paid for by the Italian people. The president of the Confindustria, Giorgio Squinzi said while in the grip of an orgasm: ‘’Acting decisively in using taxes as a lever to encourage investments in infrastructure is a choice that the Confindustria is fully in favour of (and I believe him, editor)''. These projects are not at all great and above all they have nothing to do with being useful. They will increase the public debt and they will drag Italy backwards. If the government has the financial resources, let it reduce company taxes (and especially for the small and medium sized companies), let it eliminate the “Irap” regional tax on companies, let it not ask for advance payment of the sales tax, let it make research project costs tax-deductible and let it pay back to the companies, the 120 billion that it owes them. This is needed to get the economy going again. Perhaps Rigor Montis doesn’t know this, and perhaps not even the Kinder-surprise-egg Passera knows this, but within the companies that up until now have developed infrastructure with the parasitical mechanism of project financing there’s 150/200 billion euro that could be offloaded onto the public debt in the immediate or slightly more distant future. The road to hell is paved with useless infrastructure to be paid for by the tax payer. See you in Parliament. It’ll be a pleasure.

Posted by Beppe Grillo at 06:55 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

August 19, 2012

Mr. Spock’s logic - Stiglitz and Gallegati


"There’s always an alternative", as Mr Spock said. The trick they are using is to have us believe that there is no alternative to the euro and to the growth of GDP. Beppe Grillo

Explanation by Joe Stiglitz and Mauro Gallegati

“What will happen if there’s a default and the euro is abandoned? How is it possible to come out of this crisis by exploiting the opportunity to change? We are not proposing new growth strategies, but a different way of living and producing. With that aim in mind, we are identifying a grass roots strategy (starting with all of us who are inhabitants of this planet) and a strategy starting at the top.
The decrease in the rate of profits in the real sector in advanced countries gave rise to an expansion of the financial sector that guaranteed the stability of the system until the bursting of the property bubble in 2007. The growth in profits led to the need to reinvest the savings that had been accumulated. The slowdown in the real economy in the advance countries has given rise to an outpouring of resources from this sector that is no longer remunerative, and giving incentives to the outsourcing of production and financial investment in activities that are ever more risky and more complex. The injection of liquidity on repeated occasions by central banks in America and in Europe has not produced significant positive outcomes for the real economy of western countries, while the banks have started speculating again thanks to the greater liquidity available to them and this is increasing their profits. Saving the banks with the subsequent nationalization of private losses, is important for the safeguarding of the savings of the middle class. However, we cannot exclude a public-oriented action by the State that has invested resources to save the system. Furthermore, saving the banks has not, on its own, solved the current crisis. In fact it has no impact on the fundamental problem, that is a divergence between growing productivity and flat or falling purchasing power. As well as that, because the banks have been saved by the governments, this has caused an increase in public debt, that is already high in certain countries like Italy. Thus one problem is to reduce the relative value of the public debt in relation to the GDP.
The route being taken by European governments has been to go for austerity. Some have proposed disowning the debt and leaving the Euro. By going back to a national currency it would once more be possible for each individual country to make use of monetary policy to provide a guarantee for public debt by using the intervention of their own central bank. This strategy could present a series of critical factors. The main one is that it would weigh heavily on the middle class, the same set of people who are now paying the sacrifices being asked for by the strategy of austerity. This group of people would be hit both directly and indirectly. Directly, given that State bonds are the main saving mechanism for small-scale savers (the importance of Italian State bonds in the portfolio of a big business that can afford to invest abroad or shift their activity to Luxembourg or to the Cayman islands is tiny when compared to the importance it has for the small-scale saver). Thus the default should be “selective“ to hit only the stocks held by certain groups (for example foreign finance houses) and still repay if they are owned by other groups (for example workers and pensioners). On top of direct effects, there would also be indirect effects. Leaving the Euro leading up to devaluing the currency (a new lira or a euro of the PIGS?), and thus making the country once more competitive, would lead to an immediate and probable sharp rise in inflation (raw materials like oil and gas would be much more expensive) and a worsening of purchasing power and in the standard of living.


Only if we manage to change the way we live today will we have a “tomorrow”. But to do that, we all need a campaign that helps us raise our awareness and that changes the way we do politics. As the groups like “Indignados”, “Occupy Wall Street” and “M5S” are trying to do. " Joe Stiglitz and Mauro Gallegati

[1] Crescita economica. Le insidie delle cifre {Economic Growth, the perils of statistics} by Giorgio Fuà;, Il Mulino, 1993.

Posted by Beppe Grillo at 06:50 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

August 14, 2012

The Autumn of the Economy


The farce of this government (but perhaps it would be more correct to call it a “receivership”), goes on. The litmus test is the public debt that continues to increase. It’s reached 1,972 billion. To celebrate the New Year we will raise our glasses to toast it’s having gone beyond 2,000 billion. The growth of the debt, the only growth that we in Italy can afford, brings with it more interest payments to be made and over time that means that any new taxes become useless. Basically we have paid the IMU tax and suffered an increase in what we are paying in taxes just to cover the interest payments on the new debt that has been accumulated in the era of Rigor Montis It’s like emptying out the ocean with a little bucket. The only exit route from a situation that will lead us first to an economic catastrophe and then to a social catastrophe is to reduce the debt and reduce the annual interest payments that we have to honour to avoid a default. In 2013, that’ll amount to 100 billion euro.
The debt can be reduced in two ways: by restructuring it or by draconian cuts to non-essential spending. The alternative of inventing new taxes, that has been used up until, is just suicide. Companies are closing down and the tax revenue is destined to collapse. However, cuts can only be carried out by one who can afford it and a person like Monti, who has been part of the System, since the time of Cirino Pomicino is not capable of shifting even a blade of grass (and I believe that he doesn’t even want to), never mind the Provinces, the golden pensions, the millions “guaranteed” to the concessionaires, the F-35 fighter jets, the elimination of financing to the publishing industry and to the parties and so on and so forth. If what Tremorti did was creative financing, what Rigor Montis is doing is mortuary financing. In 2012, hundred of thousands of companies have closed down and the owners of small and medium sized enterprises are enraged. Anyone who can, is leaving the country. It’s an exodus. But without the income from companies, where does this Government want to go? We will have millions of unemployed people on the street. The problem will shift from being about the economy to being about keeping the State on its feet and about public order. It seems as though we are in Autumn with the leaves on the trees and yet it’s just mid August.

Read the results of the blog’s opinion poll about cuts to be done.

Posted by Beppe Grillo at 06:24 PM in Economics | Comments (5) | Comments in Italian (translated) | Write | Sign up | Send to a friend

August 01, 2012

Merkel! What a wicked woman! - Beppe Scienza

Merkel! What a wicked woman!

“The Germans are not willing to act as a cash machine for the political class in Italy. They are not willing to cover the debts that the Italians have racked up. The idea of the eurobond is that it is something by which we get into debt all together and then we pay together. It’s a shame that, in these cases, the one getting into debt the most is Italy. The German are well aware of how politics works in Italy. They know that if they were to become a tap that is “turned on and here’s the money”, sure, the money would end up in Italy, but it would end up in the pockets of the various people like Penati, Formigoni, Belsito and their chums." Beppe Scienza

Interview with Beppe Scienza, mathematician and economist

The cash machine for Italian politicians
Greetings to the friends of Beppe Grillo’s blog. My name is Beppe Scienza and I teach at the University of Turin in the mathematics department. I deal with savings. It’s currently a hot topic because Italian savers are very worried about what is happening to their money and to their State bonds. For the last few months we have been witnessing a drama being played out by regime politicians and economists that follows a fairly classic plot,


Issues of malpractice
Now Germany’s position is that it’s OK to help States that are in difficulty, but a limit is needed, whereas the latest idea is that this European Stability Mechanism (ESM) should have the status of a bank. What does it mean having the status of a bank? It means that it can buy Italian State bonds.


Lack of trust in State bonds
The Germans have this style in politics. They know Italian styles. It’s understandable that they have strong misgivings about adding their signature to guarantee debts that would then be managed by a political class that we Italians know well, and thus the idea of becoming our cash machine.


Posted by Beppe Grillo at 05:49 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 24, 2012

The EU’s unloaded bazooka - Eugenio Benetazzo

The EU’s unloaded bazooka

“What’s needed is an immediate compulsory curb on Italian public spending, affecting the state employees and all the prestigious representational bodies that are political and also institutional and have a very significant impact on Italian accounts. Only by havi8ng a consistent resizing of the costs of the State, and of the Italian state administration, is it possible to think of creating the preconditions needed for a consistent lowering of the dozens of percentage points in direct and indirect taxes applied to individual people and to companies and then, after that to establish fiscal benefits by means of real tax exemptions in relation to incomes and profits for the big multinationals and for the big companies that might want to come and get established in Italy and especially in the regions of the South, thus providing employment without time limits.” Eugenio Benetazzo

Interview with Eugenio Benetazzo, independent economist

Planetary -scale economic depression
After last week’s terrible Friday in Europe, the Italian Stock Exchange once more put forward suggestions of dramatic performances, thus emulating what is happening in parallel markets, namely in Spain and Greece. By now there’s not much that can be left to the imagination. What’s happening in the world of finance is clear. The big institutional operators, as well as the ordinary operators and the small-scale savers are running away from a situation that by now is considered to be unmanageable. Thus they are getting rid of State bonds, especially those held by the banks whether they are Italian bonds or those of other European countries, because of the fear of a further worsening of the situation in Europe.


A plan for bringing recovery to our country
There is no doubt that the debt has an enormous proportion. But the debt itself is a variable that can be considered on a non-decisive static level. It’s its evolution and the capacity to manage to pay it back in time, that has been under discussion for the last 18 months when things are considered in the light of small and medium sized enterprises that are closing down because of bankruptcy, outsourcing and internationalization


Posted by Beppe Grillo at 07:37 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 20, 2012

Globalisation is the cause of the crisis - M. Gallegati and J. Stiglitz


“The economy won’t bounce back on its own, at least not in a time period that’s relevant for normal people. Monetary policy is not helping us come out of this mess. The FED has played a very important role in creating the current conditions, encouraging the bubble that has led to unsustainable consumption: anyone believing that monetary policy is about to get the economy to take off again will be pretty disappointed.” M. Gallegati, PhD and J. Stiglitz, winner of the 2001 Nobel Prize in Economics.

The reasons for the crisis, according to traditional economic theories
“The interpretation of the crisis that began in the second half of 2007 was based on traditional economic theories. In accordance with that approach, an unjustified optimism about shares and about risk, together with a regulatory system that was too weak, credit made available without adequate guarantees, as well as a monetary policy that was too elastic, all this together has given rise to a level of debt that is unsustainable for families, companies and banks. The inevitable collapse of stock markets has caused widespread bankruptcies, as well as domino effects and many balance sheets showing net losses.


An alternative theory for an unprecedented crisis
The intensity and the duration of the current crisis is beyond the normal range of the crises that have happened since the second world war (in spite of the fact that the interventions in relation to fiscal and monetary policy have been unprecedented in the history of capitalism), and there’s not even a glimpse of the end of the crisis. On the other hand, an article [Delli Gatti, Gallegati, Greenwald, Russo and Stiglitz, Mobility Constraints, Productivity Trends, and Extended Crises, Journal of Economic Behavior and Organization, July 2012] suggests a different way of looking at thngs and emphasises the relationship between cyclical and structural factors and explains why it is inevitable that the capitalist system generates a massive crisis. The basic cause of the current crisis was a structural change in the real economy: the decline in the earnings from industry due to what we normally consider to be a good thing, (the increase in productivity) as well as globalisation that has curbed the growth of wages and salaries. In other words: the industrial sector is the victim of its own success.


Monetary policy will not save us
This work gives rise to two conclusions. The first is that the economy won’t bounce back on its own, at least not in a time period that’s relevant for normal people. The second is that monetary policy is not helping us come out of this mess.


Mauro Gallegati and Joseph Stiglitz

Posted by Beppe Grillo at 06:27 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 06, 2012

Pygmies of Europe


If we keep on just discussing “spread”, “public bonds” and “bail outs” from morning to night, the EU will not take a single step forward. Meetings between the so-called leaders seem to be audits organised by the ECB with the participation of the ratings agencies. There’s only talk of financial instruments to avoid the crisis. Ever more frequently, the get-togethers are managed with the thinking of “here is now” and “for tomorrow there’s no certainty”. Yesterday, the maxi loan of a thousand billion euro to the banks to buy Italian and Spanish public bonds. Today, the anti spread, that’s like a new anti-parasite product, a financial DDT. Tomorrow, perhaps the eurobond and the further loss of national sovereignty for the PIGS. It’s like flogging a dead horse. Real policies for common development and an integrated Europe are not on the agenda. And yet, together with political convergence, these are the only reasons to stay together. The euro should be one of the consequences of the existence of the EU.
At a world level, it’s possible to compete only with massive investments, something that is impossible for each individual European State, perhaps even for Germany itself that is doing OK because of exports to the internal European market, but that could be overwhelmed by the crisis of the euro. Time and again there’s discussion about the effects of the crisis, but not of the causes. If Apple, a company, is worth the same as the GDP of some European countries, that must mean something. We are not asking ourselves why Amazon, Google, IBM, and Microsoft are all American companies, the reasons why 17 out of the top 25 world companies with the best brands, that are recognised for their global reach and for their quality, are technology companies. And why among the top ten, there are nine from the United States (first Apple, second Google...) and one is Chinese. Europe exports capital and public debt, but in terms of competition on the world market, it’s the pitching of pygmies against giants. We are at risk of becoming a market of consumers with a low cost labour force at the disposition of non-European multinationals. We talk about development, about the future, about synergies, of mergers and integration of the best companies in Europe, starting with telecommunications, computing, biotechnologies or we’ll end up at the bottom, even below Africa.

Posted by Beppe Grillo at 10:00 AM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

June 20, 2012

The debt from nothing


The Field of Miracles is near to the city of Catchfools. Here Pinocchio is persuaded by the two accomplices, the Cat and the Fox, to plant his gold coins. It’s said that the field has seen the growth of a tree full of coins in just one night. You know the rest of the story. The two swindlers steal the gold coins and run away. Collodi was prophetic. Substitute Pinocchio with the Italians (but also with the Greeks, the Irish, the Spanish, and the Portuguese) in place of the Cat and the Fox, place the ECB, Draghi, Monti, Passera and Merkel. The Field of Miracles today stands for the European banks, and the gold coins stand for the public debt. The debt is worth a lot more than the gold coins. It is created by magic and tends towards infinity. But, just in the same way that there’s no such thing as a free lunch, neither is there such a thing as a free debt. It’s paid for by increasing taxes, the collapse of social services, unemployment, cuts in investments, the new poverties. The State that gets into debt must pay the interest on the debt before it does anything else. To save Europe, the brilliant idea, worthy of a wooden head, the definitive solution, is that of burying in the Field of Miracles, represented by the banks, enormous quantities of debt. The 1,000 billion euro given by the ECB to the banks at the beginning of the year have in fact come from new debt financed through public bonds. The recent life jacket of 100 billion to the Spanish banks is also new debt. The banks are not bearing fruit, but they are not going bust. At the end of the day, this is the objective. The States will go bust first with a default, if they are allowed to go bust, or otherwise, with generalised poverty. Money from nothing creates omnipotence. You can generate it like a newbie Creator each time it’s needed. In the country of the Catchfools (you’ve guessed: it’s Italy) Passera can without a moment’s hesitation promise 100 billion euro of investments that he was keeping in the cupboard and Giarda states that it is possible to cut 100 billion in costs straight away and get up to 300 (so why then bring back the IMU tax?) We are rich, extra rich in debt. Basically we are unknowing ragamuffins

Posted by Beppe Grillo at 08:03 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

June 13, 2012

The Rhinoceros


The three people of “Ave Maria” or rather of “Extreme Unction”, have been called to account like little altar boys. They’ve been called by Rigor Montis who is insisting on “a strong mandate” for negotiations with Europe. He has asked this of ectoplasms evoked during a secret meeting that has been kept hidden from a country that is astonished while witnessing the privatisation of the State. Three parties on their way into decline, that will perhaps disappear after the forthcoming elections, have discussed our future with a gentleman that no one elected. It seems like Eugène Ionesco’s Theatre of the Absurd, where the rhinos run around undisturbed on the streets to the indifference of the institutions who sip tea and make bored comments like “Casini, would you like a slice of lemon?” or “Monti, one or two sugars? Cane sugar?” “Alfano, a drop of milk?” “Bersani, what is this noise of hooves charging along? The primaries?” The noise of rhinos increases and disturbs the low-key conversation. The spread is out of control as is unemployment. The GDP is negative. Naturally tax revenue is going down. Companies are closing or fleeing. The public debt is increasing as are interest rates. Everything is within normal parameters. Phrases that have already been said and heard many times to such an extent that they are taken for granted like phrases about the weather.
The endurance of the euro is under discussion. It’s not just Grillo that says so. Soros is giving it three months. Christine Lagarde, Head of the IMF, is giving it even less. I was slightly optimistic. I’m not against the euro in principle, but I believe that an exit plan has to be worked out in time, just in case it’s needed. No one wants to talk about it. The euro is taboo. A faith. The Government is not explaining to us the benefits of saying “yes” to the euro or of saying “no”. The value of a currency reflects the value of a country's economy. It’s evident that the German economy towers above the Italian economy. The Germans find themselves with a weak currency that greatly benefits exports. Italy, together with the PIGS that are getting ever more numerous, has a strong currency that is throttling it day by day. Germany is attracting European capital like a magnet. The State bonds of the PIGS are being sold in order to buy Bunds. Billions of euro are being shifted from at-risk countries into the German banks. in this chaos, 100 billion euro are being lent to the Spanish banks so they don’t go bust. In reality we are lending debts created with new public bonds. In economic terms, what does it mean to lend a debt? Is there a sane person who can explain it? We are in the hyper-space of reason. The EU is out of control and the euro is a box of dynamite with a fuse that is getting ever shorter. And we are sitting on top of it. Meanwhile, outside, the rhinos are multiplying.

Posted by Beppe Grillo at 07:11 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 15, 2012

Monti and the spring clean


source: Financial Times

Even Monti can do something right, the problem is that when he does, no one recognises its merits. So he gets demotivated, he gets sad and he calls in ABC for a game of snap at Palazzo Chigi (where it’s always Casini that wins). In April a law came in to forbid board members from having more than one position on the Boards of financial companies. A law against the conflict of interests and one that obliges people to give up 1,500 positions (that’s more than the locusts of the Nile), in the various Boards of the quoted companies as well as the unlisted ones. The Boards of directors are an orgy where it’s always the same people practising active sex, while the small shareholders restrict themselves to the passive part. This law, even though it’s a long way from being decisive, is at least a step forward in thinning out the ranks of the masters of the Stock Exchange. Quoted companies like Unicredit, Mediobanca, Generali, Mediolanum, IntesaSanPaolo were sharing some Board members among themselves. Bazoli, Bollorè, Doris, Nagel, and Palenzona have had to resign from multiple positions.
The Programme of the MoVimento 5 Stelle {5 Star MoVement} has other points relating to quoted companies including these:
- Abolition of the system of Chinese boxes in the Stock Exchange
- Abolition of multiple positions by the people on the Board of directors of a quoted company
- Introduction of structures that really represent people with small shareholdings in quoted companies
- Forbid the possibility of mixing up the holding of shares between the banking system, the industrial system and the news media system.
- Bring in the liability of financial institutions in relation to the products they propose with a share in the losses if there happen to be any
- Prevent the purchase of a company mainly using debt (eg. Telecom Italia) - Introduction of a ceiling for the salaries of managers in the companies quoted on the Stock Exchange
- Abolition of stock options
- Abolition of private “de facto” monopolies, especially Telecom Italia, Autostrade, ENI, ENEL, Mediaset, Ferrovie dello Stato
- Forbid the appointment of people with definitive criminal convictions (eg. Scaroni at ENI) as administrators in companies that either have the State as a shareholder or are quoted on the Stock Exchange
One of the problems of our economy is the lack of foreign investment. But who would play the game knowing that the cards are marked and the dealer is a cheat? Monti keep going. Bring in the Programme of the MoVimento 5 Stelle. As ever, advice is free!

> Discover the network of the people on the Boards of directors with "the Map of power"

Posted by Beppe Grillo at 08:27 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 27, 2012

The European earthquake


An earthquake has arrived in Europe. The seismic tremors are the forthcoming elections and the referenda. We’re heading for a confrontation between politics and finance. The national parliaments on one side and the ECB and the IMF on the other. On 6 May they are voting in Greece and the new Government could reject the agreements made with the EU to avoid default. In France, Hollande is the favourite. His position is to oppose cuts to social spending in accordance with European directives. Regarding the stability pact he declared “We must add a part on growth or we will not ratify it.” Marine Le Pen got 20% with a europhobic programme and that consensus cannot but have influence on the new tenant of the Elysée Palace. On 31 May there’s a referendum in Ireland about the new budget rules that Germany wanted, the "fiscal compact" that was approved in Italy without any consultation with the people, in the best traditions of a particratic State and not a democratic one.
Even where there are no elections in the near future, deep faults are opening up. In Holland, the Rutte Government has resigned because of predicted cuts to public spending. In fact without “austerity“ they would lose their triple A ... In Holland they are voting on 12 September. Geert Wilders’s anti-euro PVV could lose members. Where’s there’s been the application of policies of taxes and blood in the name of the euro, the results have been at a negative pace. There’s been a constant worsening. The public debt has increased, as in Italy, or the country has literally gone bust as in Greece where a silent default has taken place. It’s happened, but no one must say so (*). Today Standard & Poor’s downgraded Spain from A to BBB+. Basically that increases the interest due to those who buy Spanish bonds. The interest payments will be covered by cutting social expenditure. Everyone is poorer, but for what? To become butcher’s meat like the bulls in the bull ring?
José Ignacio Torreblanca, a professor at UNED University, yesterday wrote a long article in the Financial Times called "Time to say ‘basta’ to the nonsense of austerity". He writes "Next week it will be two years since José Luis Rodríguez Zapatero’s socialist government adopted the first austerity measures. These measures meant the electoral suicide of the Spanish Socialist party. Now the Conservatives find themselves in a similar situation: little more than 100 days after gaining power they have alienated citizens by pushing austerity well beyond their electoral mandate, only to find themselves as heavily penalised by the financial markets as Mr Zapatero was. What is outrageous is that, while Spaniards face recession and soaring unemployment, Jens Weidmann, the Bundesbank president and European Central Bank council member, sits back and says that 6 per cent interest rates for Spanish sovereign debt “are not the end of the world”. Equally worrying is that the European Commission happily endorses Spain’s severe cuts in education and research spending, deliberately ignoring the fact that these are incompatible with both the sustainable growth model ... Time to say: basta!”
What’s at stake is not just the Euro, but the outdated model of development and the destruction of social States. They will never give up. Neither will we. See you in Parliament!

(*) As Beppe Scienza will explain to us in detail in Passaparola on Monday 30 April

PS: Follow the 2012 electoral tour. Participate using the hash tag #m5sTour on Twitter and on Youtube or using the tag "MoVimento Cinque Stelle” on your photos and Facebook posts.

Today, 27 April, I’ll be in via Riva del Grappa 87 in Cittadella at 7:00pm, and at 8:00 pm in via dei Fanti (the old market area) in Rosà, and finally at 9:30 pm in parco Villa Fabris in Thiene.

Posted by Beppe Grillo at 05:36 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 26, 2012

The taboo of the Euro


When the Euro is put under the spotlight, the indignant reaction is a chorus of “We cannot leave the Euro”, as though Europe is identified with the Euro. It’s possible to serenely remain in the EU without having to do without one’s own currency. Of the 27 States making up the EU, ten have kept their currency, including Great Britain, Sweden, Poland, the Czech Republic and Denmark who are not risking any default. Another trick is the repetitive use of the term “single currency”. There’s is absolutely no single European currency. The Euro is limited to 17 States and those who are outside are taking good care not to enter the Euro zone. Who in Europe, is today in crisis? Right at the top are those countries with so-called “weak” economies that adopted the Euro. The question is “Weak in relation to whom?”. Obviously in relation to Germany. States like Portugal, Italy, Ireland, Spain, Greece and perhaps in the future France and the Netherlands cannot keep pace with the German economy. A currency should reflect the value of a country's economy. But anyway, the Euro represents the value of the Mark. A plan B is needed in case we need to go back to the Lira.
It’s not a matter of being hostile in principle to the Euro, but to be able to allow that. To remain in the Euro we are starving the country, strangling the companies, transferring the private wealth to cover the interest payments on the public debt that is (unfortunately) in Euro. If it were in lira we could resolve the problem of the debt with the devaluation of our currency. Since Rigor Montis decided to apply his solution of tears and taxes to save Italy, we have gone down deeper. About 140,000 companies closed down in the first quarter, unemployment has rocketed and the number of entrepreneurs committing suicide is no longer counted. The value of salaries has gone back to 1983 values. The IMU {local tax}, the renewed IMU and the Super IMU are knocking on the door. Italy is gasping like a beached whale. Even Draghi has understood this. In the face of the possible shut down of the Country, he has called for less taxation and sharp cuts in public spending.
If to remain in the Euro and pay the interest on the debt to the banks, mainly German and French, we have to kill the economy of our Country, perhaps it’s appropriate to stop and reflect. Especially if the public debt and the spread are increasing anyway while we are being strangled. The Euro must not be a taboo.

PS: Follow the 2012 electoral tour. Participate using the hash tag #m5sTour on Twitter and on Youtube or using the tag "MoVimento Cinque Stelle” on your photos and Facebook posts.

Today, 26 April, I’m in Piazza Filopanti in Budrio at 7:00 pm and at 9:30 pm I’m at the monumentali Trepponti in Comacchio.

Posted by Beppe Grillo at 06:47 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 21, 2012

Euro: mission impossible


By now we are living in order to pay the interest on the public debt. It’s a furnace in which bit by bit we are incinerating social services, new taxes, savings, homes, and rights. While we are fuelling this blazing bush we are getting poorer. The poorer we get, the more the debt increases and the more the interest on the debt increases. After six months of Monti’s treatment, the public debt has grown and it’s approaching 2,000 billion while employment figures have gone down and for this reason, inevitably, the tax revenue in 2012 will show a sharp drop. In 2013 we’ll have to pay more than 100 billion euro in interest on the debt, that’s about a quarter of the 420 billion paid in taxes each year. We are going into a spin like an aircraft that’s plummeting in order to pay the interest accumulated by the PDL and the PDminusL during a calamitous twenty year period.
To whom are we paying the interest? Only 14.3% of the public debt is held by Italian families. Whereas 85.7% is held by banks, funds and insurance companies and other investors. 46.2% is abroad, mostly in French, German and English banks (*). Banks are the new masters, not at all willing to give up their pound of flesh. For example, to reduce the interest payments or to stretch the time frame for paying back the capital. Italy does not have monetary sovereignty. It’s not possible to devalue the lira and to thus have a realignment of the prices of bonds in our economy that is worth a lot less than it was when the bonds were issued. Devaluing the lira is equivalent to devaluing the bonds. Now that is no longer true. We have a noose round our neck that we cannot remove and that is getting ever tighter unless we restructure the value of the shares that are worth 20/30% less than their initial value. Without the loan of a thousand billion from the ECB to the banks at an interest rate of 1%, used to buy new shares at 5%, Italy would be in pre default.
There’s no use in putting off the problem. To decrease the interest payments on the debt in the medium term and at the same time issuing new State bonds with low or medium return is "mission impossible". The blackmail is always the usual one. If we don’t keep going with this route, we exit from the euro. But we have already left the euro. The euro no longer reflects the value of our economy, only 60% at the most. To exit from the euro must not be a taboo. Great Britain and Denmark are part of the EU and they have kept their currency. It can be done. We need to start discussing it. I’s never too late to turn back from the smooth path leading to hell.
(*) source: Bankitalia

PS: Follow the 2012 electoral tour. Participate using the hash tag #m5sTour on Twitter and on Youtube or using the tag "MoVimento Cinque Stelle” on your photos and Facebook posts.

Today, 20 April, I’ll be in piazza Petazzi in Sesto San Giovanni at 7pm, then in piazza Cavour in Como at 9:30pm.

Posted by Beppe Grillo at 08:17 AM in Economics | Comments (7) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 13, 2012

Article 18 bis


There’s a lot of discussion about the cost of labour and of flexibility, about altering article 18 to relaunch the economy, but what’s ignored is that the cost of labour is increased by various taxes and contributions that are worthy of a loan shark, that are among the highest in the world, and that Italian salaries are among the lowest in Europe In any company there are three sets of people in the discussion: the entrepreneur, the worker, and the State. Like the bank, the latter always rakes the money in and, not being satisfied with that, it even gets you into debt without your knowledge. The entrepreneur isn’t moving abroad because of what he’s paying out to his employees, but because of the taxation on employing labour without even considering other reasons for the love of the fatherland, like the bureaucracy and corruption. Results of Eurostat research on the euro (*) confirm the low salaries in Italy. Average gross wages in Italian manufacturing industries are 17 euro per hour, that’s 3.5 euro less than the average of 20.5 euro in the Euro area. We come below everyone except for Spain, Greece and Portugal. In Germany the average is 9.10 euro higher, in Belgium 7 euro higher, in Ireland 6.4 euro higher, and in France 5.1 euro higher. From March 2012 the situation has got worse with the addition of the local taxes for employees and pension contributions for employees and companies. In Italy, companies are taxed even if they are making a loss as they have to pay IRAP {the local tax based on turnover}. It’s the marvellous world of taxes. A tax that’s proportional to the total value of the invoices and not the profit of the activity.
When a company recruits an office worker or a labourer, in reality they are recruiting the State. Pay two, get one. In these conditions it’s difficult to stop Italian companies from leaving, often for reasons purely of survival. Instead of getting fixated with article 18 and the opportunity to sack people freely, what’s urgently needed is a new article 18 bis to reduce the tax burden associated with employees and the companies. IRAP (the local tax based on invoiced values) has to go. Wages and salaries have to be brought into line with the average in Europe. The State must give absolute priority to the small and medium enterprises to stop them from moving abroad. Italy is becoming a production desert. A mule carrying an incredible load, can be brought crashing to the ground by just one extra piece of straw. It’s the time for cuts, dear Rigor Montis. Start with the most unproductive and damaging businesses in the country. Start with the parties and the newspapers that together cost almost a billion and a half euro. They will never give up. Neither will we. See you in Parliament!
(*) 2008 data

PS: Follow the 2012 electoral tour. Participate using the hash tag #m5sTour on Twitter and on Youtube or using the tag "MoVimento Cinque Stelle” on your photos and Facebook posts. Today, 13 April at 7:00pm, I’ll be in piazza Repubblica in Jesi. At 9:00pm, I’ll be in piazza Del Comune in Fabriano.

Posted by Beppe Grillo at 07:15 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 11, 2012

The bottomless pit of taxes


Taxes are really beautiful.” So said Padoa Schioppa. However I would add: “It depends on the use they are put to.Taxes to buy bomber planes, to finance fictitious peace missions in Iraq and in Afghanistan, for the reimbursed election expenses amounting to a billion euro to the parties, for the hundreds of millions of funding to the newspapers? For the annuities to the parliamentarians that are accrued after one term of office, for keeping the provinces going, for the costs of the Quirinale Palace like those of a renaissance monarchy, for the Great Useless Public Works like the TAV, the Gronda or Expo 2015? For the maxi remuneration packages of the parliamentarians, of the regional or provincial councillors, for the double and triple pensions, for hundreds of thousands of dark blue official cars? I could go on for hours. Up until now, there has been a tacit pact with the State. I pay and in return you provide me with services. The taxpayer has not worried about where his money ends up, for two reasons, the first is that the level of taxation was manageable whereas now you are just working for the State until well into August, the second reason is that the services were acceptable or at low cost. Now this is no longer true. The services are disgusting and we are paying for them twice over with private schools, private hospital, security at our own expense with security doors, alarm systems and bars over the windows. One of the top expenditure items are the interest payments on the public debt, amounting to about 100 billion a year. We are paying for them with our taxes. But why have we got into debt to the value of two thousand billion? To do what? Has someone asked our permission to bring us to this state of poverty? While Rigor Montis acts as the receiver, the one who has caused the bankruptcy of the country is still a free man, spouting out bullshit.
It’s' right to pay taxes. It’s right that everyone pays a proportion of their income. It’s not right to work like slaves at the time of the Pharaohs to see the fruit of our work squandered by presumptuous and incompetent people at best, corrupt and thieving people at worst, who pass themselves off as statesmen and who offer us their recipes for the crisis in the early evening TV programmes. The Pact with the State has to be re-examined soon and with other interlocutors. If for example there were to be a doubling of the tax revenue, I am more than certain that, without changing the rules and giving the citizens the possibility of examining the benefits of the mechanics of public spending to make decisions on the basis of online referenda, for example for the intervention in Afghanistan, or the abolition of the Provinces, the situation would get worse. Greece would seem to us like Paradise. The State accounts would get worse. It’s like throwing money into a bottomless pit. We need to introduce the concept of the destination of where our taxes are to be used. I’ll pay if I know where my money will end up. The time of trusting the word of this lot is way in the past. They will never give up. Neither will we. See you in Parliament!

PS: Follow the 2012 electoral tour. Participate using the hash tag #m5sTour on Twitter and on Youtube or using the tag "MoVimento Cinque Stelle” on your photos and Facebook posts.
Today, 11 April at 3 pm I’m at Caffè Minotti in via Marittima, 309 in Frosinone. At 6 pm I’m at the market of Marina di Cerveteri in Cerveteri and at 9 pm I’m in Fratti (ghetto) in Civitavecchia.

Posted by Beppe Grillo at 07:58 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 10, 2012

The disappeared worker


The concept of the “precarious worker” brought in with the Maroni law, when Maroni was Minister of Labour, the law that Maroni labelled with Biagi’s name, was to facilitate the employment of the younger generations. Instead it produced the highest rates of youth unemployment since the war. We have got to a third of young people and we are moving towards half if we include the Italians who have emigrated abroad in the last few years. The migratory flow of our young people, one million two hundred thousand, mostly people with degrees and diplomas, has been second only to Romania.
In Italy, engineers, physicists and mathematicians have landed up on a long term basis in call centres selling the services of this, that or the other company over the phone. With starvation wages. With no possibility of thinking of the future or of having a family. They have often been living on their parent’s pension. Meanwhile many, very many companies have shifted production abroad with a further loss of jobs. Immigration into Italy of millions of people from the East and from Africa engaged at low wages in the building industry and in agriculture has kept down the wages of farm labourers, factory workers and various skilled workers. Less work and less money for farm workers and labourers, but more profits for a few, particularly for the big construction companies closely connected to the parties and to the Great Useless Public Works. Not a trace of development, and no one could be bothered at all with innovation. They recite the usual liturgy of the brain-damaged person: “Work, Grow, Work, Grow” that means absolutely nothing. Who are we competing with at an international level these days? With the concrete companies?
To get round the problem, they are now thinking of making it easier to sack people and so are rethinking article 18. So the companies from all over the world (starting with the Chinese companies) will be able to invest in Italy. That’s what Rigor Montis says. We already know how things will end up. The phenomenon of being “precarious” as well as unemployment and the social instability that has struck 4 to 5 million people in their twenties and thirties, will tomorrow be extended to those in their forties and fifties. On the other hand, the pensions of the old folk who have kept everything going, are going down in value as they get phased out and because of inflation are worth ever less. And to this dramatic situation, there’s the addition of 350,000 people who are nearly sixty years old who have been “exited” and who won’t receive a pension for 7 or 8 years and who no longer have a job. The ones who are OK are those in their sixties, seventies and eighties, the average age of the politicians. Once they’re dead , the country will no longer have pensions, work or even workers.

PS: Follow the 2012 electoral tour. Participate using the hash tag #m5sTour on Twitter and on Youtube or using the tag "MoVimento Cinque Stelle” on your photos and Facebook posts.
Today, 10 April, I’m at Bar Dalì in Acerra at 6 pm - at Villa Avellino in San Giorgio a Cremano at 8 pm and in Piazza della Repubblica in Pozzuoli - at 9 pm.

Posted by Beppe Grillo at 08:40 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 05, 2012

Italy illegal operation


They need to face up to reality and tell us what the situation is. And things are bad. Really bad. This year, public bonds with a value of 450 billion euro , will fall due. A quarter have been bought mainly by Italian banks thanks in part to the loan of a billion euro from the ECB. There are still bonds to the value of 330 to be placed in 2012 if there is not to be a collapse. The banks are no longer making loans as they have to buy the public debt to stop the country from defaulting. This is why they are not providing finance to the companies. Meanwhile, obviously, we cannot create a new debt to be financed with the issue of more public bonds. And this brings us to the arrival of Rigor Montis’ cure between two possible routes: cut costs or increase taxes. He’s chosen the latter. An inevitable choice. Anyone who is inside the System cannot reform the System. Thus things that are not on the government’s agenda are cutting out the Provinces, cutting the salaries of parliamentarians, cutting out financing to the newspapers and the parties, cutting the Great Useless Public Works (Gronda di Genova, TAV Val di Susa, EXPO 2015 in Milan, etc.), the American fighter bombers, the “peace missions” abroad, bureaucracy. The 30 billion finance package dated December 2011 is hitting the country violently with the reduction in salaries from March and the increase in the prices of electricity, petrol and consumer goods. The IMU property tax and the increase in sales tax will make the situation worse. And we are just at the beginning.
The small and medium sized companies are going bust because of a lack of liquidity. It’s a “chain letter”. If I’m not paid by my client I cannot pay my supplier who in turn cannot pay his suppliers. And the first one not paying is the State that owes 100 billion to the companies. The State is not honouring its debts for a simple reason: it doesn’t have a euro in its coffers. The Italy Machine is grinding to a halt. Anyone producing wealth is closing up shop, is going bust, is committing suicide or is moving abroad. The number of people unemployed is increasing. The overall effect means there’s a brake being applied to spending and the economy of such proportions that have never been seen before. We are in recession and to get the country to take off again the only objective is to make it easier to sack people with the “restructuring” of article 18. To get to the end of the year, Rigor Montis will be obliged to bring in other recessionary measures, but they won’t be enough. The reassurances given by the trio Monti, Fornero and Passera have the appeal of a colonoscopy. Vis pacem, para bellum. Let’s get ready for the worst.

Posted by Beppe Grillo at 04:32 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

March 27, 2012

The entrepreneur’s resignation


“Dear Beppe, I am the owner of a small business and I’m about to hand in my resignation to myself. It’s something that is really difficult for me and it really troubles me. At night I feel a weight on my chest as though someone were sitting on top of me. I have a small service company with 20 people. Or perhaps it’s more accurate to say that the company owns me. For years I have devoted 12 hours a day to it. On feast days, “just” 4 or 5 hours. I have held out until now partly because of pride and partly so as not to push a score of families out onto the streets. It’s tough looking into the eyes of someone who for years has tried to build something with you and to say “It’s over!” I have never had any help from this State, but just checks over minutiae, taxes, and bureaucracy. I’ve always paid my suppliers regularly, if I’ve been late, it’s only been a week or two, perhaps a month in times of real need, but the State insists that I pay the sales tax in advance on the invoices that I issue and that in some cases are not paid until the cows come home, and in some cases never. And what can I do? A legal action for an unpaid invoice? And how much will it cost? If you have a debt that you owe to the State you have to pay promptly. If on the other hand the State owes you money, you can die of starvation or as suggested by Minister Passera, you could be paid in Bonds based on the Public Debt. What can I do with them? Shall I give them to my child so he can play with them like cigarette cards? Do I pay my debts with State Bonds? Clients are months late i paying and I understand them. The banks refuse to give me an overdraft to cover the costs of 2 or 3 months of activity even though I have always ended up with the accounts balanced or even with a profit, not a lot but at least some profit. What’s the use of banks if they don’t support the companies? For me they could close down. Thus for more than a year, I’ve not just been a business owner but also a bank. I don’t want to get into debt with loan sharks. I leave any income due to me in the company. That way I’ve managed to pay (on time!) the salaries of the people that work with me. I’ve realised that I was living like an automaton to pay taxes to my hidden partner, the State. It dawned on me that I’m working without pay and in reality it was I who was financing (?!) the activity and that in order to live, I’ve been eating into the savings left to me by my parents after a life spent working. It occurred to me that I’m spending only scraps of time with my family and never in tranquillity, but I’m always worried and on edge for due dates and for contracts. I wasn’t born to be a hero. For now I’m closing down my small company and I’m asking my colleagues for forgiveness. I have always considered them to be colleagues and not employees. Greetings!” Massimiliano R.

Posted by Beppe Grillo at 05:37 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

March 22, 2012

Monti's razor


It was a spring day. Rome’s hot sun was already announcing the summer. The second Vday in Turin was already behind us. I had been invited to lunch with the American Ambassador in Rome. It had never happened in my whole life. I accepted. Around the nicely laid table in a room full of light there were about ten people. Polite, friendly but above all curious to know the reason for the sudden creation of a new political movement. They surprised me. They declared that they always read the blog articles and that they placed the daily post in their press review. In the conversation I absent-mindedly mentioned "Topo Gigio..." and when I tried to explain who he is, a civil servant exclaimed "We know who is Topo Gigio, is Walter Veltroni!". Crikey - that’s a great thing to hear.
While commenting on the economic situation in Italy, no one mentioned Article 18 in relation to investment in Italy by companies from the United States. I believe that they didn’t even know of its existence. They were however, very downhearted in relation to the bureaucracy that’s Byzantine and incomprehensible for an American (probably for anyone) covering the abnormal corporation taxation that discouraged any investment in Italy and the laws that didn’t provide protection for companies.
Today, a few years later, seeing Rigor Montis explaining that by taking away workers’ rights, foreign investment will return to Italy, I feel as though I’ve been taken for a ride. Do we really believe that a company in Wisconsin or in Texas will rush to Italy because they are finally free to sack a guy from Bergamo or one from Apulia? And so I’m looking for an explanation, the most logical one in accordance with the principle of Occam's razor “Other things being equal, a simpler explanation is better than a more complex one." The most logical explanation is that the abolition of Article 18 will lead to the easy sacking of people from the big companies, with the blessing of “Minchionne”, and in the public administration, starting with the “precarious workers”. The public debt will be offloaded onto the workers. "Rigor Montis..." "We know who is Rigor Montis. He is an employee of Goldman Sachs.!"

Posted by Beppe Grillo at 06:45 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

March 20, 2012

We’ll eat them alive


“We’ll eat them alive When this crisis comes, it knocks on the door and the door is opened. We’re not expecting anything else. If necessary we’ll knock down the door. It happened already in 1943 and it will happen again and even more so. We no longer have anything to lose but we’ve got used to things.. That’s us. The ones with their noses in the air don’t know what a true crisis is. They have to be afraid of it. Those of us that haven’t studied at “La Bocconi”, have not gone to work with daddy’s firm - or mummy’s firm. We haven’t been arse-licking to get a career in a party or in a government office. No one has recommended us and we have never looked for recommendations. We are still here and we are angry just to annoy you. We are not asking you for any handouts nor are we going to have a discussion about workers rights with that scrap heap Ms Fornero. We’ll eat them alive. We used to get ourselves warm with balls of squashed wet paper in the stove. We used to eat cheese crusts heated on the grid iron. Since then I’ve never eaten anything as good. We had a bath in the bath tub with water heated on the cooker in the kitchen. The cinema was always the one that got the films the third time around and just once a month. Our fathers did shift work in the factories and when we were asleep they were at work. An affectionate gesture and a “Be good for your mother” was the only fleeting contact in the morning. On Sundays we went out of town on the bicycle with a few sandwiches, a bottle of pop and a bottle of red wine. In summer we even had a water melon. What the heck can they do to us, these dandies in Armani clothes, these who are corrupt inside, these little deputies, these cute mafia people, rotten, rotten, good only at talking, at chattering, the ones who have ruined the country and now are laughing at us. We have nothing to lose because we are used to living with very little or even with nothing. You will lose everything except your dignity because you’ve never had that. We used to read the newspaper only on Sundays when our father bought it. We couldn’t afford it the other days. It was il Corriere della Sera with Pasolini, Montanelli, Buzzati. Just one of them was worth more than all the newspaper sellers of today. We are really pissed off and we won’t be too genteel with the ones who are taking us for a ride. We’ll eat them alive. Bring on the crisis and we’ll do some cleaning up.” A former labourer.

Posted by Beppe Grillo at 07:19 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

March 15, 2012

Let’s nationalise the banks


The bank is the female protagonist in the horror film of the new millennium. It’s taken the place of Alien. Without any possible doubt. The 2008 banking crisis exploded like a monster incubated by the society for years. The toxic poisons: derivatives, junk bonds, CDOs have splattered everywhere. The international banking institutions, the ECB, the Fed, are obliged to keep the banks alive, monsters connected to the organism of the States. If Alien dies, then the body that hosts it also dies. They feed them by creating cash from nothing (that precisely is worth nothing). The 900 billion loan at 1% interest made available by the ECB to the European banks in January and February of this year, with the Italian banks in the front row, has not relaunched the economy with financing to the companies. This enormous mass of money has been of use to the banks so that they can buy public bonds that would otherwise have been unsold, and on which they earn between 4 and 6 per cent, to buy their own bonds and to invest in shares with a high return. They have hung onto the money for themselves. The companies are dying because of a lack of credit. Loan requests are turned down and outstanding loans are even called in. No further financing is made available.
The economy of Main Street has been substituted with that of Wall Street. From an optical hallucination. Money cannot be eaten. Yesterday, Greg Smith, a top director of Goldman Sachs, left the bank after 12 years with a really harsh public accusation. He defined Goldman Sachs as being dominated by a “toxic” culture, solely connected to profit in the here and now, treating its own clients as puppets. It is perhaps the first case of a repentant banker coming out of the closet. A Buscetta of the finance world.
What’s the use of banks? To facilitate the development of companies and the development of the territory. Now they are self-referential, disconnected from the real economy and from a vision of the future (what is an investment in a company unless it’s a bet on the future?). The banks have to return to the service of development and the service of the State. From the privatisation of the big banks that Prodi wanted in the 1990s, this lot have distanced themselves from their task. They are monsters at liberty. They have to be re-nationalised. They have to be placed under the control of the State and of the citizens. They will never give up. Neither will we.

Posted by Beppe Grillo at 06:13 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 23, 2012

The newspapers' bottomless pit - Beppe Lopez

The newspapers' bottomless pit
The newspapers are destined to disappear. Meanwhile they are still living on at our expense thanks to the so-called direct and indirect contributions.
They are the megaphone of the parties and of the areas to which they belong. We are paying them so that they can take us for a ride. In recent years, since the V-Day in Turin, there has been a bit of progress. They get less money.
What’s needed is to take a definitive step and eliminate ANY direct and indirect contribution (“the newspapers pay sales tax at 4% and not at 20% like normal mortals.…” Lopez). It’s intolerable closing the factories and financing the daily newspapers. Anyway it’s just a matter of time, that in this case is a gentleman. Information is shifting to the Internet and the newspapers are by now getting to be similar to an archaeological find.

Interview with Beppe Lopez, author of "La casta dei giornali” {the caste of the newspapers}

Indirect contributions
Greetings to the friends of Beppe Grillo’s blog. My name is Beppe Lopez. Some of you already know me because I am the author of “La casta dei giornali” {the caste of the newspapers} in which we have denounced all the public contributions to the publishing industry, especially in relation to fraud, tricks etc. I am standing here. This is Palazzo Chigi, as you know. Here is the Headquarters of the publishing department, and to be precise the public place where this money is handled. I remember that in the year this book came out, this department had given the assisted newspapers something like 700 million Euro. Tremonti first halved these contributions to the newspapers in some way. Monti almost cancelled the payments at first, but now they are trying to bring back a bit of the contributions. As usual the ones called the sector lobbies are in action to try to convince even the technical people that the newspapers need the contributions. Naturally, the most important reason is because otherwise the newspapers without these contributions, the existing newspapers that for 20 years have been enjoying these contributions. Today what is certain, I have written down some figures, is that Monti has reduced the annual payments that in the golden days amounted to 700 million euro a year and that has been slowly reduced to 170 million.


Yes to state contributions with specific criteria
There are still incentives for electricity. However we are facing a moment in history. Now finally we can do what should have been done if the contributions had been abolished as Grillo wanted and as even Di Pietro wanted because it’s possible to start again.


Posted by Beppe Grillo at 08:29 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 28, 2012

The Europe of Goldman Sachs

L'Europa della Goldman Sachs
The ECB has made available 498 billion euro to European banks at 1% for three years. At the end of February another mega loan of 400 billion is coming up at the same conditions. The declared aim is noble: to get the economy to take off again with financing to the companies. The money is obviously ours, paid by the increase in inflation and the removal of facilities provided by the State to the real economy. I’d say in passing that the banking system is basically parasitical and without a productive fabric, it wouldn’t exist. At least the bankers could play at Monopoly with Monti and Draghi using pretend banknotes.
898 billion euro is a colossal sum. The small and medium enterprises should thus take kangaroo-sized leaps. Their financial woes are finally over. And go off to the banks for an overdraft, a temporary loan, a tiny bit of financing, to pay Equitalila, to be at least able to pay out the thirteenth month a month late. I seem to be able to see them, sole traders, company bosses, owners of small companies, joyful like an Italian on an outing, running to the clerks at Unicredit, IntesaSanPaolo, Monte dei Paschi di Siena, that together have withdrawn about 35 billion from the ECB in January, to see the usual genteel refusal with the usual unctuous regretful smile. The banks are obviously hanging on to (our) money. Did anyone have doubts about that? The banks will invest the money in State bonds, that will pay out 6 to 7% and to cover up the investments they made by mistake that have left them with no liquidity.


Posted by Beppe Grillo at 04:12 AM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 22, 2012

War of the Buttons

For the creditors, the value of a public bond is considered to be intangible. If the State that has contracted the debt doesn’t pay, well - let it go to hell. It ends up in default. In principle, the value of a BOT is no different from that of any share of a company quoted on the Stock Exchange. Anyone who buys shares in Fiat or ENI knows that it can go up or down. He doesn’t ask for the intervention of the IMF or the ECB. It’s part of the game. The economy of a State is based on many variables, a GDP that can get bigger or smaller, a budget deficit or surplus, and unpredictable factors, like natural disasters or wars that can bring it to its knees. Anyone who buys the shares accepts the risks. The same should apply for those that buy BOT. If Formigoni, for example, has bought millions of euro’s worth of Greek bonds that today are worth 60% less, the responsibility is his, not the Greeks. (But why is the Region of Lombardy investing in shares? Does the Court of Accounts know how to respond?)
Anyone who buys public debt takes on the risk of its devaluation. With this rule, the risk would fall mainly on the buyer, and in particular on the banks that have hundreds of billions of euros of debts, to whom one could cynically say “No one forced you” or metaphorically “it’s your own f..king business!". This approach would reduce the use of debts to keep the economies of sick States on their feet. The public bond auctions would be practically semi-deserted. And it would be a benefit for the planet that is raving about “growth” without limits supported by endless debt. In 2012, 11,000 billion in public bonds will fall due in the world. Who will buy them?
A wife, tired of seeing her husband turning over and over in his bed for a debt owed to the neighbour, opens the window and shouts “Giovanni, my husband doesn’t have the money and he’ll never have it!” And then to her spouse: “OK, now the problem is his!” In the French novel "“La Guerre des boutons" {War of the Buttons}, two gangs of lads steal buttons from each other as trophies of war. The one with the most buttons is the winner. The final battle is won by the lads who decide to fight naked. A debt can be cancelled or restructured. The responsibility also lies with the buyer. They will never give up (but is it in their interests?). Neither will we. See you in parliament unless they do an electoral law that prevents that.

Posted by Beppe Grillo at 09:33 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 27, 2011

The ECB and the Giro di BOT


The ECB has lent 500 billion euro to the European banks at one per cent interest for three years. Pratically for free. It’s done that to get Europe to take off again. To allow the banks to reopen the taps and to finance the real economy for the companies that are closing down at the speed of light. As my youngest child, Ciro would say “it’s a proper barbatrucco {Barbapapa trick}”. Money from the ECB isn’t born under a cabbage plant, it’s guaranteed by the states of the EU. Basically it’s our money. The banks have to be saved. They have a liquidity crisis and they are not even lending money to each other. Furthermore, they have billions of uncollectable credits and various financial rubbish that sooner or later they’ll have to write off. 500 billion is a lifesaving anchor and in fact there’s been a queue of bankers to get the loan just like at the end of season sales. Banks however, act like banks. It’s in their nature to practise usury. Capital is nvested where the return is highest. Giving money to a company in difficulty or to a start up is a risk. Buying public bonds is a bit less risky. A whole State has to go bust. So it’s probable that the banks will buy the State bonds of the PIGS, the ones with the highest interest rates, from 6 or 7 % upwards. Guaranteed net earnings. It’s also a noble gesture. The loan agreed with the ECB would cover all the needs of Italy and Spain for the whole of 2012. Europe would be saved. However in this conjuring trick there’s something that doesn’t add up. So as to save us and to place the public debt, we have to pay really high rates of interest to the banks with money loaned by us through the ECB. The same banks, starting with the French and German ones, that have sold Italian and Spanish bonds with open hands in the year that’s gone by. And now that they’ll buy them back with interest rates that have been multiplied by five. Reason gets lost in this labyrinth. In this Giro di BOT {Roundabout of Italian Treasury Bonds} Why give interest to private banks that are buying our debt while we are lending them the money? Let’s buy our own debt, with the Treasury or the Bank of Italy, at least we’ll be paying the interest to the State. They will never give up (but is it in their interests?). Neither will we.


Siamo in guerra, {We are at War}, by Beppe Grillo and Gianroberto Casaleggio.
La Rete contro i partiti, per una nuova politica {the Internet against the parties, for a new sort of politics}
Buy now the book or the ebook

Posted by Beppe Grillo at 04:13 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 26, 2011

Passaparola – The bitter onions of the Monti Government - by Beppe Scienza

Le cipolle amare del Governo Monti

The Monti Government is like an onion . The outside layer, the most visible one, is the ECB. Thus the EU government. Remember? Just a month ago, Italy was at risk of causing the implosion of Europe, the United States, China, the whole world, if the spread were to go above 500 points with the Bund and interest rates on State bonds over 7%. Those are things that did in fact happen even with Monti, the Bocconi-guy, the man of “The Presidential Hill”, but without consequences apart from the taxes. Thus a Government of Bocconi-guys . The third layer is made up of the banks, that were at risk of seeing the tens of billions of euros worth of Italian stock purchased, becoming waste paper. Thus government of the banks , especially the French banks doped with BTP State Bonds. The fourth layer of the onion is Banca Intesa, the biggest bank in the country. Finally a Banca Intesa Government with two leaders at the very top level like Passera and Ms Fornero . Both with a very respectable CV in favour of the workers. There’s been a change from the government of Mediaset’s private TV channels to that of Banca Intesa. Nothing has changed except for the direct beneficiaries.
Beppe Scienza in his Passaparola explains to us who are Passera and Ms Fornero (nicknamed Frignero).

Intervention by Beppe Scienza, mathematician and economist

Corrado Passera, the man of the banks
I’m Beppe Scienza and I teach in the Maths department at the University of Turin. For a few years, in fact for a few decades, I’ve been dealing with savings and supplementary social security. This government, presented a bit like a government of Bocconi-guys, about whom there’d be so much to say, because on this very topic of savings and Bocconi-style supplementary social security, they keep banging on about the worst products and about the worst characters in the sector. Actually, rather than a government of Bocconi-guys, it’s more like a government of bankers and given the presence of two characters like Corrado Passera and Elsa Fornero, a government of Banca Intesa. I’m wondering whether the meetings are held at Palazzo Chigi or directly in the Milan HQ of Banca Intesa San Paolo. But this is normal. Meetings can be held anywhere. It’s policy that is truly worrying and worrying for the future. Because these characters Corrado Passera and Elsa Fornero have a past that bodes ill and they have already taken some decisions. I’m just going to deal the topics of savings and supplementary social security, that just don’t seem to be under consideration by the citizens. I want to say something about Corrado Passera, not so much about the Alitalia affair in which he definitely stuck to the line of the Berlusconi government, but to take a tiny step back. He was made Head of the Post Office in 1988 and he stayed there until 2002 and it’s true that he sorted out the balance sheet of the Post Office. I can assure you, Passera was not stupid. However, how did he sort things out? By creating Banco Posta {the Post Office Bank} The Post Offices ... If you go in you see more desks for finance than for postal products, in fact, it turns out that anyone wanting to send something by registered post or send a package, feels a bit like a fish out of water. Banco Posta has transformed the Post Office into a festival of financial products, mostly terrible ones or anyway bad ones, definitely mediocre ones, mostly getting rid of the “buoni fruttiferi postali” {post office securities} and certainly increasing revenues for the Post Office, but playing on the trust that people used to have in the Post Office, because they were used to the post office securities with which they could never lose anthing. Even now you cannot lose, because even though they are a bit flaky, not exciting, however, the post office securities continue to be the only product together with the current accounts and the bank deposits, where you can never lose what you have put in and you can take out the money any day. Instead they have been ousted. By everything and by worse stuff. That is by structured bonds, pension funds, collective investment schemes, life insurance policies. This is all stuff now sold by the Post Office, thanks to the work of Corrado Passera and his creation of Banco Posta, and thus just for this past life, things are not good. In 2002, Passera left the Post Office and went to Intesa San Paolo. Intesa San Paolo, the top Italian bank when counting the number of cash desks, perhaps it is no worse than the others, but it is certainly specialised in passing on to its customers savings and supplementary social security products that produce earnings for the bank, and not for the customer, including some tremendous things like life insurance policies that trap you for a year. You’ve got some money available and you take out a life insurance policy and for a year the money is blocked. Great. This is lovely. These are products of Intesa San Paolo and of other banks as well.
So where has Passera come from? This creates some perplexity and prospective that is confirmed by one of the first things, put about as an anti-tax-dodging regulation: the battle against cash. What is the battle against cash? It’s an old war-horse of Italian banks. For a few years, for 7 or 8 years they keep on saying that too much cash is in circulation, that we have to pay with electronic money or suchlike. These are all things that are repeated by economic journalists like parrots. Any idiot thing put out by a bank’s press office is repeated on their pages. To start with, this is not true. Even aboad, for example in Germany, there’s a very high usage of cash. A study carried out last year by Deutsche Bundesbank, the German central bank, found that 82% of purchases made by Germans, take place using cash. The German national bank finds nothing wrong with this, in fact it considers it to be logical. It says: “It is logical for small sums of money, for various things you need cash, it’s logical, no here no!” We have got to the point at which this Government has decided, then now it is going back on this in part, that pensions greater than 500 Euro are to be paid, not in cash, but as a credit on a current account. Just to think that the pensioner with a pension of 700 Euro who goes to the Post Office and takes out 730 Euro, is laundering dirty money, is a bit strange. Why is there ths battle against cash? Well, because the banks are making money on all elelctronic payments. They make money in two ways: 1)the most immediate one, the commission they get, and the commission also on the bank machines, the commission on the credit cards that can be up to 4% and in fact the Confcommercio {Chamber of Commerce} is against this prohibition on paying in cash, because every time the shopkeeper takes a payment with a credit card or using another method, a part of that goes to the banks. Then there’s another point: that the banks are happy for there to be money left in the current accounts rather than having all the banknotes in your wallet, becuse in that way they have financing that costs them nothing, because they pay no interest on the current accounts and the banks are hungry for money at this moment of crisis, and it’s difficult to get money because among other things, they don’t have the trust to lend to each other.

Fornero means trust in pension funds
The point is that when I use cash to pay in a shop, the bank gets nothing from this. I take the banknotes and give them to the shopkeeper and I pick up the goods. The bank wants to earn something even on this! Now let’s look at another character in this government, Elsa Fornero, who, as well as being a Minister, also wants to devote herself to other activities, like being an actress, specialised in tearful scenes played not too well! Elsa Fornero also comes from Banca Intesa where she was on the Supervisory Committee. Before that she was in the Compagnia San Paolo, a banking foundation and in one of its offsprings: CERP, {centro di ricerca sulle pensioni = pension research centre} near Turin, also financed by Compagnia di San Paolo. For now Fornero is busy doing a bit of killing off of pensions and pensioners. Unfortunately, I expect it’s a severe attack on the TFR {lump sum payment taken on retirement} and giving help to the parasitical supplementary social security industry. Here too we have a previous history. This includes various articles she’s written and in particular the position she adopted in the terrible semester of 2007 when, as long as you stayed silent, your TFR ended up in the pension funds. OK, in an interview on the radio on 19 January 2007, Elsa Fornero said this about pension funds and giving your TFR to the ones administering the funds: “The important thing is that we have a good market that works well, that has professional operators, that has a good law on savings, that has transparency, that also has professionalism and probity.” After everything that has happened in Italy, Argentina, Sirio, Parmalat, collective investment schemes that have been causing people to lose money since 1984, when they came into existence, we have a good market that works well, that has professionalism and probity, but that’s not all! Because then as regards the peprplexity of some listeners about the fact that perhaps putting their TFR into the pension funds could even be risky, the great economist gave a demonstration of a heartfelt invocation that is also a profound analysis of the situation, her affirmation is “You also need a bit of trust” we are at the level of the well known advertising slogan of the 1960s: “Galbani vuole dire fiducia” {Galbani means trust}! From these Ministers coming from Banca Intesa, unfortunately I’m expecting the worst for savers and in relation to the TFR, the worst for Italian workers! From a person like Elsa Fornero, I’m expecting interventions to the detriment of the TFR and in favour of that strange spurious alliance that is made up of trade unions, of categories of workers, banks, insurance companies and administrators that all in one way or another, by sucking money from the workers, are gaining from the supplementary social security, obliging the workers themselves to use their own TFR to play the roulette of the financial markets!


Siamo in guerra, {We are at War}, by Beppe Grillo and Gianroberto Casaleggio.
La Rete contro i partiti, per una nuova politica {the Internet against the parties, for a new sort of politics}
Buy now the book or the ebook

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December 22, 2011

2012. We’ll discover it just by living it


What will happen in 2012? “Who knows what will happen to us?/We’ll discover it just by living it”. However there are already a few clues. It’ll be a year of survival followed by 2013 which will be even harsher. We’re in for a couple of cast iron years. Unemployment will explode. Families will spend less and will dip into their savings (if they have any) to try and keep up their standard of living. Liquidity will become something that is ever more rare. Banks will not lend money to companies; many will go bust, squeezed between the reduction in production and the impossibility of getting access to credit. There will be the completion of the domino effect that started in 2008. After the banks and the states, the contagion will affect the companies. The problem is that after the companies there’s nothing. The shops will fill up with unsold goods. The streets with unemployed people. What’s the use of merchandise if no one can buy it? The great machinery of world commerce will slow down almost to a halt. Many countries will go into recession. Italy will have a drop of more than one per cent and I’m an optimist. Without money, without work and with the country in recession, there’ll be an increase in emigration abroad that’s already happening, especially among young people, not just within Europe, but also to China and South America. For those staying in Italy, life will be tough. Prices will increase, together with inflation, as has happened in Greece. The government will have to face up to the interest on bonds that will get close to 100 billion euro with the new rates. To do that it will increase the taxes on consumer staples and it will use BTPs to pay part of the pensions, of the salaries of state employees and of the debts with private companies. While I’m writing this I feel like escaping abroad. Don’t worry; I’ll stay here with you. You won’t get rid of me so easily.
In 2012 the price of real estate will go down by between 10 and 20 per cent. There’ll be a race to sell, but few buyers. We need to get ready for a war-time economy. Don’t get into debt and pay off any debts you have if possible. Don’t buy shares. Don’t buy state bonds. Don’t take out a mortgage and cut out any superfluous spending. Anyone that has savings should open deposit accounts in a number of banks or, better still, a Post Office account. Invest in kitchen gardens, in land for cultivation. Land is the best insurance for the future. Get together in “Gruppi di Acquisto Solidale” {Ethical purchasing groups}. There are ever more of these in every city. When the crisis has passed over, you will feel stronger, you will have got used to valuing the important things and valuing your time. Who knows, perhaps the period awaiting us is a blessing.


Siamo in guerra, {We are at War}, by Beppe Grillo and Gianroberto Casaleggio.
La Rete contro i partiti, per una nuova politica {the Internet against the parties, for a new sort of politics}
Buy now the book or the ebook

Posted by Beppe Grillo at 04:28 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 20, 2011



Serpico, the acronym for “Servizi per i Contribuent” {Services for the taxpayers}. Is a Sogei application to check up on the accounts of the Italians? Sogei is a computing company that went from Telecom Italia to the Ministry of the Economy in 2002. The information relating to us will be in a million billion bytes of memory. Two thousand servers handling 22,000 items a second. Thanks to this firepower, every single transaction of the accounts of us Italians will be examined. Every item paid in, every bank transfer, will have to have its reason, the motives. This will be possible from 01 January 2012 when all current accounts will be available to the Tax authorities even without on-going investigations. The Italian Republic of the Soviets. The Great Tax Dodgers don’t transit through a current account. The Great Corruptors don’t do bank transfers. Anyone who has made use of the Fiscal Shield did not arrange for the bank to make a payment of 100 million euro to a foreign account.
Who wants to be checked up on? The baker, the pensioner, the artisan, the small-scale entrepreneur-soon-to-commit-suicide because the State doesn’t pay his invoices? And how much is Serpico costing us in a State where broadband is a measure for trousers while the State is investing in hundreds of new servers?
The transactions on our current account are a snapshot of our lives: payments for the school, for holidays, a loan to a friend, the annual season ticket for public transport, the restaurant by the house. Us and our current accounts are the same thing. The knowledge that my identity, as an honest taxpayer, is available to tens or hundreds of people doesn’t feel good to me. It’s a violation of privacy. Who can assure me that my personal data will not be violated? The relationship is no longer between me and the bank but between me and the Tax authorities. Does one have to give an explanation of a bank transfer for 1200 euro to one’s own uncle? We are slowly sliding towards the total control of the life of the citizens. The reason given is that we are close to bankruptcy, that we have to save Italy. Good! Let those who have brought us to this situation, starting with the parliamentarians, publish on the internet the transactions on their current accounts for the last five years. Let every member of the public administration that has got the citizens into debt, give back the money. Then there’s a question to be asked. What’s the use of our taxes if public services are disgusting and the few that function are chopped to pieces with cuts? If I pay I want to be served and respected. The master in this country is the citizen, not a Government of bankers that are not even elected. They will never give up (but is it in their interests?). Neither will we.


Silenzio si ruba {Silence, there’s thieving}, by Marco Travaglio.
Un anno di illegalità permanente {a year of permanent illegality}
Buy the book and the DVD today

Posted by Beppe Grillo at 05:32 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 17, 2011

The non-existent economy

L'economia inesistente

The value of everything present on planet Earth does not go above 10% of the money, the shares and the real estate values. In other words, 90% of the presumed wealth does not exist. The reality is that our houses are worth a quarter, the shares of the quoted companies are worth a tenth, the public stock can be worth nothing and be no longer reimbursed. What has been happening since the beginning of the new millennium is a gigantic bonfire. A fire of colossal proportions that is burning the waste paper that we have printed. It was just an optical illusion. Dust it was and unto dust it shall return. Heaps of public debts, derivatives, currencies without value (like the American dollar), are continuously fed by governments without an idea for the future. A mad race by an out of control car. Growth is the solution, say the drivers, and press down on the accelerator. No organism in nature grows forever. They want to print money and sell debts for eternity. Inside this infernal machine, human activity is only of use in pushing the settling of accounts further into the future by a few years. The collapse of the planet. People work like slaves at the service of a non-existent wealth for a sick dream of a model of society in its twilight years. A hole is dug, a hole is filled up.
In the summer of this year, humanity had already used up all the renewable resources produced by the Earth. We are eating up the earth like an apple, only the core is left. Two planets are needed to keep up this rhythm. Mars could be the next frontier of consumerism. The human species reminds you of the Horsemen of the Apocalypse. When the natural resources don’t exist, virtual wealth is invented. We are working at the service of nothing. The engine is getting overheated. The so-called BRIC countries, Brazil, Russia, India and China, together with Turkey, the BRIC of the Mediterranean, will slow down their growth in 2012. For lack of customers. North America and Europe will go into recession. China’s strategy to continue producing is to buy up the debt of the countries to which it exports. Basically, it gives money in advance in order to be able to sell its goods. The deeper we go, the more we deny the problem. It’s not possible to create what doesn’t exist. Someone wake me up! AAAARGH!


Silenzio si ruba {Silence, there’s thieving}, by Marco Travaglio.
Un anno di illegalità permanente {a year of permanent illegality}
Buy the book today

Posted by Beppe Grillo at 12:19 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 11, 2011

The WTO and the global slave


Ten years ago, on 11 December 2001, China became a member of the World Trade Organization (WTO). From that point onwards the word “globalisation” has been a harsh reality for everyone. The WTO is the umpteenth organisation over which the citizen has no control, but which decides his future. A handful of bureaucrats, with the collaboration of lobbies and multinationals, dictate the rules of world commerce. Its Director-General is Pascal Lamy, an illustrious unknown person for most people. Who elected him? A medium sized business in Vicenza or in Forlì could close down because of one of his decisions. The WTO includes 153 States, for the others there’s nothing else but an embargo. The WTO was created to favour the free circulation of goods and services, but in fact it has favoured the free circulation of investment capital. The multinationals have shifted production to where it costs less. In countries where the term “trade union” is not even in the vocabulary, where there are no rules against pollution of the environment by factories, where dignified wages and protection of the workers are a chimera, but where there’s a supply of labour at low and very low cost. Even child labour if you want. International competition can happen where there are the same rules and rights for the workers, otherwise it becomes a hunting reserve for unscrupulous entrepreneurs. How can you compete against those who have no rights? To think that is madness or is just a way of pulling our leg. Sack people in your home country, continue production at a few euro with new slaves and then go into the TV studios and explain the economy. What a marvellous and shitty world the WTO has created! Those with capital have in one go got two results: controlling wages and demands from the workers for a better life and increasing their own profits. It’s the continuation in another form of the slave ships that transported the free forced labour to the cotton plantations. From the creation of the WTO in 1995, production has shifted where capital gets the best return, and it gets the best return where the human conditions are the worst. Meanwhile in the countries that have lost tens of thousands of companies and millions of jobs because of globalisation, like Italy, unemployment has exploded (what a surprise!). Basically capital has been globalised and losses and unemployment have been nationalised. In the future, unless we stop this trend, the creation of the global slave will become a reality. Eat, produce, die!


Silenzio si ruba {Silence, there’s thieving}, by Marco Travaglio.
Un anno di illegalità permanente {a year of permanent illegality}
Buy the book today

Posted by Beppe Grillo at 07:26 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 06, 2011

Standard & Poor's "in the cloud"


Standard & Poor's observe, observe. Today they have placed under observation 15 countries in the euro zone. All European countries can lose their triple A status. Become less trustworthy on the international market. Basically poorer. The evaluations of Standard & Poor's can make a nation go bankrupt. It gives orientation to investments; it judges the budgets; it publishes the analyses. It brings down governments; it influences the economic decisions of the States. It makes decisions about economic measures. Standard & Poor's lives "in the cloud", above politics, above the EU, above the UN, the voters. Its god is the market and it reports only to that. In theory it’s a service for investors. In practice it’s an agency equipped with unlimited power.
Who controls the controller? People with names that say nothing to anyone count more than Obama, Merkel and Sarkozy put together. The president is Douglas Peterson, the vice presidents are Pat Milano, James C. Daly, Catherine Mathis, and John Weisenseel. The executive directors are Paul Coughlin, Yu-Tsung Chang, David Jacob, Alex J. Matturri, Adam H. Schuman. Finally, Yann Le Pallec is the one responsible for Europe, the Middle East and Africa. As you can see on the Agency’s website: "Standard & Poor's Ratings Services are led by experts with years of experience in the world of finance.” Experts? Before the economic disaster of 2008 where were these gentlemen? The derivatives, the CDOs and the various financial shit have gone past their eyes unobserved.
Standard & Poor's is not a charity. It has an annual turnover around 2.5 billion dollars, a skyscraper in Manhattan and 10,000 employees in the world. The Agency is part of the McGraw-Hill group, a giant of the world of media and information with more than 6 thousand billion dollars of receipts in 2010. Our sovereignty is decided by an eyebrow movement from "Dug" Peterson, up until 2010 a top director of Citigroup, the biggest financial services company in the world. Who knows him? And who has elected him? And who gives a guarantee for him? The Bildeberg Group or Goldman Sachs? A supranational structure, not elected by anyone. It has more power than the EU. Who has handed it this power? The power is of the citizens. The market is of the cows.


Silenzio si ruba {Silence, there’s thieving}, by Marco Travaglio.
Un anno di illegalità permanente {a year of permanent illegality}
Buy the book today

Posted by Beppe Grillo at 04:30 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 01, 2011

Referendum on the Euro


The opinion poll "L'Italia deve uscire dall'Euro" {Italy has to leave the Euro} has seen the triumph of the euro sceptics. Out of 20,176 responses, 11,352 said YES, equivalent to 56.68% and 8,676 said NO, equivalent to 43.32%. a good 10,608 explained the reasons for their vote. “Una Summa dell'Euro”. Anyone with time to read them can get a complete view, perhaps after dinner to digest the new taxes. I’m reporting three reasons in favour of an exit from the Euro and three reasons in favour of staying in the Euro.

1 – Since a radical change in the economic scenario is inevitable, having our own currency means that it is possible to control our economy. Otherwise we will be phagocytised and sold off. Since we have to land up in misery, we may as well end up there as owners of our own stuff. … And then, it’s useless to keep alive a system that is anyway destined to end
2 – To get back control of our monetary policy. The exit from the Euro has to be accompanied by the introduction of a national currency created without debt: the State, not the banks, creates money and uses it to pay salaries to public employees and accepts it for the payment of taxes. This would guarantee that the new currency keeps its value. For greater detail on the strategy to exit the Euro I suggest this link
3 – Because in the ten years after the introduction of the single currency we have made the situation worse, certainly with the interest rates that the Euro has offered it has been easier to get into debt, however by getting into debt it’s not as though that much is resolved …without mentioning then the lack of purchasing power of the banknotes. In certain cases the cost of living has actually doubled in relation to the old lira, in fact those that haven’t entered the Euro have done better than those in the single currency (look at Sweden, Poland, Denmark and Norway). Certainly the fault is not all in the Euro because in the last ten years, we have seen production from countries that we hardly ever heard mentioned, like China and India, and for this reason, the cost of raw materials has shot up to the sky (like oil and its by-products, but also wheat, rice etc. )

1 – It’s not Italy that has to leave the Euro, but the Europe of the Euro that has to pay for its errors. Europe has to settle its debts with a patrimonial tax of 1-2% on banking transactions and on bank capitalisation. The banks that have caused the problem have to pay for what they have allowed to happen and with them all the accommodating politicians.
2 –It’s not wise to throw away the baby with the bath water. The problem is not the Euro itself, but the failure to complete the unification of the economies and the European economic policies. Three things are still necessary: a common economic policy, a common foreign policy and a real federal central bank that prints money and that does everything done by central banks. I don’t want to renounce the Euro: it’s convenient throughout the world and it’s useful for stabilising inflation and to defend the purchasing power of the families of wage earners. When a currency is subject to inflation, the wage earners pay the price and the exporting companies rake in the benefits
3 – It would be a catastrophe: we would lose the stability of the currency. Our currency would be devalued and we would in fact return to the period immediately after the war and without a Marshall Plan. Leaving the Euro is suicide: we could look forward to thirty years of Argentina and then who knows … we would probably be phagocytised before that by our neighbours. The solution is to stay in the Euro, to send home the incompetent politicians that have brought us to this condition and save the Euro and Europe by aiming at having not Eurobonds but a truly United Europe, with a truly united tax system, government and economy.

The games about the Euro are being carried on above the heads of the people of Europe. The referendum on the Euro in Greece has disappeared from one day to the next and the premier Papandreou who proposed that, has been put outside the door without even a week’s notice.
A referendum on the Euro would make it possible for Italians to weigh up the reasons for YES and for NO, both of which are legitimate, and not to leave in the hands of others, the decision on our own destiny.
Today’s opinion poll is "Referendum sull'Euro" {Referendum on the Euro}. Vote and give your reasons.

Look at the results


Siamo in guerra, {We are at War}, by Beppe Grillo and Gianroberto Casaleggio.
La Rete contro i partiti, per una nuova politica {the Internet against the parties, for a new sort of politics}
Buy now the book or the ebook

Posted by Beppe Grillo at 05:33 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 29, 2011

Crunch, crunch


There’s a monster going around the banks. It’s got really strong claws that can crush any company. Crunch, crunch. It absorbs money like a magnet and it doesn’t give it back except at a really high price. It’s the “Credit Crunch”. A term that will become as familiar as “spread”. “Credit Crunch” means that no one gets credit, that the liquidity in circulation is becoming like water in the desert. The overdraft that covered the handling costs of companies while they’re waiting for payment from clients has become a mirage. The company has to make upfront payments for salaries, sales tax, taxes on presumed income for the next year and every form of commodity. As long as the owners and the shareholders manage to put their hands in their wallets, it’s OK, then it crashes.
Often the banks have more debts than they have money and they cannot lend out the debts. They can however issue them onto the market in the form of bonds. The game works until the bank bonds that are sold are equivalent to those that are paid back. Then the bank can go under. The European banks have sold 413 billion dollars worth of bonds in 2011. They have had to pay back 654 billion that fell due. What’s left is a black hole of 241 billion dollars of lack of availability (*). The banks are no longer able to buy public bonds to save the States and they cannot even sell their own bonds.
Which will collapse first? The banks or the States? Or both? Meanwhile, the companies are dying in tens of thousands because of a lack of oxygen. The debt of the companies is like a chain letter. The first company in the chain that goes into financial asphyxia strangles the second that In turn strangles the third and so it goes on. The State asks for advance payments, the banks reject loan applications or they offer loans at usurious interest rates or with a mortgage on the company. But if the companies die who will pay the enormous costs of the State machinery and the salaries of the bankers? The debt cannot be eaten.
In the last few years, mortgages have been granted at variable rates for homes even for 90% of the capital. Very many families that have taken these mortgages can no longer pay for them. The homes get auctioned off or go to the banks. Who will live in these homes? A bank bond or a share? And the people evicted that have lost not just their apartment but also the percentage of the capital they have paid, what will happen to them? In response to the Credit Crunch, you cannot react with a Taxation Crunch like the government is getting ready to do. Every organism has its point of collapse and Italy already has a strong tachycardia. We need a moratorium on the mortgages for the first home, the immediate abolition of paying the sales tax in advance and the company taxes on presumed income for the next year. Italy needs breathing space. They will never give up (but is it in their interests?). Neither will we.

(*) source Dealogic/Ft


Siamo in guerra, {We are at War}, by Beppe Grillo and Gianroberto Casaleggio.
La Rete contro i partiti, per una nuova politica {the Internet against the parties, for a new sort of politics}
Buy now the book or the ebook

Posted by Beppe Grillo at 07:02 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 25, 2011

2012: end of the euro?


Who will save us from the collapse of the euro? It seems like witnessing the end of the Roman empire in 476 AD. At that time there was the dissolution of a political construction, today it’s an economic one. No rules were laid down for exiting the euro. If it’s difficult to enter, it’s impossible to exit. More or less like criminal organisations. The euro is worth less and less compared to other world currencies like the dollar and the yen. Its crisis is derived from the end of the debt era. The European countries, some to a greater or lesser extent, have financed their growth with the sale of public bonds. To a great extent they swapped them among themselves like cigarette cards. I’ll hand you my debt and you give me yours, the “absurd” elevated to economic science. The problem is that no one wants to buy European debt any more. Neither within nor outwith Europe. To sell it it’s necessary to increase the interest and thus to create new debt in a never ending race.
The value of the euro is guaranteed by the performance of Germany that however has a GDP/debt ratio of 82%. It’s beyond the maximum European threshold of 60% and its banks are among the least solid in Europe. Germany cannot shoulder the European debt. First it has to think about itself. The salvation for Europe should be the so-called Eurobonds, basically the debt of all the countries put in a common pot and issued to the market. The more virtuous states, like Germany and Holland, should also pay for the PIGS. A bit like in Italy where it’s always the ones who pay the taxes that pay for the tax dodgers. The Italian public debt is expressed in euro and it has to be repaid in euro. We cannot devalue the euro and even though our economy is worth less, the bonds keep their initial value. It’s a noose round our neck that gets tighter and tighter a centimetre at a time; the hangman is the “spread”. If our bonds were to have a value in lira, the devaluation of our currency would be reflected automatically. The problem would not need to be put forward. It was demoniacal and certainly Tafazzi-style to tie the value of OUR public bonds to the value of the euro over which we have no control whatsoever and that has nothing to do with our real economy. The Eurobonds should obviate this monstrosity but it is improbable that the Germans will put their hands in their pockets to save the Greeks and the Italians.
I don’t know where this French/German minuet is leading. It’s conducted by two ballet dancers: Merkel and Sarkozy, always out of time. The impression is that we are waiting for an order to “break ranks”. Preparation is necessary, even just as a probable alternative, a plan B for leaving the euro. Let’s not get there out of necessity.
The blog is proposing an opinion poll on the euro yes – or the euro no. Respond in great numbers with your suggestions.

PS. The opinion poll will be open until 2:00 pm tomorrow Saturday 26 November. Look at the results.


Posted by Beppe Grillo at 08:29 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 18, 2011

Agatha Christie and the ten little States

Nigel Farage at the European Parliament
Italy has an unsustainable public debt because almost half of it is owned by banks and foreign States. Japan with a debt/GDP ratio of more than 200% is not collapsing because most of its bonds have been bought by the domestic market. They are holding us by the balls and they have appointed a liquidator. They don’t want to lose their investments, especially the French banks. Over the last few years, if we had followed a policy of prudence, instead of selling our public bonds with open hands for Great Improbable Public Works, Enormous Money-Wasters, Election Financing and useless infrastructure, today we would be free to decide our destiny. It’s not like that. They repeat that there are no alternatives so as to avoid that there may in fact be alternatives in reality. The parties are cadavers. They could sack all the parliamentarians and no one would notice. What use are they? To ramble on from the benches at our expense, while decisions are taken by the ECB and by Ms Merkel?
This blog, ignored and often derided, while the bunga bunga was having a fury in the media, has for years been announcing the financial and political disaster awaiting us. Democracy is by now an empty word, substituted by “eurocracy”. However the speed of the decisions that have taken place over the heads of the Country has in it something strange, something unnatural. It tastes of comedy, of “teatro dell'Arte”. A life senator in a period of a few hours and a government of non-elected people in a week. The Italian people treated like a stupid servant. Why has it happened now? Why this hurry? The growth of our GDP, even though ridiculous, has been greater in 2011 than most of the nations of the EU, exports have grown by 10% in relation to the same period last year, and the budget deficit has gone down from 5.5% to 4%. We have slid down on the spread, but who is the one that made the spread go up in such a stunning way in just a few days? And for what reason?

Speech by Nigel Farage, president of the Europe of Freedom and Democracy group in the European Parliament



Siamo in guerra, {We are at War}, by Beppe Grillo and Gianroberto Casaleggio.
La Rete contro i partiti, per una nuova politica {the Internet against the parties, for a new sort of politics}
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November 16, 2011

Germany uber alles


The only nation immune from the crisis of the euro is Germany. We’ll have to start to understand the reasons for this. If a nation like Greece, that is worth 2% of the GDP of the EU, risks making it collapse, we need to ask ourselves a few questions about the capacity of the current construction of Europe and on what basis we are placing our feet. The data on the “spread” of the last decade between any old country of the euro zone and Germany demonstrates the unsustainability of a single currency for European economies. The difference between the public bonds of the various States and the German bund has increased not just for Greece or for Italy, but also for Holland that has gone from 0.2% to 0.5%, for Spain from 0.3 to 4.1% or for France from 0.1 to 1.76% (*), all the figures are increasing. Basically the distance between Germany and the rest of Europe is increasing for everyone, at different rates. And we are all at risk of ending up like Greece in the long term. No State can stay hooked up to the German locomotive.
Germany is absorbing liquidity from the European States like a black hole. It’s the cash box of the continent. In fact anyone who sells Spanish or Italian bonds, is today buying “bund” that have a lower return, but that give greater guarantees. Germany, thanks to the euro, has increased its exports to other member countries. If the Italian were to pay for a German product in lira, or the Spanish person in peseta, exports from Germany would go down. The euro does not represent the national economies that have adopted it, the countries that are getting further away from each other, not getting closer together. The euro is the symptom, not the problem. The EU doesn’t have common fiscal policies, shared measures for constructed budgetary laws deciding expenditure policies and accounts of the different States. It’s the equivalent of a group of people who live in the same condominium in which some people throw money from the window, someone else cleans the stairs for everyone, doorstep recycling is done only by the tenants on the first floor who are also the only ones to pay the expenses of the condominium. It’s obvious that living together like that cannot last, just as it is equally obvious that the European Union has to follow and not anticipate a political union. You start with your head not your wallet. Unfortunately you see it’s morning by the “superpassera” in the government.

(*) source OECD date: 11 November 2011


Il tracollo economico dell'Italia {Italy’s economic collapse}
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November 13, 2011

Letter from Argentina


Monicelli said that unfortunately, there has never been a revolution in Italy. The Anglo-Americans put an end to fascism, not the Italians. The ECB has turfed out Berlusconi, not the Italians and not even the colluding Opposition made of papier-mâché. The new masters have always substituted the old ones in this country of servants. Perhaps now, at least for once in our History, we will be able to try to liberate ourselves on our own. This letter from Argentina is a message of hope.

“Dear Beppe, dear all,

When I was little, my father told me stories of Italy and I dreamed of Italy. Your marvellous peninsular and the Mediterranean were for us, together with Greece, not just the cradle of Western civilisation: for 40% of the population of Argentina, Italy was the Motherland. We wondered why we had to speak Spanish, a language that we had nothing to do with. Sometimes with great effort, our parents bought Italian magazines like “la Domenica del Corriere” and we children looked at the cartoons without words and tried to understand them, while listening to Iva Zanicchi singing “Fra noi”. In a good chunk of my land the surnames are exactly like yours.
It was luck that meant I came to Italy as a young girl, flying on my own to visit my uncle and aunt and it happened that straight away after that there was the 1976 coup d'état in Argentina. My father decided it was best for me to stay in Italy. And that’s what I did. I went back to Argentina in 1983. My cousin who lived in Baudenasca (Pinerolo), saw how much I was suffering in a crisis of nostalgia, and he said to me: “The generation that emigrates is a generation lost”. Then I made the choice that my home would always be Argentina. Anyway Italy is in my blood and in my heart, so much so that I carry my “Carta d’Identitá” {Italian ID card} in my wallet together with my “Documento Nacional de Identidad”. Thus I have always followed Italian current affairs. Like so many Argentineans I watch “Rai International”. We are the biggest population of Italian origin in a foreign country, even though Italy has often ignored us. I have been astonished to observe many of the happenings in Italy in the last few years like the adventures of “Your Cavaliere”. In Argentina, the ones that you call “poteri forti” {strong powers}, not having managed to get back up off the ground in spite of the “coup” and the dictatorship, slotted themselves in to the Menem government , corrupting it and upsetting it right from the start. They almost succeeded. However, it has to be said that after Menem we managed to react and when, with De La Rua’s “Alianza” government, they wanted to give us the final blow, the population out in the streets forced them to give up and leave. It was not the “poteri forti” that got rid of those who wanted reforms that people are now telling you are necessary and that the government you elected cannot get through because they are “unpopular”. It was us, the citizens out in the streets that got rid of them, even though we were confused because like you they kept us with our backs to the wall pinned there with massive headlines in the newspapers with “Riesgo País” (your “Spread”) that would have taken us all to hell unless we took the poison. The dilemma was the same as has been presented to you and to the Greeks: “If you don’t want to be killed, commit suicide slowly”. The law of “Flexibilisation of work”, approved by the De La Rua government paying the senators, was partially repealed.
The social security contributions (even those) that had been privatised and handed over to the “Pension Funds”, were taken back by the State. Argentina’s GDP, that plummeted in the year of the default (-11% in 2002), straight away started to grow at an average of 8-9% a year as of 2003 and at the end of 2011 it’ll be at 7% in spite of the international crisis. Hundreds of researchers are coming back to Argentina thanks to the government’s “Radici” {roots} programme; the budget for public education (declared a “public good” by law) has gone from 2% of GDP (2001) to 6.5%.
Our countries have said “no” to the “free trade” that the United States wanted. This was the wish of those presidents who enjoy the biggest support of their citizens and who are often sneered at by the “First World”. For example, for the global media, Chavez is a clown. Cristina, a “populist” who only thinks about buying expensive handbags and shoes. Evo Morales, a “savage” and so on. Stereotypes to discredit our governments because we are resisting the “poteri forti”. We are growing



Il tracollo economico dell'Italia {Italy’s economic collapse}
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October 20, 2011

The future awaiting Italy - Eugenio Benetazzo

The future awaiting Italy
Interview with the economist, Eugenio Benetazzo:

Most of the emails that I’ve received in the last few weeks have been mentioning the risk of a patrimonial tax in Italy. Given that with a patrimony valued at 8 trillion euro subdivided into financial assets and real estate, Italy has a tax base that no other country in the world can claim to have and it would give credence to the presumptions that from now for the next few months, some government, especially if imposed from above, thus a “technical government”, puts into practice one of these strategies to sort out the public accounts. It’s not possible to know the dimensions of this intervention, but it can be hypothesised. There are those that estimate it to be a cumulative 3, 4 or 5% with a patrimonial tax on real estate and financial assets and that objectively, it would produce the amount of financial resources necessary to consistently reduce the stock of the Italian public debt.

On the road to underdevelopment
In the next few days my new economics book is coming out: “Il futuro che attende l'Italia, era il mio Paese”{The future awaiting Italy, it was my country}. It’s about the crisis of the Italian system and the potential default of the Italian public debt. Many people have written to me to ask what are the most likely scenarios for the evolution of the economic and macroeconomic situation in Italy. The recent episodes of financial newspaper stories that have highlighted the potential default or financial crash of the Belgian Bank, Dexia with repercussions across the whole of the European banking system


A country for the young people
Most of the emails that I’ve received in the last few weeks have been mentioning the risk of a patrimonial tax in Italy. Given that with a patrimony valued at 8 trillion euro subdivided into financial assets and real estate, Italy has a tax base that no other country in the world can claim to have and it would give credence to the presumptions that from now for the next few months, some government, especially if imposed from above, thus a “technical government”, puts into practice one of these strategies to sort out the public accounts. It’s not possible to know the dimensions of this intervention, but it can be hypothesised. There are those that estimate it to be a cumulative 3, 4 or 5% with a patrimonial tax on real estate and financial assets and that objectively, it would produce the amount of financial resources necessary to consistently reduce the stock of the Italian public debt.
My personal opinion is that they will go and attack, above all, the financial assets, thus most of the liquid assets in the form of the liquidity of deposit accounts, fixed term deposits, because most of the Italians, given the attention and the financial turbulence of the markets right now have taken a position with these types of accounts. Unfortunately, we have to remember that the patrimonial is a tax that is not democratic, but that it goes to weigh on those who up until now have always paid their taxes or those who have put aside resources in a fair and correct way and above all while fully respecting the Italian tax system.
My personal hope or thought is that if it were to be implemented, that if this tax (that will generate a massive quantity of resources for the country) is brought in, that these resources are used by a new executive, not the current one, otherwise it would be a lost battle from the start! An executive that is representative of the individuals and the motivations for renewal that are arriving right now especially from the young generations of Italian lads and lasses, those aged 30 to 35 years that for the most part are living with a future that is profoundly uncertain not only from a financial viewpoint, but also from the point of view of employment.

Era il mio paese

Era il mio paese {It was my country} - by Eugenio Benetazzo
Il futuro che attende l'Italia.{The future awaiting Italy}
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October 07, 2011

Italian taxpayers’ lost money - Marco Cobianchi

Italian taxpayers’ lost money
We are in default, but at the same time we are the richest country in the world. Potentially. If we were to recover the money that’s wasted, lost from tax dodgers, from corruption, from criminal activity, the State coffers would have approximately an extra 500 billion euro a year. That means that without asking for any sacrifice from the Italians, the public debt would be reduced to zero in 4 years. No one has our numbers. The problem is thus political rather than economic. Marco Cobianchi is an economics journalist. He has made a journey in Italy through the money of the State that has been gifted like sweeties to companies that don’t exist or that are about to go bust. An abyss on which there are no controls.

Interview with Marco Cobianchi , a journalist and the author of the book "Mani Bucate" {Hands with holes}:

Ineffective public funding
Greetings to the friends of Beppe Grillo’s blog. I’d like to present myself. I’m Marco Cobianchi, a journalist working with “Panorama” and I deal with the economy. I’ve just published a book called "Mani Bucate" {Hands with holes}. It’s the first investigation carried out in Italy about the incredible world of State financing to private companies. This is money that comes from the coffers of the State and ends up in the coffers of the companies.


FIAT, 121 million in public subsidies
Among the hundreds of cases I talk about in "Mani Bucate", one made me jump off my chair. It’s about STM, a French-Italian company that in a single year received about 1 billion 124 million euro of public subsidies, of which about half came from Italy, and about half from France. This money was used to change the business of STM


The State finances the mafia
Checks don’t exist. OLAF, that is a European body that should check up on irregularities, says that in 2009, there were 1491 Italian irregularities and they involved capital to a value of 422.9 million euro. The possibility of recovering this money is practically zero because according to OLAF the member States, that is the European States chase up only 7% of suspected cases.


Mani bucate

Mani bucate {Hands with holes} - di Marco Cobianchi
I soldi perduti dei contribuenti italiani. {Italian taxpayers’ lost money}
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October 04, 2011



Once upon a time there were parliaments, federal and national governments, and public debates about the future of the nations. There was even the UN that didn’t work very well, but it was still a bit of a representative body. All this is memory, ashes of democratic shadow, dust from the past. It no longer counts for anything. Other organisms have superseded them with acronyms that people find mysterious: WTO, ECB, IMF. Our destiny is in their hands, but we don’t know who directs them, or who decides their objectives. No one has elected the representatives there, but our lives depend on them. The ECB, a bank, can send a letter to a government in power giving the details of the conditions and threatening to sack them and no one is scandalised by that. The WTO can decide to break up the world with the free economy, a parody of free love of the children of the flowers transformed into children of the banks. Production can be entrusted by the multinationals to Indian children or Chinese workers with no Trade Union rights. Transferred from States with really severe regulations regarding the environment, to which companies have to conform or face closure, to States where everything is allowed. What global competition are we talking about? Competition exists where there’s parity of regulations and of rights. It’s more correct to talk about global exploitation, of the general lowering of wages in the industrialised nations, of the loss of social and Trade Union gains that are the fruit of the battles of the preceding generations. Who has decided all this? The WTO. In whose name? The International Monetary Fund puts one in mind of the vultures. Its representatives arrive when a State is in its death throes to protect international interests. Greece cannot go into default straight away. If it were to fail, the French banks that have its debts, could fail. Thus first, it has to sell off its national patrimony and save the banks. The world is bank-centric and there’s no longer even any discussion of social policy. The EU has been substituted by the ECB, the UN by the WTO, the governments by the IMF. The wars themselves have only economic ends, no longer ideological, religious or territorial ones as has been demonstrated by the war in Libya. The banks finance the wars that in turn finance the banks. In the hotel they ask you for your credit card instead of your ID card. At birth they allocate you a fiscal code, together with your personal quota of public debt, before assigning you a paediatrician. The politicians are the waiters of the bankers and we pay the bill.

Senza pensioni

Senza pensioni - {Without pensions} by Walter Passerini and Ignazio Marino
Un futuro da poveri { A future as poor people }
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September 29, 2011

A future as poor people - Walter Passerini and Ignazio Marino

A future as poor people
The book contains the pension bomb, this bomb whose fuse is already alight now and that will deflagrate pretty soon. You can even read it like a thriller, in that it talks about a crime, it’s the crime of the future, of the young generations to whom we are saying how to live out the coming years, why? Because the pension system is what has kept preceding societies together, while the current pension system is not able to support the future generations. There’s a paradox: it’s the young precarious workers together with the immigrants that right now are keeping the social security coffers going, and especially the coffers of INPS. If you like, there’s also another paradox, the fact that young people are prevented from entering the labour market, and thus they are prevented from paying the contributions and building up the coffers of INPS, while at the same time it is the older people who are kept in work. Walter Passerini

Interview with Walter Passerini and Ignazio Marino, authors of "Senza pensioni" {Without pensions}:

Young people and immigrants are paying for pensions
Walter Passerini - My name is Walter Passerini. I’m a journalist and Ignazio Marino and I have written “Senza Pensioni” {Without pensions} published by Chiarelettere. The book has the subheading: “everything you want to ask about your future, but that no one dares to tell you”. The government is not doing anything from this point of view. It is simply operating with a logic of a cash box, but it is not bringing in structural elements that serve young people above all, basically, it’s a matter of giving companies incentives to recruit young people, whose contributions will be able to go not only to the pensions of those who are blessedly already pensioners, but also the pensions of the young people themselves. By now it is pretty shameful and well known that there are so many areas of waste in the social security system, there are the pensions of the politicians, the honourable pensions, and I’m saying nothing about other affairs that have something to do with the various world champions. Just think, there’s a director of a big group, of Telecom, just so as not to name names, that gets 90 thousand euro a month as a net pension. There are distortions like this. Certainly, social security is connected to savings and the reduction in the costs of politics. I believe that the most important thing is connected to work: we have to get the young people in so as to avoid not just them having no pension in the future, but because they no longer see work as a sort of lever for their redemption. What is surprising is that no one talks about these things. We are trying to document the outrage of the people, to give figures even about the reasons and also about some possible exit and it surprises me that a social revolution is not happening, not just for the lack of stable work in Italy, but above all for a pension bomb that we will find at our feet in a few years time.


Italy is no longer growing
Ignazio Marino - Hi to all the friends of Beppe Grillo’s blog! My name is Ignazio Marino, a journalist with Italia Oggi. Ever since I started this profession, I have always been dealing with issues about work, social security, and above all about pensions. Every year, Italy is paying 14.4% in pension spending,


Senza pensioni

Senza pensioni - {Without pensions} by Walter Passerini and Ignazio Marino
Un futuro da poveri { A future as poor people }
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September 25, 2011

It can’t rain all the time, but it can for a bit


The year 2008 was the year of the crack. The paper economy crashed. The architrave on which it was supported, were the banks. They couldn’t fail, the system would have collapsed. The States had to get into debt to finance them. Many of them were already heavily exposed and couldn’t cope. The weakest, as always happens, were the first to give up and they are dragging other States with them, in a castle made of cards. The governments are resigning. It’s happened in Greece, in Portugal and in Spain. It’s completely improbable that for Sarkozy, for Merkel, and perhaps even for Obama himself, the term of office will be renewed.
The saving of the banks has made the governments collapse, but the debt of the States , acquired over the years in the form of bank shares, has taken them back to “start”, like in a board game. The French banks are the ones most exposed to Greece, in their accounts they have tens of billions of waste paper in the form of shares. The same is true for Italian banks that own 200 billion of our debt.
France is weighing up the possibility of nationalising the banks. In Italy the share value of the banks has been halved. The failure of Wall Street is getting transformed into the failure of Main Street, from the paper economy we pass to the real economy, to the streets. It’s the beginning of a crossing of the desert that will change everything, even though we still don’t know in what way. It will not be without pain. In 1929, the twin year for 2008, there was the collapse of the Stock Exchange, and that was followed by the Great Depression that lasted years. In October 1929 unemployment in the United States was 5% and the Dow Jones was at 343. Two years later, unemployment had grown to 17.4% and the DJ index had gone down to 140. The situation got worse in 1933, the equivalent of the forthcoming 2012, with 23.2% unemployment and the DJ index at 90. In 1934, the situation stayed at the same level of seriousness. In 1938, the biggest economy of the world had an unemployment rate of 17.4%, more than three times the percentage before the crisis, and the value of the DJ was at 121, three times lower than in 1929. Then the Second World War happened and it zeroed everything. History never repeats itself in the same way, but it often presents many similarities. The crisis will last a long time and it will be hard. The two year period 2012-2013 could be the worst since the mass sackings in the public sector and the chain reaction of collapses of the private companies.
Some democracies could be at risk. In 1933 Hitler was elected Chancellor. Vis pacem, para bellum. It’s time to face up to the future that is waiting for us with an open face, without any more intermediaries. "Guardala in faccia la Realtà! .......è più sicura!" {Look at reality directly! ……… it’s safer!}

Le mani sulla città

Le mani sulla città {Hands on the city} – by Gianni Barbacetto and Davide Milosa
The 'ndrangheta master of Milano
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September 18, 2011

The bunker


When one era is ending, anyone who is within it can consider themselves to be at the end of time and deny the event or they can look beyond. It’s evident that the capitalistic model based on limitless profit, on growth and on the consumption of the planet has finished some time ago, even though the governments don’t want to recognise that. The war over oil started at least before the invasion of Iraq by Bush senior and carried on up until now with the occupation of Afghanistan and the aggression against Libya is only the most evident of the symptoms of our self-destruction. The model based on individual mobility and on the world transportation of merchandise, Chilean pears in Great Britain or Chinese tomatoes in Italy has no logical or economic motivation. No one stops to ask: “Does growth make sense? And what does it mean exactly? Growth is a new taboo, a modern Moloch that is adored as in the times of Jupiter and Apollo, with its modern priests: the IMF, the WTO, the ECB and its temples: the Stock Exchanges, the majestic headquarters of the banks (the new churches) in the city centres. We are so permeated by the myth of growth that we take it for granted as though it is ineluctable and we live it as an act of faith.
However, when the mirror is broken and the truth can no longer be put off, then, as written by Slavoj Žižek, a Slovenian philosopher and psycho-analyst in his book called "Living in the End Times", there is an elaboration of the mourning that takes place in 5 phases. To explain them, he associates the consciousness of the collapse of our economic and social model to the discovery of a terminal illness. The first stage is denial: the crisis does not exist and neither does the hole in the ozone layer, the glaciers have always been retreating cyclically, the overheating of the planet is an invention of the media, automobiles are necessary for the development of civilisation, the GDP is the alpha and the omega of the nations. The second step is anger: The “no-global” movements are the new barbarians at the frontiers, anyone who doesn’t consume is a pessimist and on the other hand anyone who consumes is a patriot, governments and the multinationals who see the basis of their power collapsing are thinking: “This cannot happen, it cannot happen to me.” (*) Thus the sick person tries to come to an understanding to put off the sad event of his death: new economic manoeuvres, a reduction of the public debt, cuts to social services, increase of every type of taxation, disappearance of pensions.
Economic Cobalt therapy. Then comes the phase of depression in which for whoever is in power, everything is permitted, a behaviour characteristic of the decline of the Western Roman Empire, alliances with criminal powers, widespread corruption, new wars. He thinks about enjoying the life he has left. “Après moi, le deluge.” The last stage is acceptance in which the “power” resigns itself, closes itself in its bunker and awaits the end. In general, the world is somewhere in between the first and the second stage, between denial and anger. In Italy we have moved forward and we are in transit from the third to the fourth phase, between “coming to an arrangement with reality” and depression. In a bit there will be the assault on the bunker. They will never give up (but is it in their interests?). Neither will we.

(* ) quote from Slavoj Žižek

Le mani sulla città

Le mani sulla città {Hands on the city} – by Gianni Barbacetto and Davide Milosa
The 'ndrangheta master of Milano
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September 07, 2011

Before and after the debt


Before and after the debt. The year 2011 is the year for starting again from zero. The company based on debt is finished. The doped growth from non-existent financial resources is no longer possible, neither has it ever been in reality. It was an enchantment that we wanted to believe in. A mirage connected to unsustainable growth passed off as development, when instead it was only predation, pauperisation, and impoverishment of society.
The age of growth, of the GDP as a measure of nations belongs to the past. Up until now , the debt has been a really powerful weapon, more than any nuclear weapon, in the hands of the politicians. Debt and “circences”. Give me an unlimited debt and I will construct anything, I will produce every new manufactured product, I will build the Messina Bridge. A tool superior to the Archimedes’s lever that with one pivotal point made it possible to lift up the world. The ceiling for the debt doesn’t exist. We have lived for decades in a house without a ceiling. In fact it can be raised at will by Obama or ignored by Tremorti.
The politicians have made use of unlimited resources, but non-existent metaphysical ones, and on these they have constructed their power and modelled a society of consumption in which the citizens have mortgaged their future for unnecessary goods. All this has arrived at the end of the line. Growth for growth’s sake is blasphemy, a theft of energy, time and thought. Why grow? For what fucking reason is it necessary to work like slaves for forty or more years and then die? For the profits of the multinationals? For the election policies of the parties connected by hand and foot to the lobbies? For a planet with a percentage of super rich people with telephone prefixes and masses of billions of disinherited people? What’s the meaning of this growth? None. A collective inebriation. An infernal sabbat of eternal debt with resources peddled with open hands by irresponsible economists like a drug. Politics is nude. The debt was the life insurance. It no longer exists. Before and after the debt. Now we have to measure up to reality, look in the mirror and plan a better world. The excess of work, the reduction of one’s own time, the destruction of the environment are bastard offspring of growth and of the debt. Today I feel like an optimist. The year 2011 is the first year of a new world.

Il golpe inglese

Il golpe inglese {The English Coup} - by Mario Josè Cereghino and Giovanni Fasanella
La guerra segreta di Londra all'Italia {London’s secret war against Italy}
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September 06, 2011

It is they who are the crisis


The patrimonial has already been done. At the suggestion of banks and financiers, Italians in recent years have invested in MIB 50 shares, shares on the list that covers the main companies quoted on the Stock Exchange, the ones considered to be the most solid, “safe-deposit box shares”. Anyone who has done that has often lost a good part of their capital. The shares of Telecom, Seat, Saras or Mondadori will never recover their value of a few years ago. The prudent saver who has followed the old adage that on the Stock Exchange, you can invest all that you are prepared to lose and who thus bought State bonds, (extra secure for Tremorti) has already lost a part of their value, at least 10%, if they were to sell them today and they are starting to have serious doubts that the capital will ever be paid back. Anyone who has had the luck to avoid the Stock Exchange and the BTP (State Bonds) has bought an apartment, the safe haven of property, in the big cities and has lost about 20% since 2008 and in tourist zones 30%. The ultra prudent saver who, to reduce the risk, has divided up the investment of their capital: 33% on the Stock Exchange, 33% in State Bonds and 33% in real estate has even lost their shirt. A probable oscillation of loss is between 25% and 30%. To what remains you have to add the patrimonial that everyone from Montezemolo to Profumo has been clamouring for.
In principle it’s possible to agree that the one who has the most is the one who contributes the most, but on two conditions. The first is that anyone who has been a part of the System, has enjoyed the benefits, and is thus completely responsible for the economic catastrophe, let them take themselves out of circulation and let them abstain from giving interviews, and this goes also for Mario Monti, president of the Bocconi University, who has discovered the hot water in the public debt just many years late. The second is that before paying any type of new tax, any type of patrimonial, the dead branches must first be cut out, like the Provinces, the government concessions have to be returned to the State, like the Motorways, and let there be the imposition of the obligation to cover expenditure at any level. Otherwise, it’ll change nothing. The parties, as soon as the moment of crisis has gone by, will once more start the race for the expenses for elections. It is they who are the crisis, as long as this political, entrepreneurial, banking and information class don’t go away, the crisis will get worse. It is they who are the crisis, but they are not in crisis. They have lost nothing and they don’t want to take a step back by even a millimetre while defending their privileges. I’m OK with the patrimonial, but only if it is applied to the parties with the cancellation of election financing amounting to a billion euro. The patrimonial is even better, but only if they cancel the public financing to the newspapers. I love the patrimonial, but only if the pension rights of the parliamentarians are eliminated retroactively. The game has to be harsh, either we all play together, or the citizen won’t play any longer.

Il golpe inglese

Il golpe inglese {The English Coup} - by Mario Josè Cereghino and Giovanni Fasanella
La guerra segreta di Londra all'Italia {London’s secret war against Italy}
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Posted by Beppe Grillo at 06:35 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

August 21, 2011

Survival Guide - Eugenio Benetazzo

Crisis Survival Guide
The night has to go by, but in the morning you have to arrive alive. Anyone who has been saving all their life, today is afraid of losing everything and having no money for their old age. The pension is getting further and further away and is by now having a competition with death to see which arrives first. Eugenio Benetazzo is giving some advice on how to protect yourself and he foresees (and he’s not the only one) a Europe with two different currencies: Euro 1 and Euro 2. I don’t need to say that we would be in Euro 2 until they create a Euro 3. Face up to the catastrophe with optimism and I’m warning you: don’t get into debt and if you are already in debt, get out if you can.

Interview with Eugenio Benetazzo, independent stock market trader:

The collapse of the PIGS
The sovereign debt crisis started two years ago with the implosion of Greece. Europe intervened at an institutional and supranational level guaranteeing everything to everyone, saving not just Greece, but then in a chain reaction, helping the big banking groups to avoid phenomena of financial contagion.
Two years later, we realise that that mythical rescue of Greece was a financial “illusion” and today we find ourselves experiencing an economic stalemate with indirect financial repercussions even on the other countries of the Mediterranean. After Greece, it’ll be Ireland’s turn, then Spain’s and Italy’s.
By now, Italy has been under siege for more than three weeks and this presupposes a difficulty to keep not just the price and the solvency of the Italian Government bonds, but also the credibility that the country has with the international financial communities. The choices that have been recently put into effect by means of the emergency measures of the current executive are the umpteenth proof of how those who are governing us are objectively unprepared and also incompetent, in that it was fairly plausible to imagine what would happen to our country over the years. Thus, for the umpteenth time, they have created the circumstances for sorting out this situation of difficulty, but in the medium and long term the measures that have been recently put into practice will be palliative. To say it like the British Prime Minister, David Cameron, even Italy will be obliged to take the so-called little blue pill, that is the really bitter medicine that will give the country a phenomenal momentous restructuring of the whole economy, starting with politics and going through to the administration of public affairs.


Euro 1 and Euro 2: two currencies for Europe
By now alerts are coming in from all sides, from academia, we mustn’t forget Roubini, Fitoussi, we mustn’t forget Attali, we mustn’t forget Zingales, and from the financial communities with big operators and fund managers


Italian banks
Italian banks or anyway the Italian banking panorama at the moment has to be divided into two sets: on the one hand there’s the big banking groups that represent the main competitors of the sector,


Soldi rubati - di Nunzia Penelope

Soldi rubati - by Nunzia Penelope
I cittadini sono poveri perché i delinquenti sono ricchi {The citizens are poor because the delinquents are rich}
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August 19, 2011

The citizens’ austerity budget

Sacrifices have to be made by the citizens. Sacrifices are decided by the parliamentarians. The parliamentarians do not make sacrifices. It’s the theatre of the absurd. Perhaps we have lost the sense of reality. The media use the “confusion technique” and we peck at each other like “Renzo’s chickens” before they have their necks wrung. Let’s try and redefine the rules. The sacrifices have to be made by everybody. Sacrifices are decided by and voted on by the citizens. Parliamentarians make sacrifices. Like that it’s better.
In the minipost "La manovra economica" {the austerity measure} I proposed:
- Cut military expenditure and bring back the troops form fighting in Libya and Afghanistan
- Abolition of all parliamentary pensions in the absence of a contribution payment period equal to that of all other citizens
- Immediate abolition of public financing of parties starting from next September
- Abolition of direct and indirect financing to newspapers with retroactive effect starting 1 January 2011
- Contribution of 60% of the capital legalised with the Fiscal Shield
- Nationalisation of all the concessions in the hands of private companies
- Immediate abolition of all provinces. 50% reduction in the number of parliamentarians
- Abolition of double and triple pensions
- Maximum of 3,000 euro a month for all pensions
- Cancellation of the Great Useless Public Works (TAV Val di Susa 22 billion, Messina Bridge 4, Gronda Genoa 6, etc.)
- Elimination of the Regulatory Authorities and the inflated salaries of politicians placed there.

I’ve received more than 500 contributions. I cannot, for reasons of space, list them all. I’m just publishing a few. The measure that got the most support in absolute was the introduction of the ICI property tax on the properties of the Vatican. Many propose the exit from the Euro or immediate default. Here’s a brief summary:
- Abolition of public financing to private schools
- Abolition of financing to private hospitals
- Possibility for all documentable expenses to be deducted from income before the payment of tax to uncover tax evasion estimated to be 130 billion
- Increase in the rate of tax on empty homes and offices to bring down prices in the rental market and reduce building speculation and the laundering of mafia money
- Recovery of the 98 billion euro that slot machine companies have not paid in taxes
- Elimination of every “golden handshake” for public positions (for example: regional councillors)
- Halve the number of parliamentarians or alternatively close down the Senate.
- Have a tax on prostitution
- Eliminate all the official dark blue cars
- Eliminate multiple pensions
- Facilitate distance working
- Oblige every public body to keep a balanced budget
- Abolition of public funding to hunting activity or of a private nature.
I invite you to keep going with other suggestions. The measures put forward will be voted on using a poll on the blog. For each one there’ll be a calculation of the potential saving. A summary document will be available on the Internet and copies will be sent for information to the parliamentarians who will be asked to discuss the points during the inevitable Autumn budget debate. They will ignore this, but only for a limited time. They will never give up (but is it in their interests?). Neither will we.

Soldi rubati - di Nunzia Penelope

Soldi rubati - by Nunzia Penelope
I cittadini sono poveri perché i delinquenti sono ricchi {The citizens are poor because the delinquents are rich}
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August 12, 2011

Money under the mattress

Money under the mattress – Interview with Beppe Scienza
For those with money, money has become a worry. Once upon a time, money was a source of security. Today having money means you don’t sleep at night.
Investments in state bonds can become waste paper as happened in Greece. Banks can go bust. Shares can lose 5% a day and anyway they have values like telephone prefixes. Derivatives and futures are blasphemy for a saver. Bonds and funds are pure hemlock. Invest in currency? Which currency? The dollar or the euro that are falling together, or the Swiss franc that’s overvalued and at risk of falling? Crikey, it’s worth being poor!

Interview with Beppe Scienza, of the Mathematics Department at the Università di Torino

An idea that is not so odd

”Put your money under the mattress seems like something said as a joke, an exaggeration, and yet to think about it, this idea is not as odd as it seems at first sight and if a lot of people have this idea, they’re asking me, they’re thinking about it, they’re wondering if it makes sense because there is even something worthwhile in the idea, and there’s also a valid reason. Let’s see what doesn’t happen, the nasty things that don’t happen to you if you have your money under the mattress.


Protection from taxes on patrimony
Another current topic is a matrimony tax, but there has been an infamous tax even though it was not so really terrible, it was done by Amato in 1992 on current accounts, on bank deposits of 0.60%. At that time, this tax hit those who had money in a current account and those who had money in a savings account but not those who had their money under the mattress. Thus having your money in cash allows you to avoid the patrimony taxes. Thus there are non-foolish reasons, if one says: “I want to put my money under the mattress”. I won’t advise them to go to a psychiatrist. This is not a madman. It’s a person who is rightly worried, having been burned by so many rubbishy things that have been sold to them, fearful of falling into other traps. First of all: It’s not absurd to put your money under the mattress. Is it possible to do that? Yes, it is possible.


Return to the past
I would say that there’s another solution that is worth considering and once more this is a return to things of times gone by, and they are Post Office interest-bearing securities. Is it a retrograde step? Perhaps it is. Certain modern things are no good. Certain finance ideas are no good. I prefer to avoid them. I prefer a house built on stilts in the lake to a house that is collapsing even though it’s been built by a great architect. The Post Office interest-bearing securities have almost all the advantages of money under the mattress, except for one, that one is that if the Italian State goes bust, they are certainly involved in that collapse.


" Beppe Scienza

Soldi rubati - di Nunzia Penelope

Soldi rubati - by Nunzia Penelope
I cittadini sono poveri perché i delinquenti sono ricchi {The citizens are poor because the delinquents are rich}
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August 10, 2011

The sacrifices of public concessionaires


Sacrifices. This is the buzzword for Summer 2011. Everyone agrees that, so as not to collapse, sacrifices are needed. However, none of those making this declaration is prepared to make sacrifices. They prefer it to be the others giving a good example. The citizens without means, let’s even say the ones who are almost destitute, have already understood that the touch paper will stay in their hands. For some time they are used to the torments of this post-feudal state. They have the highest taxes in Europe, the lowest salaries, cuts to social services every ten years, starting with health and education and the de facto cancelation of the pension. The State has become a bottomless pit that doesn’t even give you back an echo.
Now there’s talk of privatisation, of putting public goods up for auction, the State companies, from ENI to Enel, to make money. It’s a spoliation done without the agreement of the citizens who are the legitimate owners. No State property has to be sold, in fact the contrary is true to have the possibility of development. To hand over sovereignty on key companies, for the country means abdicating any international role, as has happened for the wretched hand over of Telecom Italia in exchange for debts, the company that was at that time the country’s driver of innovation, led by D'Alema, the merchant banker of Gallipoli.
Sacrifices? Let’s start with the concessionaires, with the ones that use public goods in concession to make a mountain of money for us. To be brief, I’m just citing two, but there are many more: Benetton and Berlusconi. Benetton has the concession of certain branches of the Italian motorways by means of Atlantia Spa, a company quoted on the Stock Exchange. In 2010 it had an income of 3,750 billion euro with a profit of 701 million euro. Anyone who pays motorway tolls knows how much the tolls have increased in recent years. Atlantia is not the only one that has as a concession the motorways that have already been more than paid for through our taxes, through the taxes of our fathers and grandfathers. The question we need to ask is simple: “Why should private companies benefit from State property? In certain European countries, motorways are free, in that their costs have already been paid by the citizens. They want to delegate Atlantia to be an administrator? Let them do that for just the costs of maintenance with a tendering process. Does the State want to rake in the gains to reduce the debt? Let it do so! Does it want to make them toll free, as would be right, to reduce the costs of transport, costs that fall to the companies and the citizens? Let it do so! But what it cannot do is make private companies rich with public goods.
Let’s consider Berlusconi, l'imprenditùr. The guy who today is asking the country for “sacrifices” just pays one per cent of the turnover of his company for the government concession of three national frequencies. The “ad vitam” bonus he gets thanks to the sempiternal D’Alema, who when he was Prime Minister passed the 1999 law number 488 approved (page 32, article 27, comma 9). I believe that it is right, in a time of sacrifices, to review the law and to shift the one per cent of the concessionaire Berlusconi to at least 30% (and I’m keeping that low) or to put the frequencies up for auction. Dear concessionaires, the party is over. Before asking any citizen for a single extra euro, the State has to collect itself together and get remunerated for what it owns. They will never give up (but is it in their interests?). Neither will we.

Soldi rubati - di Nunzia Penelope

Soldi rubati - by Nunzia Penelope
I cittadini sono poveri perché i delinquenti sono ricchi {The citizens are poor because the delinquents are rich}
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August 03, 2011

Soft default, almost soft, almost in underpants


The default arrives when it arrives. And then? What will happen? Let’s imagine three scenarios: “soft default”, “almost soft”, “almost in underpants”. The soft default sets out a “lifting from current accounts” (Amato-style),a generalised increase in indirect taxes, the reintroduction of ICI, the raising of the pension age, the block on new recruitment to the public administration, an increase in local taxes, in the costs of transport, water, electricity and gas. However the soft default is improbable with the public debt over 1,900 billion and the banks that are not worth a thing, holding on to 220 billion in State bonds, 85 billion in unpaid loans and an immense real estate patrimony that sooner or later can be devalued. To place our bonds on the market, Tremorti always has to offer greater sums in interest. In 2011 we’ll have to pay between 80 to 90 billion. Perhaps increasing the interest rates is no longer enough. The mid-August bond auction has been cancelled for fear it’ll be deserted.
Now let’s see the consequences of the “almost soft default”. Net patrimony tax on movable and immovable property, elimination of the Provinces and grouping together of the towns and villages with fewer than 5,000 inhabitants (these measures are praiseworthy), rise in direct taxation, rise in Irpef {income tax}, increase in health costs, doubling of taxation of income from financial assets, elimination of tax discounts to the regions and the autonomous provinces, introduction of the “fair contribution” of 15% for every income above 30,000 euro. Obviously added to these measures you add those of the “soft default”. In Italy, there are 19 million pensioners and about 4 million public sector employees that on the 27th of every month, have to receive their pension or their salary. There are millions unemployed and there are hundreds of thousands of companies that have closed down. There’s lower tax revenue for the same costs, covered until now by the debt, by the sale of State bonds, and this will lead to a collapse. The cover given by bonds has become too limited.
Thus let’s go on to the scenario that is practically “in underpants”. Block on the paying back of State bonds when they come due, for Italian citizens, collapse of some banks, cuts to the salaries of public sector workers, cuts to pensions by 20/30%, temporary block on getting access to your current account with a maximum daily amount of 100/200 euro, suspension of credit cards, privatisation of the Eni and Enel quotas and any State good that has a market. Measures to be added to those for the “soft default” and the “almost soft default”. In any case, there’ll be a period of recession and of collapse in consumption; unemployment will go up and secessionist pushes will increase, in the South and in the North. “All is Chaos under Heaven, and the Situation is Excellent”, Mao Tse-Tung.

Soldi rubati - di Nunzia Penelope

Soldi rubati - by Nunzia Penelope
I cittadini sono poveri perché i delinquenti sono ricchi {The citizens are poor because the delinquents are rich}
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July 27, 2011

Mad Banks


What is there that is less democratic and obscure than a bank? I’ve thought about this for a long time, but I’ve found nothing. In recent days, there’s been a discussion about presumed kickbacks in relation to the reconversion of former industrial areas in Sesto San Giovanni and the involvement of the PDminusL person, Penati, who was mayor at the time. Basically there are investigations about a circle of bribes to increase the value of the land formerly occupied by Stalingrado d'Italia with the idea of constructing buildings on the land. The usual story that has already been seen in Santa Giulia and in dozens of other similar operations. Destruction of the territory, contiguity between construction companies and politicians, and environment devastated for generations. The apex of the triangle, the banks, however, almost come out of it clean, and often they are not even cited. Sesto San Giovanni docet.
"Banco Intesa takes action on Sesto. Detailed negotiations for new offices with 5-6 thousand office workers in an area of the former Marelli. The official agreement has not yet been reached, but it’s certain that the negotiations are moving ahead fast and the signature on the sales document could be really soon.” (Corriere della Sera 26/1/2001). In response Penati said: “If the hypothesis of an agreement is formalised, Banca Intesa will be welcome. The regulations in our regulatory system make it possible for the establishment of high-tech service industry on the areas that are no longer used.” Intesa decided not to go ahead, but it was still present. Pasini, the adventurous owner of the Falck area who declared that he had handed out bribes destined for Penati, at a certain point, sold everything to Risanamento di Zunino, who bought the area thanks to a team of banks led by Banca Intesa.
At that time, Risanamento was a group that was a rising star, the owner of the area of Santa Giulia in Milan, a massive residential neighbourhood used to bury every type of carcinogenic refuse but it finished up under sequestration. However, Risanamento mysteriously always had the trust of the banks and thanks to them it avoided bankruptcy. The same banks that refuse to give an overdraft or a loan to a small company were creditors of a company with debts of THREE billion. Which banks? Unicredit, MPS, Banco Popolare and, naturally, Banca Intesa, that is now IntesaSanpaolo.
Penati is also in the eye of the cyclone for the purchase of 15% of the Milano – Serravalle (for an inflated sum) from the entrepreneur Marcellino Gavio. Penati, president of the Province of Milan, asked for and received a loan of 250 million. From whom? From IntesaSanpaolo who obviously didn’t verify the coherency of the investment. According to Albertini, the former mayor of Milan, Gavio raked in a net profit of 179 million. IntesaSanpaolo was also a partner in the disastrous Alitalia affair (disastrous for the coffers of the State) saved to be then gifted to Air France, but also in Telecom Italia with shares bought at 2.2 euro when anyone with a tiny bit of knowledge of the sector and of Telecom would have paid half that. In fact, IntesaSanpaolo is now obliged to devalue investment with the Telecom share decidedly below one euro (today at 0.888) with a loss of 120 million euro. The ownership and money of the banks doesn’t belong to the banks, but to the current account holders and the shareholders.
It cannot be used “ad minchiam" {frivolously} for lobbies or adventurous speculation. The “fiato sul collo” {breathing down your neck} approach adopted for the towns has to be replicated for the banks that are pulling the strings of the marionettes of politics in the shareholders’ meetings and in every possible occasion. They will never give up (but is it in their interests?). Neither will we.

Soldi rubati - di Nunzia Penelope

Soldi rubati - by Nunzia Penelope
I cittadini sono poveri perché i delinquenti sono ricchi {The citizens are poor because the delinquents are rich}
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July 19, 2011

Stolen money – Interview with Nunzia Penelope

I soldi rubati
Now that I’ve read the book "Soldi rubati" {Stolen money} I feel better. Our illegal economy is the best in the world. With corruption, waste, European fines, mafias, tax dodging , I’ve lost count: 500 billion, 600 billion a year? "Tra questa immensità s'annega il pensier mio" {In this immensity my thought drowns} but however I’ve got a little doubt. If this mountain of money were to come into the hands of Tremorti, or Bersani or Berlusconi, how many TAVs would they do, how many Messina bridges and how many incinerators? In a blink of an eye, Fassino, the military of the Val di Susa, would transform Italy into a logistical aircraft carrier. We find ourselves between tax dodging waste and destruction. "io nel pensier mi fingo, ove per poco il cor non si spaura" {I pretend in my thought , to the point that my heart is almost overwhelmed} .

Interview with the journalist Nunzia Penelope, author of "Soldi Rubatii":

Italy: collapse or decline

My name is Nunzia Penelope. I’m a journalist dealing with the economy and I’ve written a book to show that illegality is not just an ethical problem, it’s a cost. Our public debt of 1,900,000,000 could be reduced to zero in 10 years if we started fighting tax evasion and corruption. That means 120 billion a year for the first year and 60 billion for the second year.


The bottomless pit of tax evasion and corruption
When I go out and about, I hear people who shrug their shoulders and say: “OK, but how can you get back the money from tax dodging?” Shall I tell you how? For example counterfeiting that can seem to be very banal, that stuff that means you can buy fake handbags on the beach from the vendors from the Maghreb. Counterfeiting costs the Italian economy 18 billion a year.


Money wasted on the Great Useless Public Works
The problem is if we were to recover this money, how would it be used? Because naturally in an ideal world this money clawed back from the thieves could be used to increase pensions, to offer redundancy pay to all who need it, to pay unemployment benefit, for services and so on. In reality we live in a country where one of the reasons, that’s certainly mistaken,


Soldi rubati - di Nunzia Penelope

Soldi rubati - by Nunzia Penelope
I cittadini sono poveri perché i delinquenti sono ricchi {The citizens are poor because the delinquents are rich}
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June 17, 2011

Tremonti on the Parthenon


photo: reelaboration Financial Times

To know what our future will be like it’s enough to observe what’s happening in the shadow of the Parthenon, in Syntagma Square, where for days there’s been a confrontation between the police and the citizens of Greece. Papandreou, the Prime Minister of Greece, will next week re-emphasise his plan for “reforms” to get a new international loan. The reforms are the usual ones in the face of collapse. Auctioning off of national resources amounting to 50 billion euro by 2013 (the so-called “privatisations”), cutting public services, or “restructuring” with the reduction of 20% of state employees, about 150,000, in the next four years as well as the increase in direct and indirect taxes. The cost of living will go up and an increasing number of people will not be able to afford it. It’s probable that Papandreou, who in order to save himself is suggesting having a government of “national unity” (does this remind you of anything?) will soon have to resign. There would then be new elections with a probable victory of the Right as happened in Portugal and as, in all probability, will happen in Spain.
The multinationals have been reducing their presence in Greece for some time now, and some have already abandoned it. To reduce the risk they make sure they are paid by the State in cash, as happens in the pharmaceutical sector. In a year and a half, from the moment that the crisis was announced, Greek banks have lost 17% of their deposits, about 40 billion euro, because of transfers carried out by international companies. The Greek default will create a domino effect with unforeseen consequences even in the European banking system. The banks with the greatest exposure to the collapse of Greece are the French banks with 53 billion euro concentrated in Crédit Agricole, Sociétè Générale and BNP Paribas. But they are not the only ones. There’s also Germany with 34 billion, the UK with 13.1 billion and Portugal (the next on the list for default) with 10.2 billion.
In Italy the debt is moving towards 2,000 billion in 2012. The relative risk of our bonds is increasing and has gone above 200 points in relation to the German bund. Basically Tremorti has to pay more interest to sell our debt, our promissory notes and he is scraping the barrel with taxpayers (individuals and companies) by means of Equitalia. The Greek default could be the new “Lehman Brothers” with instead of the banks, the States together with the banks. No one wants to open Pandora’s box, but perhaps it has already been opened and no one has said anything.

Come cambiare il mondo

Come cambiare il mondo (Libro) {How to Change the World}
"Perché riscoprire l'eredità del marxismo" {Why rediscover the inheritance of Marxism}

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May 22, 2011

The bubonic Tremonti


Denying the existence of the plague is the best way of spreading it. Denying the existence of a possible Italian default is the best way of making it happen. In 1720 there was the last occurrence of the bubonic plague in Europe, in Marseilles that at that time was one of the most important ports of the Mediterranean. The death rate was 56% and out of 90,000 inhabitants, 50,000 died. The city appeared to be well equipped to stop the spread of the contagion. It had an isolation hospital, a leper hospital and strict entry regulations for ships coming from the East and it had staff dedicated to applying the regulations.
Everything started with the arrival of a ship loaded with merchandise from Sidon. Some of the sailors on the ship died during the journey. The captain, called Chataud declared the deaths when the ship entered the port of Livorno. The city’s medical officers wrote on the health certificate that they had to be kept on board, as there was “a malign pestilential fever” on the ship. Chataud notified the Marseilles port officials, but instead of quarantining the ship, they had it come alongside the hospital’s pontoon where the crew went ashore and the goods were disembarked. The doctors who examined the numerous infected sailors declared that it wasn’t a case of the plague, but a common fever. The sailors and the citizens of Marseilles died in a few days and some doctors finally said that it was a matter of the plague. The ship was quarantined, but the passengers were quarantined just for 15 days, for those ships without cases of infection. Meanwhile, the administrators of Marseilles kept the news of the plague secret, (but it leaked out) so as not to cause a crisis in commercial activity. The surgeon doctor at the hospital continued to deny that it was the plague and he classified it as a fever due to “fruit that had gone off as it was over-ripe”. The citizens were disoriented. On the one hand they suffered the effects of the illness that cut them down like a scythe cuts down ripe wheat, on the other hand they felt reassured by the officials and the doctors. It got to such a point that the communal ditches were no longer sufficient to hold the dead. The Parliament of Provence had to intervene and it completely isolated the city of Marseilles, but it criticised the doctors who had diagnosed the plague calling them “alarmists”. The city council did not admit that the plague was spreading even when presented with the evidence. In less than a year, one of Europe’s most flourishing cities was destroyed.
After that, the “denialist” doctors published an academic book in which they explained that the plague was not an infectious disease, since most of the officials survived. In fact they had reached safety together with 10% of the population (the richest people) who managed to escape before Marseilles was quarantined. Bertrand, a holy hermit, was the only one who tried to warn the people of Marseilles in time, and he was accused of having spread the disease and was thus burned at the stake. Standard & Poor's has cut its rating outlook for Italy from stable to negative. Tremorbi, where are you hiding?

Spegniamo il nucleare

Spegniamo il Nucleare {Let’s shut down nuclear} (Book)

Survival Manual in the face of nuclear lies
by Beppe Grillo
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Posted by Beppe Grillo at 10:47 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 10, 2011

Welcome back Drachma


A gentleman called PIG, is about to go bust. He’s got a great idea. In order to survive, he’s selling his debts. He calls them State Bonds. Many people are buying them; they only want a low rate of interest and a tiny bit of interest when the capital is returned when the loan arrangement ends. Mr PIG has found the system for living above his means. He continues to get debts and to sell them. His family accounts however get worse and to protect themselves, those who buy his bonds, are asking for a higher rate of interest. Mr PIG is obliged to increase the interest rates. Over time, the situation becomes critical. The number of people buying the debt goes down as they are afraid of the risk. The debt is no longer triple A minusminus, but a triple B plusplus. The time will come when Mr PIG is no longer able to pay the interest. The neighbours of Mr PIG who have lent him most of the money, have nothing to gain by making him go bust. If he goes bust they will lose their money. Thus they offer him a loan with lots of conditions, something they call a “bail out”.
Mr PIG is obliged to accept so as not to go bust. When the money from the loan dries up, Mr PIG finds he’s paying more interest than before. Those who have lent him money have only gained time and now they are doubly at risk, they can lose both the State bonds and the loan that is the bail out.
Mr PIG, technically a bankrupt, is thus able to raise his voice as though it were he that had lent money to the others. He threatens to restructure the debt. In other words, those who bought his bonds at 100 will see the value halved to 50 and Mr PIG will be freed of half the debt with no one being able to stop him doing so. The creditors, who are ever more worried, don’t know which way to turn. In fact, the State bonds, like those of any company quoted on the Stock Exchange, can lose their value. The creditors have one thing in common with Mr PIG, the currency. Once upon a time, Mr PIG used the Drachma, now the Euro. His behaviour is putting at risk the good name of the currency of the virtuous gentlemen that have no debts or few debts. The Euro cannot be compromised. The neighbours can throw out Mr bankrupt PIG from the Euro and see part of their credit go up in smoke for ever or continue to give him finance with one “bail out” after another. Germany and France have about 250 billion dollars in Greek State bonds and because of Mr PIG, the Euro is losing value in relation to the dollar and the yuan. Mr PIG leaves the Euro and his State bonds become waste paper. I would like to find the logic and the moral of the story, but I cannot.

2011 Election Tour

Follow the route on Facebook and on Twitter.
Publish videos, comments and photos on social media using the tag "#m5sTour".

The dates and the towns of the election tour Tuesday 10/5 Ravenna (h.18), Cesenatico (h.20.30), Rimini (h.21,30); Wednesday11/5 S. Benedetto del Tronto (h.13), Vasto (h.15,30), Nardò (h.21,30); Thursday12/5 Cosenza (h.17.30), Naples (h.21.30); Friday 13/5 Latina (h.11.30), Pomezia (h.13), Grosseto (h.17.30), Siena (h.20), Arezzo (h.22).

Spegniamo il nucleare

Spegniamo il Nucleare {Let’s shut down nuclear} (Book)

Survival Manual in the face of nuclear lies
by Beppe Grillo
Buy your copy

Posted by Beppe Grillo at 05:41 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 01, 2011

Enterprises for the future

Enterprises for the future

In the year 2010, 11,000 enterprises went bust in Italy. An increase of 20% over the figure for 2009. In 2011, the trend has not improved. In the first three months, each day 30 enterprises have closed. A silent disaster that relates to all sectors. The worst hit is the industrial sector followed by construction, commerce, and telecommunications. The greatest number of failures has been in Lombardy, followed by the Marches, then Friuli and then Veneto.
Lombardy and Veneto form the engine of the Italian economy and that’s the area most badly hit by the crisis. The figures are confirmed by the ciies where there are the most companies that are closing up shop for ever. The first is Milan, the second Treviso, third Bergamo, fourth Vicenza, fifth Venezia, sixth Brescia. In a bit it’ll be the people of the Po valley that’ll have to clamber into the boats. Ever more frequently, it’s the small and medium sized companies that are going bust. By now there are truly very few big companies, almost all of which are State concessionaries, like Benetton, Mediaset and Telecom Italia, or de facto monopolies like Eni and Enel. Names that have been with us since our infancy like Omsa "Che gambe!!" {what legs!}, Bialetti with “Omino coi baffi” {the small man with a moustache} and Indesit with our very first washing machines. To have an enterprise in Italy is an act of heroism, many have thrown in the towel, others have emigrated, others still have never got started. The banks give you financing or a credit only if you don’t need it. However there’s no solution for the development of the Italian enterprise. And without that what’s left is just the definitive collapse of the State and mass emigration (but where?). The companies that get rewarded in this country benefit from financing from the public purse or from the banks. They have political recommendations; they deal with activities that are contrary to ethics, as happens for the feeding troughs of nuclear and of the incinerators. OK, these companies don’t go bust. The blog wants to think about the other ones. From today it’s offering the possibility for existing companies to have access to funds aimed at ethical companies. The requests for financing are to be sent to the blog by using the forms in the area called "Imprese per il futuro" {enterprises for the future}. They will never give up (but is it in their interests?). Neither will we.

Grillo is back

Beppe Grillo is back - Tour 2011 (DVD e libro)
your copy today.

Posted by Beppe Grillo at 07:18 PM in Economics | Comments (6) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 20, 2011

Is the stomach revolutionary?


When the French asked for bread, Marie Antoinette, wife of King Louis XVI, exclaimed: “If they have no bread, let them eat cake.” What followed was the Revolution with its baskets of chopped off heads. Mubarak, Ben Alì and Gaddafi instead of cake, have distributed hot lead to the people. A few hundred dead among the demonstrators has not been useful in stopping the North African Revolution. Mubarak has been struck down by a heart attack, Ben Alì has disappeared and Gaddafi is taking refuge behind snipers and the isolation of his country. Is what is happening now like the “assault on the bread ovens” or a revolution for democracy, or both? Is poverty revolutionary? Is the stomach revolutionary?
There’s an economic indicator, called the misery index, created by Arthur Okun and it measures the poverty of a State. The index is found by adding the rate of unemployment to the inflation rate. The higher the value, the greater the misery. In the latest classification, Egypt was in 6th position, Greece (close to defaulting) in 7th place and Tunisia in 9th place. A relationship is evident. But who is seen in the first four positions? Chavez’s Venezuela is at the very top, followed by South Africa, Spain and Pakistan. These countries are among those marked out for forthcoming revolts in the near future. The negative position of Spain is surprising, as is the astonishing position of Italy, in 23rd position with a better score than the average for the EU and better than France, UK and the Czech Republic. Finally a positive score. Let’s split the castanets with Spain (misery index 22) with 10, 1,- less than half (source: Eurostat and IMF).
Our score relates to the year 2010 and it is made up of 1.5% inflation and 8.6% unemployment. But these figures exist just in the books of “Tremorti’s” dreams. In fact, ISTAT itself has given a figure of 12% for unemployment (3.4% higher than the official value), but in reality, if you consider those that are no longer looking for work, it’s about 14%. Inflation is calculated on the basis of a ‘basket’ that does not take account of the real cost of living. Anyone who is paying the electricity bill, central heating, petrol, motorway tolls and basic necessity goods knows very well that inflation is at at least 5% a year (3.5% higher than that declared). If we use the ISTAT figure for unemployment, then Italy works out at 13.5%, close to Ireland and Portugal. If we keep going, adding in the extra 2% of discouraged unemployed people, we arrive at 15.5– a hair’s breadth from Turkey and Tunisia. Finally, if we make use of the perceived inflation we reach the top with 19 as the score for the misery index, so in fifth position on a par with Egypt and ahead of Greece.
At the time of ‘Bottino Craxi’, there was optimism of desire, today, there’s the optimism of desperation. The people are no longer given cake but cannon balls. Who knows how it will turn out this time.

Scudo della Rete
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P.S. Meetings for the creation of 5 Star Civic Lists have been organised in the following towns:
Abano Terme, Arezzo, Arzergrande, Chivasso, Crotone, Este, Montignoso, Montefiascone, Ospedaletto Euganeo, Rocca Priora,Sennori, Vasto, Vimercate
Suggest a meeting in your own town .

Posted by Beppe Grillo at 08:33 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 03, 2011



What’s happened to Europe? Has it ever existed? In the beginning there was the euro and after that nothing has happened. If Europe is just a currency, in its absence Europe doesn’t even exist. Since 2008, the year of the crisis, in the European meetings they have discussed the public debt, the ‘spread’ for the different shares, held by the banks, default and a triple A rating. The European Banking Union has got substituted in people’s imagination with the actual European Union.
There’s no trace of a common foreign policy. The Mediterranean is in flames and Europe is as mute as ever in these situations. And yet what happens to Egypt, and more generally to North Africa, could lead to a new war for the Arab countries against Israel and an increase in the price of oil that cannot be sustained by the PIGS economies that are already on their knees. On the other side of the Atlantic, Obama has intervened, basically to get rid of Mubarak, while all Europe can do is to issue a communication to Trichet about the exposure of the European banks in relation to Egypt.
I have been to Brussels. I have seen the school children coming from different countries visiting the European Parliament. I had the impression that the youngsters were on a trip to a funfair, to a gigantic mausoleum inhabited by functionaries and euro-deputies, a ‘Club Med’, a cemetery for elephants that houses the residue of politics like Albertini and Occhetto or Mastella, the refugee from Ceppalonia. For others, it’s a trampoline towards the national parliament. What Union can we talk about if there’s no homogeneous fiscal system, common research and development, a shared policy on the flow of labour and of political refugees, a shared battle against the mafia?
Russia is represented by Putin, America by Obama China by Hu Jintao, but Europe? Who represents Europe? The first name that springs to mind for most people is Angela Merkel who has no European position. However the identification of Europe-Germany lies in the facts. Without Germany, this Europe held up by the German economy, would disappear. And yet it is getting wider, it is getting ever longer, like a blown-up balloon, we have got to 27 states, each of which in order to guarantee its future, has to run like Germany or risk losing national sovereignty, after monetary sovereignty, as is happening in Greece and Ireland. Italy, in this company, is playing the part of the one that signs up in principle to every directive about agriculture, commerce, environmental protection but then ignores them. Implacably, every year, we are getting hundreds of millions of euro in fines. We are Europe’s Tafazzi {masochistic comic character}. “If we are together, there’ll be a reason”. Perhaps we need to hurry up and find the reason before we get the order to "Break ranks".

P.S. Meetings for the creation of 5 Star Civic Lists have been organised in the following towns:
Alatri, Arezzo, Arquata Scrivia, Chioggia-Sottomarina, Chivasso, Codogno, Grezzana, Modugno, Nardò, Nerviano, Nettuno, Policoro, Rocca Priora, Salsomaggiore, San Giuliano Milanese, San Martino in Rio, Statte, Vigonovo
Suggest a meeting in your own town .


È stato morto un ragazzo (DVD) {A young man in a state of death}
The film about Federico Aldrovandi who encountered the police one night.
Buy your copy

Posted by Beppe Grillo at 10:46 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 30, 2011

The flying prick


While Italians are hypnotised by the bunga bunga journalists and by the wiretaps based on flaccid arses, the economic collapse of the Country is at our door. At the Davos conference they are wasting their bets on the chance of our defaulting. The latest lifejacket from Tremorti is to bring about the equation: Public debt = private savings. He has not made a secret of this. The country with the highest taxes in Europe wants to go beyond that. Federal taxes are approaching and they’ll be retroactive. The only true success of the Lega that will administer the coffers of the Local Authorities.
You can hear a sound in the air that takes the form of a flying prick, the one that makes the sound of the straight property tax. They have sent Giuliano Amato on ahead. A guy that got directly into our current accounts and took out 0.6 per cent. Amato is part of that Socialist party that made the public debt explode, a continuous operation performed diligently on behalf of Berlusconi, the successor to ‘Bottino’. Amato proposes grabbing 30,000 euro from a third of the tax payers, the richest ones, to save the country. A measure that affects those who pay taxes, but not the big wealth holders. Whoever has paid, will pay more. Perhaps they will have to get a mortgage on their apartment. They say: “But it’s to save the Nation! Whoever has the most has to give the most.” As a principle this reasoning is not flawed, but to throw into the furnace of a public debt that is growing at 100 billion a year something taken from the wealth without making structural measures (the abolition of the Provinces and the grouping together of the towns with less than 5,000 inhabitants, for example) will just punish those who have always paid up to the last cent of their taxes. With what cheek can this be done by a government that has launched the Fiscal Shield with taxation at 5% on that wealth that had completely dodged taxes? A Ministry of the Economy that sends detailed reprimands for tax declarations with errors of 40/50 euro that does not even minimally tackle the 100 billion a year of tax dodging? ‘Tremorti’ should send a thank you note to the faithful tax payers, and give them a discount on their next income tax payment.
Since last year a few million public employees have had their salaries frozen. Inflation is not waiting for them and every month they are losing something (like Anna in the song by Dalla). Anyone who is today below the age of 50, will never retire. If they succeed it’ll be a miracle or by recommendation or a regional councillor or a parliamentary deputy. We have gone beyond the fruit course at dinner and the drink after the meal. We are clearing the table and the State is preparing to collect the crumbs from underneath the table.


È stato morto un ragazzo (DVD) {A young man in a state of death}
The film about Federico Aldrovandi who encountered the police one night.
Buy your copy

Posted by Beppe Grillo at 09:41 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 27, 2011

The currency war

Zeitgeist – Dear Money
A weak currency makes national products competitive. Exports go up and the GDP increases. The other side of the coin is the increase in inflation. Most raw materials are bought in dollars, a depreciation in the value of the currency of one country in relation to the dollar means an increase in the price of oil, of gas, but also of soya and of wheat. Thus exports increase as does inflation. In theory the invisible hand of the market should, over time, mean that the right value is given to each currency. In practice, the currencies are used by the governments to distort economic relations between States. It’s what is called “The currency war”. The International Monetary Fund (IMF), since the beginning of this year, has been trying to define some rules to establish the value of the currencies, but it has been ignored by everyone.
The emerging countries of South America and in the East are at the centre of this war, on whose outcome their economic survival depends as does ours. Brazil has reacted to a collapse in exports, due to the increase in value of its currency, the ‘real’ by devaluing it. In 2010 Brazil’s balance of trade with the United States went from plus 15 billion to minus 6 billion dollars. In order to continue to produce and export it has accepted an increase in inflation with all the consequences that this brings, and in particular the impoverishment of the most vulnerable social classes. For at least a year, China has been keeping the value of the ‘yuan’ artificially low in spite of the protest of the whole of the Western world and Japan who are accusing it of unfair competition. If the value of the yuan were to go up significantly (as it should) the Chinese GDP would go down with catastrophic effects on employment. The Currency War is like a massive game of “Risk” in which each move causes a reaction in every other part of the world map. In South America, Chile, Columbia, Peru and Mexico are in reality devaluing their currencies. It’s a massive race to go lower with global impoverishment. A war in which Italy is playing the part of the clay pot among the iron pots. It is tied in to the euro, whose value is much higher than that expressed by its economy that has basically been in recession for 10 years. It has a public debt that is going towards 2,000 billion euro by the end of 2011. It cannot be devalued to improve exports; it cannot invest because of the cost of the interest payments on the debt (this year we will pay about 80 billion in interest, equal to about four substantial finance bills.).
Italy’s exit from the euro, if it were to happen, with a new ‘lira’ and the subsequent devaluation, would change nothing. We would find ourselves with double digit inflation and no exports. The top countries in terms of exports apart from China are in fact the United States, Germany, the Netherlands, and Japan. They are exporting innovation and technology, what would we export? No longer public debt and we have already exported the "made in Italy" companies. Perhaps we will abandon the lira for the ‘scec’, a local currency, for the town, for the neighbourhood, for the condominium.


È stato morto un ragazzo (DVD) {A young man in a state of death}
The film about Federico Aldrovandi who encountered the police one night.
Buy your copy

Posted by Beppe Grillo at 10:53 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 21, 2011

The new emigrants


It was the year 2006. The exaltation of the “necessaryimmigration, “so that the country can grow”, “wanted by the industrialists” was a bipartisan lie, shared by the Right and the Left. By the Right so that it can control the pricing in the labour market, by the Left for electoral reasons. Paolo Ferrero, the Minister for Social Solidarity, said: “In the continent of Africa it’s likely that there are thirty million young people aged between 18 and 25 who are ready to leave their homes and their loved ones” and he added “it is they who come and do the work that often the Italians no longer want to do … Today we have to understand that we have become a country of immigration.” Ferrero hadn’t understood a thing. Prodi went home and ‘Rifondazione Comunista’ was eliminated from Parliament. The immigrants “come to do the work that the Italians no longer want to do” have above all been made use of in the building industry. Italy has been ‘cementified’ with new public buildings, overpasses, with additional lanes on the motorways, with warehouses, residential areas without residents. Those who have been constructing, especially in the North, have raked in sums of money that have never been seen before. The new arrivals have been treated like modern slaves, underpaid, often sacrificed to the God called Money with human offerings called “White Deaths” {deaths in the workplace}, without social security, they are ‘invisible’ citizens. Five years have gone by. Work is a chimera. Real rates of unemployment are at 14% if you consider the ones who are ‘discouraged’, the ones who are no longer looking for work. Out of every four unemployed people, one is a foreigner.
Since 2008 the number of foreigners without a job has gone up by 95,000 people and 80% of them are in the North. Once more we have become a nation of emigrants. If in the EU the first ones to leave their countries are those from Romania (1.9 million of whom almost a million are in Italy), in second place there’s Italy with 1.2 million people, almost all of whom are young, and often with degrees and diplomas. The overall number of foreigners without a job is 235,000. Unemployment among foreigners will double in a short time. That’s an easy wager. The reason is simple. The building industry, the only sector that has been growing in Italy in the last decade, is in its death throes. By the end of the year 2011, it will have 290,000 fewer workers than in 2008. The other sectors of industry have been in a structural crisis for some time. They can’t create jobs. The growth of GDP in Italy from the year 2000 to the present day is the worst in the world apart from Haiti. Once the wild cementification boom finishes, there’s almost nothing left for the foreign manual workforce. What will happen to them? Italian unemployed people have reference points, family, friends, but the foreigners? Meanwhile the ‘decreto flussi’ {Quota Agreement} is looking at a further 150,000 people coming from abroad. In order to allow them to come in, it’s necessary for 150,000 Italians, possibly young and with degrees, to go out in order to leave space for them.

Berluscoma 2010

Berluscoma 2010 (DVD)
The sunset of the Second Republic as told by Marco Travaglio
your copy today.

Posted by Beppe Grillo at 09:32 AM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 12, 2011

Marchionne’s blackmail


Marchionne is just one of the Agnelli family’s employees. He is paid to make them gain and to act as a lightning conductor. Nothing more. His crudeness of language (and of action) that falls down in the pure provocation for those who have been laid off, or sacked and for those workers that accept every condition so as not to lose their job, is unacceptable. Their bosses are putting a muzzle on them. If Fiat has every right to move production abroad, the Italians have a still a greater right to present them with the bill. For decades it has been the Italian taxpayers to pay the profits of the Agnelli family and the big shareholders, ranging from the fund for the laid off workers when Fiat had its accounts in the red, to the financing of the “cash for clunkers” to the incentives for the factories in the South. The voice of the Agnelli family has not yet been heard during these negotiations, let them pack up and leave, but before that, let them pay the tens of billions that they owe to the Italian State.

“We are a group of Italians under the age of 40 living and working abroad but still having direct contacts with Italy to which we are connected by fondness and nostalgia accompanied by the anger of seeing it in constant decline.
Not one of us has up until now been directly involved in politics, even though we feel a connection with the Left in its widest sense, but what is happening cannot leave us indifferent. This is why we have decided to demonstrate our worries about a few important topics:
- Marchionne’s blackmail and the imposition of a contract rather than through negotiation
- the referendum that is similar to the plebiscites of the “Ventennio” {the twenty years of Fascist rule} in which the only choice is between unemployment and conditions imposed by the owner
- the departure from recognised constitutional rights by means of agreeing private contracts
- the renunciation of the national collective contract amidst silence from the Confindustria and most of the trades unions (that from the beginning should have refused to sign a contract that was different from the national one for the Mirafiori factory workers)
- the exclusion of the biggest metal-mechanics trades union from the union representation.
We consider all this to be very serious.
We find it even less acceptable in a period of economic crisis and we reject the attempt to make the workers pay the costs of the failure of neo-liberalism. We are astounded by the embarrassing silence of most of the Opposition, and especially the Opposition in parliament, and we think that the time has come to decidedly take sides. The FIOM Is not just defending the Mirafiori workers. It is defending the Constitution, democracy, and the freedom of choice. It is basically defending the possibility of a future for our country, that seems to us to be getting ever more distant.


Laura Andrazi, Paris, France - Alessio Baldini, University of Leeds, UK - Giorgia Maria Battistello, Six Telekurs, London, UK - Tommaso Cavazza, Barcelona, Spagna - Francesca Congiu, University of Leeds, UK - Ilaria Giglioli, University of California at Berkeley, USA - Matteo Giglioli, Palo Alto, California, USA - Simone Giovetti, United Cities of France (Cooperazione Francese), Francia - Silvia Gurrieri, Paris, France - Giandomenico Iannetti, University College London, UK - Salvatore Marchese, Brno, Czech Republic - Nicola Melloni, London Metropolitan University, UK - Vasco Molini, Maputo, Mozambique - Valentina Rigamonti, USAID, Afghanistan -Pietro Roversi, Oxford University, UK - Davide Sormani, Brno, Czech Republic - Gigliola Sulis, University of Leeds, UK - Elia Valentini, University College London, UK - Alessandro Volpi, London, UK

To make contact and join up:!/home.php?sk=group_169410559768904!/perlafiom

P.S.The following meetings have been arranged for the creation of 5 Star Civic Lists in the following towns:
CaninoCapoterra, CarmagnolaCassinoCirièCorigliano ScaloCrotone, Fuscaldo, Isola Della Scala, NogaraRoseto degli AbruzziSienaSennori, Viadana

Suggest a meeting in your town.

Berluscoma 2010

Berluscoma 2010 (DVD)
The sunset of the Second Republic as told by Marco Travaglio
your copy today.

Posted by Beppe Grillo at 10:10 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 17, 2010

The collapse of Banco Emiliano Romagnolo

The collapse of Banco Emiliano Romagnolo
Crack Banco Emiliano Romagnolo
Today I received an email about the collapse of the Banco Emiliano Romagnolo (BER) and the freezing of current accounts and securities accounts (that are not owned by the bank) in accordance with an order coming from the Bank of Italy. The blog has checked up by making a telephone call (the voice has been modified to avoid problems for the person who gave us this information) and found that this is all true. Just try and imagine yourself waking up tomorrow without the possibility of getting access to your current account, to the bank machine, to the securities you hold, to the automatic payments made through the account. How would you feel? Below I’m giving the notification I received and the interview with the BER.


”I want to tell you that the Banco Emiliano Romagnolo has been blocked by the Bank of Italy and that all its current accounts have been frozen so as to stop everyone from withdrawing money. They are trying to sell the bank to the Intesa Group. Nothing more is known. And they say that up until 7 January nothing more will be known. They will have a peaceful Christmas holiday! And it’s not because of the cold weather! Like so many other people, I find that I cannot receive payments into my account, or my salaries, nor can payments be made and I cannot take money out. All this has happened without warning and keeping everything hidden. Even now you cannot read anything about it in the newspapers. You ring up the bank directly to see that it’s all true:
0514135595 - 0514135539
Greetings" A.C.

Transcript of the telephone call made by the blog to the BER:

BER:It was during a measure taken by the Bank of Italy on 7 December when they established the freeze on the money coming in and going out of the current accounts, this protection of the current accounts, looking after the transition procedures that are applied right now means that the account is frozen. It’s not possible to make or receive payments, process direct debits or use the cash machine. The account is completely blocked. Unfortunately even we employees are in the same situation. We cannot do any shopping. If someone has another possibility, the situation has been crystallized in the state in which it is found. You see, we ourselves who could have protected ourselves, to make a withdrawal, we ourselves were told from one minute to the next, above all in the relationship with the clients. At 6 o’clock in the evening, this decision became affective when it was published in the Bank of Italy’s Official Bulletin and in the national newspapers. On the morning of the 7th when the branches opened, they told us this. It’s a drastic measure and it clearly causes and will cause all sorts of enormous problems that I suppose the Bank of Italy can do and it will get loads of denunciations. Be that as it may, obviously, the ones with big difficulties are above all the companies. A terrible disaster.
Blog: Apart from the money held in the current accounts, how about the way the bank acts as a simple intermediary in relation to the escrow accounts for securities. Has even that been blocked? BER: Yes. Everything. Completely everything.
Blog: The securities are in the name of the current account holder, not in the bank’s name. BER: Yes. They are blocked in as much as they cannot be transferred from one account to another, they are there and they stay there until they are unblocked. Then each person can do what they like with them.
Blog: So in this period of “freeze” I cannot deal with my shares? BER: No, but nor can you use your current account.
Blog: Not even through another organisation? BER: Absolutely not. You see not even the dividends coming in, are being dealt with.
Blog: On my account it’s easier to understand because it’s an asset of the bank. BER: I understand your point, however even securities are part of a sort of total liquidity. I believe that most people are worried about liquidity to go shopping, to pay the mortgage, the utility bills, the rent.
Blog: Yes, in the worst case, if the current account is blocked, I sell some shares and I get by in another way.
BER: Yes, I understand , certainly, in fact this is a problem for the Stock Exchange, for everything, because there’s a sort of contract of sale, at least of negotiation, and anyway there’s investment as long as it holds up.

Posted by Beppe Grillo at 11:06 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 14, 2010

Berlusconi has won. Berlusconi has lost. (314-311)


1,867,398 million euro is the new record for the public debt. In October we devoured 23 billion, in September the debt was 1,844 billion. On the same day as the record that drags us towards the economic abyss, 14 December 2010, at the Chamber of Deputies, Berlusconi won by 314 votes to 311.
An obscene clash took place in the hall of the red velvet , a clash between the companions who can smell the odour of revolution in the streets and are trying to save themselves with a double back flip, like Fini, disowning 15 years of mess-ups like Bersani and Casini. In the Chamber that was reduced to a stage of money-grubbers with pre-show quips and sudden applause that squashed the fear of the future (like those at the coffin carried on shoulders as it is leaving the church) you would have needed the madness of a guy like Lombroso to interpret the faces, the smirks, sneers, and exploits. To illustrate a new anthropology: the shit one. In a Parliament of people who have been sold, you cannot talk about votes that have been bought, just as it isn’t possible to find virgins in a brothel. The show put on by the deputies had one more performance. Actors with starry salaries, dark blue official cars, election expenses (theft) amounting to a billion euro thrown out by a referendum, journalists at their service paid with a pittance of 329 million while the country is plummeting. Look at them. Don’t they disgust you?
In all that, the Chamber this morning seemed like a meeting place for old mates. Berlusconi cuddling Casini’s neck, the guy Bocchino betrayed, the guy Fini paralysed by a vote that pensions him off after 40 years of a political career in which he has seen nothing, heard nothing, and said nothing before coming out of the sarcophagus, Fassino’s “vajassa” {servant}. Ms Mussolini’s lips and Ms Carfagna’s lips, Frattini’s sunglasses. The pregnant women, including the lawyer of Andreotti-the mafia-guy in-a-wheelchair. The “corte dei miracoli” had more dignity, a circus has more seriousness, a whorehouse more dignity.
In 2011 the economic crisis will sweep away this laughing humanity that has taken possession of the State and the media. Social ragamuffins that have found in politics the only route to success, to feel important, indispensable, “honourable”. I will not save anyone and I just hope that they will all withdraw in time, before the action is taken by History, that is, as is known, unpredictable and ferocious.

Berluscoma 2010

Berluscoma 2010 (DVD)
The sunset of the Second Republic as told by Marco Travaglio
your copy today.

Posted by Beppe Grillo at 05:33 PM in Economics | Comments (5) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 24, 2010

The sunset of the West


The crisis of the Irish banks is no novelty, no more than the one in Greece was and just as the crises to come in Portugal, Italy and Spain won’t be. It’s a matter of months. Each time there’ll be shock like there is when there’s a sudden summer thunderstorm. Yesterday Merkel announced that the crisis is extremely serious and that the Euro is at risk. And we who didn’t know that … Politicians give bad news only if they are obliged to. They wait until the last possible moment, to save us from useless suffering. To have a discussion about Ireland, or at the beginning of 2010, of the default by Greece, is equivalent to concentrating on the hole in a holy bucket. The colander is the whole of the West that is collapsing under the weight of its public debt that has increased by an average of 50% in twenty years. The emerging countries, the so-called BRIC countries: Brazil, Russia, India and China, have a limited public debt and they are buying up the debt from the West. If China were to sell all the American State bonds that it owns, with a value of 883.5 billion dollars, the United States could collapse.
The world is shifting to the South and to the East. The GDP of the BRIC countries is about to be greater than that of the G6 (Germany, Italy, France, United States, Great Britain e Japan). The BRIC countries have a very low public debt to GDP ratio: Russia 6%, China 18%, Brazil 45%, India 59%. Just think, Italy’s is 118% with 80 billion euro in annual interest to be paid, a figure that would kill an elephant. The United States are about to reach the Everest of 14,000 billion dollars of public debt compared to 6,000 billion in 2002. In the past, wars were fought with weapons, today they are fought with public debt. Whoever buys your public debt becomes your master.
The United States, the most indebted country, Is responsible for 50% of the world’s military spending. An enormous amount. Russia, the historical antagonist, is spending 3.5%. The United States is transforming the debt into weapons. So basically anyone buying United States stocks is financing the war in Afghanistan and the military bases of Dal Molin of Vicenza and of Okinawa where they have been settled in for 65 years. The Roman Empire collapsed under the attack of the barbarians at its borders. Its legions withdrew from the Rhine and from Britain. Perhaps the United States will follow the same idea because of the economic impossibility of keeping 716 military bases in 40 countries. Ireland is a symptom of the sunset of the West overcome by its public debt. Winter is arriving for the European and American cicadas and outside its getting colder still.

Calendar of Lay Saints 2011

The Calendar of Lay Saints 2011
Hundreds of homicides and dozens of slaughters in the post-war period have still nobody identified as the perpetrator. How many people know who did it and yet remain silent?
And it’s this that nourishes the Power, the indifference of the Italians.

Buy your copy now at the price you choose.

Posted by Beppe Grillo at 07:07 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 14, 2010

The helicopters


Ms Merkel has told the G20 that the Germans will not pay for the public debts of the other European countries. Who is she talking about? Greece, that in the last few days has seen the interest rates shooting up, the rates it has to pay to sell its State bonds, then Ireland, ever closer to collapse and that will perhaps not be eating Christmas cake at Christmas time, (even if the EU is preparing to make available a sum of 80 billion euro to help). Finally the Chancellor is thinking of Portugal and of Italy.
By now Italy has gone beyond the simple PIGS. It is a super-PIG. The Financial Times includes it among the three weakest economies in Europe together with Greece and Portugal (and thus worse than Ireland!). The growth capacity in our country is zero. It is in position 179 and next to the last in the world just above Haiti in the decade that has just gone by. It’s impossible to do worse. A petrified Nation. Italy has got been standing still since 1999 for innovation and for development while its public debt has exploded and has arrived at 1,844,817,000 in September. Tax revenue has gone down with the same rapidity as the increase in the figures for unemployed and laid off workers. The value of tax revenues in September was 21,814,000 euro and in August it was 33,889,000 (that’s a decrease of 12,075,000, or 35.6%)! Unemployment is 11% (more likely 14-15%) while the average for the OECD is 8.5%. The fund for laid off workers has been paid out for a billion hours, or more precisely 1,026,479,655 hours. That’s an increase of 44.2% in relation to 2009. It’s seems like the disaster of Caporetto (and it is)!
The economy of the country is collapsing and the newspapers and the politicians are talking about Fini and Bersani being invited as guests on Fazio’s show and bunga bunga. The destiny of Italy is no longer in its own hands, but in those of our foreign creditors who are holding 1,400 billion of our public debt in State bonds. And the ones at the top are France and Germany. Merkel and Sarkozy and the International Monetary Fund have probably decided for us. To have Draghi as President of the Council because of the trust placed in him by international finance and an unprecedented “shock treatment” for our economy. They have no choice to try to save their investments and perhaps even the EU itself. The helicopters are warming up.

Calendar of Lay Saints 2011

The Calendar of Lay Saints 2011
Hundreds of homicides and dozens of slaughters in the post-war period have still nobody identified as the perpetrator. How many people know who did it and yet remain silent?
And it’s this that nourishes the Power, the indifference of the Italians.

Buy your copy now at the price you choose.

Posted by Beppe Grillo at 09:36 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

November 03, 2010

The lost decade


Where have you been? Fini and Bersani, De Benedetti and Tronchetti, D'Alema and Prodi, Berlusconi and Geronzi, Tremorti and Visco, Bossi and Casini, Marcegaglia and Benetton while day after day, Italy has been plundered of its wealth and of its future? And by how much has your personal fortune grown in the last ten years? You who are the ones explaining the economy to us in the newspapers and on TV? While you and your peers have been living it up for ten years at the expense of the country, Italy has been going down. Growth has been subject to a heart attack. From 2000, according to research given in the daily paper El Pais, out of 180 nations only Haiti has done worse than Italy. The whole world has developed more than we have apart from Haiti, one of the poorest countries devastated by an apocalyptic earthquake.
From 2000 to 2010 there have been alternate governments on the left and on the right, and at the head of the Confindustria and the banking system all the ones who are responsible for our decline that by now is irreversible for at least a generation. We are the worse ones on the planet, not just worse than Burkina Faso in position 44, or than Montenegro at position 115. All without distinction, have done better than us, apart from an island in the Caribbean. The moment has come to declare the collapse of a governing class, the worst one in the last 150 years, without exception, taking no prisoners. Collusion even more than corruption has been the dark evil that has infected the body of the country. The best have got by with handsome golden handshakes or with prestigious honorary roles. The worst have devoured the economy in common agreement, from the selling off of Telecom, to the Alitalia disaster, to the funeral rites of Italtel and Olivetti.
A public debt that is ever greater is knocking on our doors with hundreds of billions of euro to be placed at the beginning of 2011 if there is to be no default. It’s not a matter of being alarmists, but realists looking at the face of reality. The debt will be at 1900 billion within a few months. However, the debt cannot grow forever. It’s inevitable that there’s a point of no return. The debt has been growing while the economy has been static for an eternity. The sick ones of Europe, the so-called PIGS, have developed more than us in the last ten years. Ireland is at position 131, Greece at position 132 and Portugal 178, just one position above us is on the edge of the abyss.


Portugal and Ireland are following the same trajectory as Greece, in order to sell their shares they have to pay ever more interest to justify the investment risk. However Italy is optimistic, even with the worst growth in the world and the biggest public debt in Europe, it’s always in denial, it always denies. And it will be like that right up to the end. The Tremorti Mystery. Into the catastrophe with optimism.
El Pais rankings showing growth 2000-2010 – as given in Italiafutura:
positions 1 to 73, pdf
positions 74 to 180, pdf
(reworked from data given by the International Monetary Fund – IMF, pdf)

Posted by Beppe Grillo at 06:16 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 26, 2010

The Banking Foundations


When Chiamparino of the PDminusL or Tosi of the Lega were dealing with Intesa San Paolo and Unicredit, they did that as shareholders wanting to get the dividends. This is because the parties indirectly control percentages of the banks by means of the banking foundations of the various cities, from Turin to Verona. The throwing out of Profumo was down to the drying up of dividends coming to the Foundations. The increase in the Libyan participation in Unicredit was a pretext, in fact who still remembers it? How much money arrives at the 88 banking foundations each year? A flood of money. The Italian banks distribute half their net profits in dividends to shareholders. The Foundations use this money for non-profit projects in the territory. The profits of the banks are spent by the Foundations for activities of their choice (whose possible range of choices is very wide) to obtain an electoral advantage. The parties can also decide the banking appointments. An example is Chiamparino who chose the president of the Board of Directors of Intesa San Paolo in that, as an auditor, he was delegated by the ‘Fondazione San Paolo’ that owns 10% of Intesa San Paolo.
Fassino who rejoices in having a bank or Boss(ol)i who wants the banks of the North after the victory in Piedmont and the region of Veneto are symptoms of a ‘bedlam of roles’, words from the schizophrenics of politics transformed into bankers. Whose task should not be gathering in dividends or appointing people to banks, but administering the public good. Money buys agreement, votes, and this is one of the hidden tasks of the Foundations. The capitalisation of the Italian banks is among the lowest in Europe, basically the coffers are in tears. The mechanism of the banks being ‘cows to be milked’ that are not reinvesting an important part of their profits because they are destined for the parties is about to end. The first reason is the crisis, the second is the result of new rules from Basel III that imposes the increase in equity capital in relation to possible risks, by 2013. The safety blanket is shrinking. Which will collapse first, the parties at a local level or the banks?
PS What I would like is for the spending by the Foundations and the motivation for each choice to be made public, right down to the grassroots in a way that is understandable to the citizens.

Posted by Beppe Grillo at 08:22 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 19, 2010

Banks worse than tax collectors. Interview with Beppe Scienza.

Interview with Beppe Scienza
What’s the use of Italian banks? This question that is simple, so simple, has many replies, and none of them is reassuring for the saver. If the parties are the waiters of the bankers, the bankers, on behalf of whom do they operate? For whom are they serving at table? Who is pulling the strings of the great bankers of the world of finance, from Passera to Geronzi? What is the real power of these folks? Judging from the end that has befallen Arpe and Profumo, who were sacked between the morning and the evening, not a lot. Some of them last longer than the others because they are more functional to the system. The banks are responding to higher interests. Interests that are unknown to most people. They invest savers’ money in black holes, as happened with Telecom, with Alitalia, and with Air One. Grants thrown down the toilet but provided by using the money of current-account-holders, of those who deposit their savings. The banks always know today what their clients will know tomorrow. This is the trick that allows them to sell the derivatives with a hole inside or to give advice about the purchase of Parmalat bonds right up to an hour before they go bankrupt. The banks can give advice; can sell shares in companies with non-existent value, as happened with Saras, whose shares were immediately devalued by the market, without ever risking anything.
The Italian banks are a de facto monopoly. Their services have a cost that is higher (often much higher) than European banks. They are at the service of politics and the lobbies. They provide financing for cement and nuclear power stations, TAV, and the Messina Bridge, but to get a loan for a small-scale entrepreneur for his company or a mortgage for a family is worse than climbing Everest. The banks decide whether a company lives or dies, whether a territory is destroyed or regenerated.

Interview with Beppe Scienza of the Mathematics Department in the University of Turin

Banks, the real enemy
”I am Beppe Scienza, and I specialise in mathematics and money, in financial mathematics and today we are talking about taxes, about taxes because the topic is always interesting for Italians. Italians hate the taxman. I’m not going to discuss whether this hatred is justified, whether it is exaggerated, about which there is speculation; however, there’s one thing that needs clarification. For savers the true enemy is certainly not the taxman, but in general it is the banks, the financial system, the investment funds that are taking away money from the savers, much more money than the taxman takes. The discussion relating to savers concerns the managed savings, and in particular investment funds that are relevant to about 10 million Italian savers and I want to say a few words to start off with. This time I don’t want to quote my own data, but figures from another source: ‘Mediobanca - Research Department’ and here there’s something to be said: because some people think of Mediobanca and they say: well just think, there’s Cesare Geronzi, the Ligresti family, what sort of people are these? I’m not going to discuss that. I understand very well that one may turn their nose up at these people. However, apart from Mediobanca itself, there is ‘Mediobanca - Research Department’ and this is led by a person who is unknown to most people but to whom the Italian savers should create a monument. He’s Fulvio Coltorti, a reserved person, an academic, a researcher, a really capable economist who doesn’t enjoy publicity, a person who is adamantly honest. For almost 20 years, each year with his research office he puts the Italian investment funds under a microscope and what is coming out are accusations that they would not be able to save themselves from if it weren’t for the Italian press which is an accomplice in helping the band, the wrecker of managed savings. Thus I am taking as my reference point the figures from the Mediobanca annual report.


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September 30, 2010

Ireland and the Wicked Wolf

Fabri Fibra at Woodstock 5 Stars
The fable of the Wicked Wolf and the five little pigs: Greece, Ireland, Italy, Portugal and Spain continues. If Greece was the first little pig to be eaten up by the public debt and by the upset of the banks crammed full of derivatives, Ireland is the second chapter in the story. The biggest Irish bank, Anglo Irish Bank, is on the brink of collapse. It needs money, to be recapitalised. If it goes bust it will take Ireland with it and this is why the government is obliged to intervene (for the second time) by bringing 35 billion euro of aid to the banking sector with an increase in the public debt and in taxes. The Anglo Irish Bank is at risk above all in the real estate market that is plummeting all over the world. Sooner or later, all the banks, including the Italian ones, will have to devalue their real estate heritage and present it using real market values. It is a sure contamination that will put at risk the banks that have invested in cement. The real estate sector in Italy is over-valued, doped by information. Houses are worth up to a half of what is declared. The big cities are carpeted with signs saying “Vendesi" {for sale} and "Affitasi" {for rent}, but no one is selling and no one is renting. And when it happens, the price is decided by the buyer, or the tenant, not the owner. The question that the Bank of Italy should be asking itself is: "By how much should the banks be devaluing the real estate and how many of them are risking collapse?" However, the skies of the cities and of their suburbs are always crowded with cranes-without-wings, who is financing loss-making projects? Which banks, which insurance companies are putting at risk the savings of their savers? While in Parliament they are talking about “nothing” and they are qualifying for a pension after two and a half years, the Wicked Wolf is getting close to the door of the pig called Italy.
fonte: Financial Times

The ratio of the Public Debt to the GDP sees Italy in second position with 118%, with very little distance from Greece at 125%, but above Portugal and the other happy little pigs. If money attracts money, debt attracts debt. The EU will impose a penalty of 0.2% of the GDP on PIGS states and by doing that, it will increase our debt. A brilliant idea that will allow “Tremorti” to issue other State bonds to pay the additional debt. Italy is hanging by a thread, and it depends on the ability of “Tremorti” to sell new debt and to pay the ever higher interest, about 80 billion euro in 2011. The more you sell bonds, the more the interest you pay. The greater the increase in the gap between our production and that of the other European countries, the more the interest that you pay to compete with their State bonds. It’s a never-ending spiral. When the Wicked Wolf knocks down the door it will perhaps be a relief.

Posted by Beppe Grillo at 06:13 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

September 21, 2010

Profumo’s scalp


Profumo’s exit is not just a matter of money. The CEO of a bank stays in the saddle for 2 reasons, either he is functional in the system like Passera of IntesaSanPaolo (remember Alitalia?), and in some cases it’s he himself who is the System as in the case of Geronzi, or he produces profits, distributes dividends, and makes the shareholders rich. Profumo belongs to this latter category of bankers.
For some time now Unicredit has not been a source of income for its shareholders. Last year the dividends were distributed in the form of shares. The shares however have constantly lost value. A share in 2009 was worth 2.64 euro down from the pre-crisis value of 6.50 and yesterday a share was at just 1.94 euro. Today it’ll be worse, there‘ll be a stream of selling. The 2009 profit was down to 1.7 billion, a result that is more than acceptable in the current situation, but well below the more than 6 billion in 2007. In the last two years, the shareholders have financed the bank with capital increases of the order of billions of euro, but they have received nothing in return. Their money has evidently not been sufficient if it has been necessary to take on board “cavaliere bruno Gaddafi”. Unless there are surprises it is he who is now the key shareholder of the top Italian credit institution with 7.5%.
Profumo has always paid for his partial independence by giving the shareholders their “pound of flesh”, but Unicredit is not his bank, he’s not the owner, he’s an employee, the top one and the most important but in fact he’s an employee. Behind his ousting after 15 years, unless there are last-minute rethinks by the System, there are all those who have been kept out by Profumo, starting with Boss(ol)i’s Lega, the one connected with the collapse of Credieuronord, that wants the banks, as well as the Foundations commanded by the parties and by their minions, and also Geronzi, the 70-plus president of Generali, who as well as Arpe’s scalp now adds that of Profumo, then there’s the lobbies connected to the Bank of Rome and the Bank of Sicily merged into Unicredit. The list of Profumo’s enemies is as long as the Boot of Italy, until now, his shield has been made up of the results and the protection of Allianz, the German shareholder that supported his candidacy 15 years ago.
Profumo is a banker, not a saint, but he was one of the few held in high regard in Europe, and like Matteo Arpe he was ousted by the System when the time came. Behind them there’s nothing, the parties. From today the banks are even more “Cosa Loro” {their thing – like Cosa Nostra}.

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July 26, 2010

About super-capitalism and other sillinesses

Il Pianeta Verde - La belle verte
Super-capitalism is a tyrannosaur in uncontrolled liberty. Its cage was thrown open definitively with the collapse of the Berlin Wall on 9 November 1989. From that time it has no limits. It has become bulimic. It devours what remains of the social democracies without let up. It’s growing. It’s growing year by year. The World Trade Organization (WTO) was born in 1995, seven years later. 97% of the nations of the world belong to it. It has the aim of abolishing every tariff barrier to international trade for everything: commercial goods, services, intellectual property. Production has been delocalised anywhere in the world where the cost of labour is lower because there’s a lack of checks on safety, trades union rights, protection of the environment. And often the same minimum rights with the recruitment of armies of child slaves under the banner of profit.
The multinationals have cashed in the gains of super-capitalism. They have protected their T.rex through the media that have praised it and that are praising its virtues and have demonised the “ anti-globalisation” campaigners. The market and democracy have fused together, as though man himself is becoming an out-of-date product. The conquests of generations of people to get a social State (what else can a State be if it’s not “social”?) have been cancelled out. And the ones that still remain are being constantly transformed into dis-services for the glory of T.rex as has happened with public water: “The aqueducts are not functioning? We’ll give them to the private sector!” Less State, more Market.
Is it possible to control a starving T.rex? Its stomach is the planet. Derivatives, futures, swaps have been able to infect world banks for almost twenty years to the indifference of the supervisory bodies of the States and of the international organisations. A new 1929 that has started but has not yet finished. The States have become markets, fabricators of optical illusions, specialists in debt. Dozens of States have already gone bust, others will follow. For the moment, to keep T.rex calm, there’s the creation of new debt to add on to the debt. A contradiction in terms.
Italy in its small way does not draw back from the banquet. The images of Gianni Agnelli and Luciano Lama seem like photomontages. Marchionne and Rinaldini are two parallel lines. They can never meet. Marchionne is blackmailing the government, and he can do that, legitimately, with T.rex at his side to protect him. Serbia and the delocalisation at 400 euro a month for each worker are waiting for him. Super-capitalism is an excess. It will die by itself and it will be replaced by another excess that is equal and opposite. Obviously, unless we die first.

Posted by Beppe Grillo at 08:35 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 19, 2010

The anti-phrases

Play it again, Sam! The sofa.

Wiretapping record April 2010. Imprecise location in Brianza.

B/P3:Italy has gone bust
T/Rex: It’s enough to just not say so
T/Rex: and to say the opposite is even more effective!
B/P3: But Italy has gone bust all the same. Every month the public debt is growing by 10 to 15 billion. You know perfectly well that in a bit it won’t even be able to pay the interest on the debt … Telling a pack of lies is no use any more …1900 billion of debts forecast for spring 2011 …
T/Rex: We will make use of the policy of the Anti-phrases (*)1...
B/P3: Anti-phrases ?
T/Rex: Yes, it’s a bit like the Anti-mafia that makes an agreement with Provenzano
B/P3: (Laughter…)
T/Rex: It’s simple. We’ll do the opposite of what they did in Greece.
B/P3: Explain.
T/Rex: George Papandreou announced the default. You’ll say that we have started the recovery, that we are better than the average of the European States. (*)2
B/P3: Yes sure – I can say that. You know that’s not a problem for me … but the ship is sinking all the same … Real unemployment is the highest in Europe. Salaries are the lowest and the money in the fund to pay laid-off workers is about to dry up.
T/Rex: Greece first declared there was a crisis and then it put into action the anti-crisis measures. They presented a shit image… We, however, will present a great image. We will put into action the anti-crisis measures without announcing the pre-default. But we will say they are for the recovery
B/P3: The Italians are stupid but not to that extent…
T/Rex: You have always over-estimated them. Otherwise folk like Ingroia and Travaglio would already be in prison to the jubilation of the populace. Anyway, you can always try later with them…
B/P3: Have we got an alternative?
T/Rex: Yes – the “coup d’état”, but I just think of it as a back-up measure. Papandreou put a block on the salaries of public employees, he increased pensionable age, he put the Greek islands up for sale (*)3. We’ll do the same. We’ll call it a package for development and we’ll say that it’s Europe that obliges us to do it. Italy will be sold off to the private sector by means of “ Federalism of public property”, for the pension that’ll come only after 40 years of contributions and there’ll be a block on public sector increases for three years. The important thing is to keep the Confindustria and the banks onside. We won’t touch the gains of the public concessions and we won’t tax the banking sector.
B/P3: What would you say to some “spaghetti alla puttanesca” and some European seabass?
T/Rex: Great idea. And while we are eating I want to talk to you about Public Parks in concession to the private sector and a tax on grinding, you know … Luigi Menabrea’s old law of the 1800s
B/P3: Ah – but the default, will we manage to escape it?
T/Rex: No, but no one will notice

(*)1 Anti-phrases: it is saying the opposite of what you are thinking. It’s divided into irony (lighter) and sarcasm (heavy).
(*)2 A fact that actually happened with the declaration of the Italian GDP growing by more than the European States (+0.4%)
(*)3 March 2010, the Greek government put in place a series of measures aimed at restoring public accounts to health. Measures included blocking the salaries of public employees and a reform of the pension system, for a total of 4.8 billion euro.

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July 03, 2010

The Pensioners and the Lost


Mussolini’s Italy had eight million bayonets, while the Italy of the new millennium has 17 million pensioners. Before you can go on pension you will have to wait for them to depart en-masse. Those who are currently working (or looking for jobs) keep on seeing the bar being raised, requiring 35/40 years of contributions and perhaps even more. In essence, today’s twenty or thirty-year-olds will never ever be able to go on pension. The odds of anyone being able to work continuously for 40 years without any break in service and with full monthly pension fund contributions to the INPS are about as good as the odds of winning the “Superenalotto” lottery.
The Country is split into two classes: the pensioners and the lost. Lost because they are either working at piecemeal jobs, off the record, or are unemployed, underpaid or terminated. Because their pension is merely a social mirage. Pensions are the true "class divide" in Italy. It’s not right to expect young people to increase the pensionable age and increase the number of years of contributions to qualify for their pension while there are entire battalions of pensioners receiving two or three pensions, parliamentarians that qualify for full pensions after only two and a half years of service in the legislature, millions of pensioners who receive a pension for which they only paid half, or even less, of the normal contributions, hundreds of thousands of so-called “baby pensioners” and pensioners with gilt-edged pensions. The minimum pension must be guaranteed at all costs, as well as all those pensions for which the required contributions have actually been paid. In all other cases, what is needed is a tabula rasa. Unless this happens, all those people that are currently paying contributions to the INPS, especially the younger ones, should refuse to contribute even a single Euro more. It’s like throwing money down the drain. No one can guarantee whether and when you will get it back.
Making sacrifices should be expected either of everyone or no one. What is the current situation regarding the pensions paid to former parliamentarians, former Regional and Provincial Premiers, former ministers and municipal leaders and former State Presidents? How many consulting pensioners are there in this Country? How many pensioners is out there that are getting more than 4000 Euro? How many of them continue to vote in favour of maintaining the status quo with regard to pensions together with the two-faced Pdl-Pdwithoutanel?
It appears that the only those who have reached pensionable age can get ahead. The combined age of the Berlusconi-Napolitano duo is almost ONE HUNDRED AND SIXTY YEARS. The weirdest thing is that the "lost ones", the youngsters without any present and even less of a future, not to mention no pension, have not yet got really pissed off. They are destined to work like slaves and then die on the job, just like the oarsmen of the Roman Galleys. Meanwhile, the 4000 Euro a month plus pensioners will be living it up at the Club Med with boxes of Viagra their bedside tables. Come on guys, I say not a penny more to the INPS, it’s far better to hide your money under the mattress. Watch this space for more advice and suggestions in future.

Posted by Beppe Grillo at 06:05 AM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 27, 2010

The OECD and Italy’s recovery

The OECD and Italy’s recovery
If Totò Riina and Bernardo Provenzano were to open up a rating agency on the development of criminality in Italy, what results would they produce? Criminality Outlook: zero. A Triple A for Italy. The maximum points for a civilised country. The same is happening for the OECD, the Organisation for Economic Co-operation and Development, the white knight of every Italian economic crisis.
In its "Economic Outlook", the OECD explains that in Italy “the recession ended halfway through 2009”, news that will put at peace the spirits of the Italians upset by Greece in its near future. The OECD is financed by 31 countries including Italy which is one of the major contributors. It has its headquarters in Paris, 2,500 EMPLOYEES and a mammoth budget of 320 million euro a year (2009 data). The OECD is a hymn of praise to Tremorti’s economic policy: “The government’s policy has helped to limit unemployment, which will however continue to rise slowly in 2011 (thus it is rising even in 2010 – editor)”. The OECD gives a great evaluation of Italian unemployment without however taking into account the “discouraged” (those who are not looking for work because they have lost every hope) and the fudged collection of sample data that considers someone to be employed even if they have worked for just a few days in the last six month period: “The rate of Italian unemployment is anyway lower than the overall rate for the euro zone and the rate for the United States”. It’s a hymn of praise to Italy that manages to “maintain a low primary deficit, inside the levels established(?)” and to the government that “managed to maintain unusually low the growth of the overall spending in 2009”, but the OECD does not reveal that Italy has accumulated about 100 billion euro of public debt in 2009 and about thirty since the beginning of the year (“unusually low growth in spending”, and thus, by how much should it grow to be unusually high?). The Italian salaries are the lowest in Europe and now, after Tremorti has frozen the salaries of state employees for the next three year period, often figures barely above 1,000 euro a month, the salaries are moving towards being the lowest in the Mediterranean. In compensation, Italy has the level of taxation that anyway remains higher than the overall level in the euro zone and higher than that in the United States.
According to the OECD, Italy is going slowly, but it’s going (but where is it going?).Italy that is paying some of its 2,500 employees. The OECD among the useless bodies is the most damaging (where was it before the economic collapse in 2008, before the collapse of Greece (a member country)?)
Let Tremorti withdraw financing from the OECD, he and the psycho-dwarf have no need of help, no one can touch them when it comes to telling tall stories.

Posted by Beppe Grillo at 09:08 AM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 22, 2010

Merkel for President!

Merkel for President!

The economy has disappeared from the front pages of the newspapers and from the television news headlines and has become yesterday’s news. Yet the Milan Stock Exchange continues to lose more of its already scant value. The Telecom Italia share price has dropped below the one Euro level and now stands at 0.972. The share price of Intesa San Paolo, the Country’s largest bank, have shed 33% of their value since the beginning of the year (*). In general, share prices have lost between 20 and 30% of their value. Ms. Merkel has stated repeatedly, on several occasions, that the Euro is at risk. The reason for its collapse is the level of National debt. The Government bonds that underpin the debt of the PIIGS could turn into scrap paper at any moment, as occurred in Greece. National debts converted into government bonds are the equivalent of the toxic derivatives that have caused banks to fail worldwide. After the banks fail, Countries themselves begin to fail. Now, in order to keep the Euro alive, Germany will have to step in and underpin the National debt of Countries like Italy by buying up Tremorti’s debt. But why should they have to do this? In Germany, the citizens pay their taxes while in Italy, tax evasion is estimated to amount to 130 billion Euro per year. In Germany, there is no fraud amounting to hundreds of millions of Euro against the EU, there are no Mafia groups turning over somewhere between 100 and 150 million Euro every year and corruption doesn’t drain 50 billion Euro like it does here in Italy, so why should the Germans help us? Why should the German citizens have to do without social services or have to delay going on pension because of criminal mismanagement of public funds over the past 25 years by the likes of Craxi and Berlusconi? Ms. Merkel insists that public debt and deficit limits be established for member States and that any Country that doesn’t comply with these limits be expelled. Tremorti has met with the individuals that we inexplicably insist on referring to as ministers but who, without Berlusconi, would be nothing more than mere trainee pen-pushers in some or other public body or perhaps station toilet cleaners. Tremorti has threatened to resign unless cost cuts amounting to 24 billion Euro are implemented. He of all people should know that we need to cut at least 100 billion and that no elected government can afford to impose that kind of budget cut on its Country’s citizens, not even spread out over time. In 2010 alone, while our public debt is increasing at the rate of 100 billion per year, Tremorti will have to sell a few hundred billion Euro worth of fixed term government bonds. But who on earth is going to buy them? Unless the EU buys them up, which it won’t, the holiday is over. We could perhaps ask the Mafia to buy them in Exchange for favourable laws. Now there’s an idea. Tremorti should think about doing that. Perhaps that’s his last hope before he hops on a helicopter. The best option nevertheless remains that of selling Italy off to Germany in exchange for a debt write-off. That way Italy would become Germany’s southernmost protectorate, a balcony overlooking the Mediterranean. Merkel for president. Now!

(*) data as at 20/5/2010.

Ps.: A "No smog parade" will be held in Florence on Saturday 22nd, a demonstration against the smog and traffic induced stress, against allergies and tumours and against the non-compliance of the public administrations. The appointment is for 14.30 in Piazza della Repubblica. Come by bicycle or use public transport to get to the demonstration!

Posted by Beppe Grillo at 06:22 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 12, 2010

The metaphysical nature of debt

The metaphysical nature of debt

What can any European Country do to sustain its own inefficiency without going bankrupt? To spend more than it collects? Once upon a time, in extreme cases such a country would simply have devalued its currency. All of the Country’s citizens simply became 20% to 30% poorer. Exports increate due to the more competitive pricing of the Country’s goods. The people tightened their belts and everything went on as normal. The advent of the Euro meant that this type of thing was no longer possible, however, increasing the level of public debt by issuing more Government Bonds has remained a viable option. To all intents and purposes, Government Bonds have replaced the ability to print more money. The product to debt ratio is a good indicator of a nation’s health. The less it produces and the more it gets into debt, the closer the Country comes to bankruptcy. The issuing of debt by means of government bonds has no limit, as long as someone is prepared to buy the bonds and the government is able to meet its interest payment commitments and pay back the monetary value when the bonds expire. If public finances decline, as in the case of the so-called PIIGS, the interest payable on government bonds already issued increases and the number of buyers decreases due to the increased risk of default. If the PIIGS fail, then their creditors, namely the virtuous Countries of northern Europe, could also fail in turn. The European banks in Germany, Holland and France, which are indebted to the tune of hundreds of billions of Euro, would be totally swept away should Italy or Spain ever default. There is something truly diabolical about the issuing of debt and its calculation. The creation of debt is totally beyond the control of the average man in the street. In the past year, for example, Tremorti has managed to increase the Italian population’s level of debt by around one hundred billion Euro, without asking or saying anything to anyone. He then sold this debt on, partly to the very same Italians that he plunged into debt in the first place (the perfect 69, isn’t it?), and the rest he spread around the entire planet. The security of the debt lies in the apparent security of the government bonds. Their yield may well be lower than that of other investments, but they are deemed to be a safe investment. It would appear that the reimbursement of the face value of the government bonds at the time of expiry is guaranteed, which is not true in the case of shares traded on the Stock Exchange, which are subject to market fluctuations. Government bonds, in other words the purchase of third party debt, are somewhat like a totem pole: a State cannot fail. This popular belief enables Countries to sell off their debt, thereby enabling them to make yet more debt. If a Country fails, it usually loses all of its invested capital in one fell swoop due to so-called "debt restructuring ", which is a nice way of saying that the parties that purchased the debt are left standing in their underpants. In order to avert bankruptcy, Europe has agreed to buy up any government bonds issued by the PIIGS that would otherwise have gone unsold. For this purpose, Europe needs the 750 billion Euro that have already been allocated (not enough according to many analysts). This in order to buy up any debt made by reckless governments. The myth of intangible government bonds that will be bought back in any event upon expiry must be eliminated once and for all. A Country should be assessed in the same manner as one would assess any public shareholder company, in other words, if its financial value drops, its share value for the shareholder must drop accordingly. Investments would then focus more on the creation of value rather than its destruction. Making debt is something done by the reckless, selling it off is something metaphysical and purchasing such debt is an act of pure folly.

Ps. The Friends of Beppe Grillo in Roma wish to advise that the hearing scheduled for 12 May, in the trial of Warrant Officer Vincenzo Lo Zito, has been postponed for reasons of legitimate impediment, being the non-availability of the Warrant Officer's defence attorney to attend the hearing. A new date for the hearing will be announced shortly.

Posted by Beppe Grillo at 08:54 AM in Economics | Comments (6) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 10, 2010

Nothing is created, nothing is destroyed. The Vedelago Recycling Centre

Nothing is created, nothing is destroyed. The Vedelago recycling centre

Nothing is ever created and nothing is ever destroyed. Refuse is a re source and while nothing may be created from a diamond, something can be created from differentiated refuse collection, from chairs, to building materials, to indoor flooring and prefabricated goods. The Vedelago Recycling Centre stands as proof that refuse disposal can become free of charge if we practice differentiated refuse collection. While incinerators cause illnesses, recycling creates jobs. The Vedelago recycling centre employs some 9,200 people. What we need is a Recycling Centre like Vedelago in every province. This blog will provide visibility to any new initiatives. We should be incinerating our refuse collection bills, not our refuse.

Interview with Carla Poli of the Vedelago Recycling Centre.

How does the Vedelago Recycling Centre work?
Blog: "Dr. Carla Poli, we have come here to see the Vedelago Recycling Centre. What do you do here at this plant? "
Carla Poli: "We receive the differentiated refuse from various Municipalities and companies, everything except the organic waste, and we proceed to separate out any material for which there is a ready market. Any material for which there is no ready market gets recycled into raw materials and secondary raw materials, for which there is a ready market.
Blog: "Starting with what? "
Carla Poli: "Starting with waste material that is not immediately usable in its current state, while any bottles and containers are sold off to factories that make new bottles or batteries. This is all the assorted plastic material, still with some paper on them, as well as all the other waste material that used to be sent off to the rubbish dump or to the incinerators. This is a sample of flooring material made from our granulate together with recycled wood chips. This flooring is used in prefabricated buildings, as interior flooring and non-slip exterior flooring, In other words, we have the techniques and the research has already been done. We have had to invest our own money because, until now, we have never received any funding for our research and testing in collaboration with the universities …. "
Blog: "So this material comes out of this plant? "
Carla Poli: "We don’t produce it, there is another company that makes it, but we have now established a new production chain, namely the manufacturing of consumer goods! In addition to this flooring, this material is also used instead of wood to produce chair seats and backrests, like this little armchair. All these chairs still need is to be upholstered. These are boardwalk sections for the beachfront, they are used extensively and they’re made 100% from our material. "
Blog: "Even bollards? "
Carla Poli: "Yes, they contain a certain percentage. We have to continuously research and test. We have to ask ourselves: how do we manufacture this item? How much of this granulate can we use? What can we combine it with? For example, here we have some rubber left over from our recycling of copper cable, the possibilities are endless so we have to research, look for applications and experiment. Pallets, for example, those are used in construction. They have to be submerged in cement in order to improve the aeration and seismic resistance of buildings. The company that used to make them here in Italy, in Ancona in fact, eventually closed down because it was uncompetitive in the marketplace due to its costs, but now, thanks to this new research and application, the company has been re-opened. 80% of this igloo consists of our granulate, or up to 80%, so even partial utilisation of our granulate contributes towards reducing costs. The important thing is our system, not the fact that we have a plant that can be replicated, nor the fact that it can be made to work anywhere, we can .... No, our system relies on organising the territory, in other words, we need the support of the public entities because these public entities are required by law to treat urban waste, while the industrial aspect is a totally different matter. The companies are doing a great job of differential refuse collection because it is saving them money, that’s all there is to it, understand? Amongst themselves, the San Pellegrino Group, the Vera Group, Gatorade and the entire Benetton Group all have canteens and they all practice differentiated waste disposal for the simple reason that it enables them to cut down on their running costs. A method like this can be exported into the Campania region, where the situation is desperate. In Campania, they have to start up the plants, which they already have but which are not working!"
Blog: "That’s because they have been converted and they no longer generate power from waste. "
Carla Poli: "Does this mean that it has to be taken to the waste disposal dump or to the incinerator? Well, either it goes there or it goes off for recycling, the material has to go somewhere! "
Blog: "There is a mountain of eco-bales that no one knows for sure what they contain … "
Carla Poli: "Eco-bales are a totally different problem. You have to know what… we don’t handle unsorted material that arrives in bulk. If you want to go this route, and I’ve said it three times already, then you have to arrange for appropriate refuse collection upstream, because no one wants to work in chaos. Instead, if the dry fraction of the refuse arrives, without any organic matter and we find that it has 4 or 5% humidity, then we will correct the error, the percentage error, not the mix error that is … if you’re not prepared to do this, then the stuff must be taken to the dump. It is obvious that there are certain very specific rules … If a Company mixes its production waste, which may be plastic fragments, with the waste from its canteens, you must understand that we won’t even touch it because we need material, not raw refuse! Those that do differentiated refuse collection must understand that there is a big difference. So the recycling starts here, we transform the stuff into primary and secondary raw materials, as you can see, here you can see it perfectly, this is… you see the dry fraction? There is no smell, do you smell anything here? There is much less smell than there is in the packages because if there is no organic material, it logical. This stuff would all have been sent to the disposal dump, but at least 80% of it, you see that racket … is plastic, so that was our logic … "
Blog: "You get your hands on this stuff … "
Carla Poli: "No, this goes directly into the process, but we do check it to make sure that it is properly sorted. This, instead, is plastic packaging material for which there is no ready market and the Conai National consortium earmarks it for disposal or incineration, but we are able to recycle it. All this material is re-checked before going up to the plant. There is a magnet along the way, so if there’s any metal items … we even recover any metal and aluminium here … because within the dry fraction, someone may overlook a tin can, which we then recover, as well as even the smallest pieces, which we sell. It’s aluminium after all, there are machines to do this job, and it is used in… "

A virtuous industry
Blog: "In your opinion, can anything be done about the compromised material like the eco-bales from Naples? "
I don’t know what is in those eco-bales, but if they include organic material … if it is busy fermenting, which means that it includes organic material, then the first step would be to remove all that organic material, otherwise it can’t be turned into … "
Blog: "Otherwise we wouldn’t be able to breathe here in the first place … "
Precisely! Instead, that problem doesn’t exist here. Let’s skip ahead. After this, it goes into that machine whose blades are being replaced at the moment, where it gets cut up, then heated and melted, then cooled until the temperature drops to around 160/180°, so there is no combustion, the plastic material is simply melted. It also includes certain other materials, such a wood chips, in accordance with legal requirements because there are in fact existing laws, regulations and UNI standards in place. After densification, the material is cooled because it comes out hot. It then goes into that grinder, which is actually called a granulator, then into a screener that separates the smaller particles from the larger ones, after which it gets bagged. "
Blog: "So, these bags contain the magic material then! "
Carla Poli: "This is a type of material that, this is densified material, comes out soft, you can see how soft it is, and then hardens into granules, or even this … because we don’t make any end product, we merely produce the raw material for other companies."
Blog: "Are there those that want it a little coarser … "
Carla Poli: "I don’t keep any material in stock, we only produce to order, booked beforehand. We always produce what the customer orders, for example, if we have a customer who wants the material more or less dense, more or less cooked, more or less fine, then we produce it for him, we’re not a supermarket that has a 3 for the price of 2 sale, here we have to produce what we can sell because if we get 100 tons coming in every day, then 100 tons must go out at all costs every day! "
Blog: "How many people work in a plant such as this? "
Carla Poli: "We have 64 employees, however, we also send some materials out to other companies for processing. There are a number of companies in Treviso Province that are involved in re cycling, for example, these crates are sent out to a company that washes them and then grinds them up into flakes, which they then sell on to another company that will use the material to manufacture new crates or perhaps basins. "
Blog: "So there is also secondary employment. "
Carla Poli: "Yes, there is secondary employment. A research institute has calculated that the secondary employment resulting from our company amounts to around 9,200 people. This is what they have calculated. We could do the work ourselves, but we would have to bring in special machinery and then we wouldn’t get around to doing what we do, namely the initial recycling! Up there is the platform where we do all the sorting and all these rooms will soon fill up, one with clear bottles, one with blue bottles and one with mixed colours. Once a room is full, we push the material up to the press, via these conveyor belts that feed the press, that green machine over there that produces bales, which then go to the production storage warehouse. This, instead, is a production stock pile, which means that, should one of the machines in the first section break down, the second section can continue working. This screen does a great job. It separates out all the light plastic, which has not ready market, as well as the small pieces of plastic. It is called the undersieve. It sends all the bottles and containers up to the platform and it basically does an initial screening of the plastic material so as to optimise production. If we had to do this by hand, we would require another platforms. You hear the noise? That’s because there is glass in this material. We organise all the various materials. A week before delivery we already know what type of material will be delivered so we plan our production around the various materials to be delivered. So, knowing what materials will be delivered, each of the work teams knows what has to be done. We know precisely what types of packaging or other material will be coming in … are sold either before or after they are actually delivered to us, so we have to know what it is and how we’re going to recycle it so that we can gear up our production. So, once again we come back to production. This is a closed circuit, as is the case in nature, not an open cycle. You see, recycling begins at school, because that is where we get the kids used to the idea of re cycling. These are bags of dry fraction, you notice that there are no black bags? We don’t want black bags because the responsibility lies with those that deliver the waste, so they must not think that it has to be concealed, you can see that this is dry fraction, so they are more careful, otherwise it will be seen because the truck operator has a clear view, so he may say: no, this is not okay, so please sort it properly and be more careful in future. If, instead, the bag is black, you can’t see what’s in it. This price we charge for this kind of refuse collection is..... nothing, understand? The other instead… packaging, tin cans, plastic, they separate at the schools, you notice how this stuff has all been separated? All we have to do is put it on the line. It all passes under a machine, if there is any metal or aluminium, because these days tins are made of metal, so, if its metal, it has to be separated from the… however, the bulk of the work has already been done by the schools, and it cost them nothing to do it because instead of putting it there, they put it here, so it is merely a matter of conscience, because they see because they come here on visits and they see what we do with the various materials. "
Blog: "How much would it cost to set up a plant such as this one? "
Carla Poli: "That depends on how much material has to be treated. If you want to set up only the first section or perhaps only the second section, then it cost us around 5.5 or 6 million Euro. But we are continuously buying new machinery , because it is not as if … here they have just loaded a truck with a specific type of material, so… but do you see our selection process? You see the containers, the coloured bottles, the clear ones, the blue ones, that’s what the Italian market wants. The black material, that’s the crates, then there is the nylon, while the assorted stuff that comes in... that’s how it arrives here. That white stuff is all polystyrene bags from a company that has already separated them, then there’s also the cardboard. We separate the cardboard and send it out to the paper recyclers, while the polystyrene goes off somewhere else. After this, there are all the other operations, in other words, the secondary employment is created by the various types of material to be processed. In Sardinia for example, where we will soon be inaugurating a new plant, which will merely be an official inauguration because the plant is already operating, a new co-operative has been established to utilise the granulate in the construction sector, because they currently purchase their sand from the Continent and this is costing them a fortune, they re-utilise it. However, businesses are now being established to utilise this material and, in order to do so, they have to find new ways. Hence the collaboration with the universities and research institutes in Cagliari and Sassari, which have excellent researchers, so we don’t have to go out and find researchers abroad because there are researchers right here, many of whom are indeed looking to go abroad! So we have agreements in place with various university laboratories because certain universities specialise in one specific field, while others specialise in other fields, so you have to go out and find them. This is a job that requires patience and determination, it’s a real job! "
Blog: "But not impossible."
Carla Poli: "No, it is certainly possible. We haven’t only been around since last year, we’ve been around for decades now. At first it was much more difficult to find ideal solutions. But once there are rules and regulations in place that stipulate …., all you have to do is toe the line!

Posted by Beppe Grillo at 10:43 AM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 08, 2010

The Pigs' debt

The web of debt of the Pigs of Europe

Five Countries constitute the so-called PIIGS of Europe, namely Greece, Spain, Portugal, Ireland and Italy. "We’re five little piglets, five little brothers and no one will ever tear us apart, tralalalala!!" Contagious pigs, carriers of swine plague. A plague called debt, with which they have infected Europe. When one of the Pigs defaults, its creditors are also at risk of bankruptcy. The other European Countries must rescue the Pigs in order to save themselves. In terms of debt to European nations, Greece owes 236 billion Dollars, Portugal owes 286 billion, Ireland owes 867 billion, Spain owes 1,100 billion and Italy, the most contagious of all, owes 1,400 billion. The Pigs are even indebted to each other. Greece owes Portugal 9.6 billion Dollars, which in turn owes Spain 58 billion, which in turn owes Ireland 14 billion. Public debt is like a game of smoke and mirrors in which everyone involved could be left holding the baby. If Greece were to fail, Europe could still survive because the effects of Greece’s debt with other European Countries are still manageable. However, if Spain or Italy were to fail, the Euro would cease to exist. The greater the level of public debt of one of the European Pigs, the faster the spread of the contagion and its destructive effects. Via their public debt, the PIIGS have passed on part of their illness. They have lived well beyond their means, using the means of others. The contagion has already begun. Italy, the European Country with the highest public debt, has three major creditors, which it can bring down whenever it wishes (this is the power of debt), namely Great Britain, to which we owe 77 billion Euro, Germany with 190 billion and France with 511 billion. Italy’s debt to France amounts to 20% of our GDP. In other words, Italy has ceded part of its National sovereignty to France (they party that holds your debt is your master, that is until such time as you fail completely). This explains the unseemly haste to import French nuclear power stations into Italy. It is what Sarkozy wants! Italy’s debt to France is equivalent to no less than five nuclear power stations. Europe is held together byinterconnected debt.. The most important debt hub of all is Italy. Now, at the time of this Country’s 150th Anniversary, there is something to be proud of. No other Country can match Italy’s power to make Europe fail and perhaps we may still succeed! Pigs are born and, modestly speaking, we were born a Pig.

Posted by Beppe Grillo at 06:34 AM in Economics | Comments (6) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 29, 2010

Greece is on fire and Tremorti is the fireman

Greece is on fire and Tremorti is the fireman

"We have to have fiscal federalism or else Italy will go the same way as Greece, it is absolutely essential." Bossi said this without adding that with fiscal federalism, the cost of which no one has bothered to work out, we will go the same way as Argentina. It’s hard to choose whether to declare bankruptcy immediately or to delay? The rating agencies downgraded the Greek government bonds to the status of trash. There is no longer a market for Greece’s debt and the Country’s bonds are completely unsaleable. The only ones buying them are the Greek banks, ordered to do so by the central Government.
Without access to debt, Greece can only plead for charity from other Countries in order to avoid bankruptcy and default on its public debt repayments, with its subsequent exit from the Euro.
This charity, which is inadequate in any event, has been slow in coming, and the aid required in order to avoid immediate bankruptcy is estimated to be 45 billion Euro. Greece needs to find 160 billion Euro over the next three years just to fund the interest payments on its maturing government bonds and its annual deficit between income and expenditure. The 45 billion Euro loan will be partly funded by the International Monetary Fund, to the tune of 10/15 billion, and the remainder by a number of European Countries, amongst them Germany with 8.4 billion and Italy with 5.5 billion (almost triple the amount contributed by Holland and more than Spain’s 3.7 billion).
86% of all Germans are against the loan. They don’t want to pay the price for other Countries’ free spending. Tremorti, instead, is very enthusiastic, but the opinion of the Italians is unknown, mainly because no one has even bothered to ask them what they think. Before handing over any of the German people’s money to Greek Prime Minister George Papandreou, Ms. Merkel is demanding some sort of assurance that Greece will balance its books. Instead, Tremorti is in a hurry to hand out the loan for fear that the fire will spread. Indeed, Greece is very close by. Our public debt currently stands at approximately 1,800 billion and during the first few months of 2010 it increased by more than 30 billion, while Italy’s unemployment rate is comparable to that of Greece. Our import/export balance for 2009 stood at minus 280 million Euro, while in 2008 it was plus 10 billion. Our tax revenues are declining month after month, our public debt is increasing continuously and our debt to GDP ratio is the worst it has been in the past ten years at 52.3%.
The Greek and Italian figures are very similar indeed. In some areas theirs are worse and in other areas ours are worse. If Greece eventually fails, the Euro will totter. If Italy eventually fails, the Euro will sink altogether, together with all our creditors. For the time being, our huge public debt is also our saving grace.
In 2010, Tremorti will have to move 450 billion Euro worth of government bonds and pay out 70/80 billion in interest (equivalent to 4/5 annual budgets) on the bonds already issued. The Greeks are absolute amateurs by comparison.

Posted by Beppe Grillo at 06:07 AM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 26, 2010

Stiglitz, Greenwald and the future of the crisis


While on a trip to Columbia University, Mauro Gallegati interviewed Professor Bruce Greenwald, generally deemed to be the "guru of all gurus of Wall Street", and Joe Stiglitz, winner of the Nobel Prize for economics, on behalf of the blog, regarding the current crisis.

Mauro Gallegati: The current crisis poses a number of problems: what economic theories do we have at our disposal, is it possible to make a comparison with 1929 and how long will it continue?
Greenwald/Stiglitz: The crisis that began in 2007 has highlighted many of the problems of the liberalist ideology, in particular the idea that a free market can resolve all of our economic problems through the efficient allocation of resources by some sort of "unseen hand". And so, thanks to the idea that the liberalisation of the financial markets would lead to a sharing of the risk (via the derivati), market fundamentalism caused the economic system to take on more debt than what it would later be able to service. After a period of disorientation, the economic theory is busy regaining its earlier position. It is not difficult to believe that, once the crisis has passed, economic considerations will once again dominate, without any concern for the intellectual losses suffered.
However, contrary to popular belief, the economic crisis is not so much due to the crisis in the sub-prime mortgage markets but by the excessive indebtedness of American families, the public debt and the United States’ international trade deficit. It is almost as if the Chinese were funding American growth. Does anyone really believe that this process can continue forever?
One aspect that is often overlooked is the issue of unemployment, in other words, those who actually pay for the crisis. In the USA, the number of workers without jobs is far higher than the figure specified in the official statistics, which don’t reflect the chronically unemployed: if these were to be included, the unemployment rate would be hovering around 15%.
It is certainly important to rescue the financial system, but the real causes of the crisis will remain unresolved: Wall Street will get better, the banks will once again make profits, but the job situation won’t improve and the financial situation of the average American family will take a very long time to recover. In other words, the financial system will somehow manage to survive (until the next financial crisis) while the cost will be borne by the workers and the taxpayers. What about the families of Mediterranean Europe? You are hoping that the Euro holds on! For now, perhaps unwillingly, Germany will help out (forcing Greece to pay high interest rates on the financial aid). Will it do so again when it’s the turn of some other (large) Country instead of Greece?
Mauro Gallegati: Globalisation frightens many people and encourages others. What are your views regarding the future of globalisation?
Greenwald/Stiglitz: The fear that some Chinaman is going to take away your job is as widespread as it is irrational. This is because economies are structured differently. Agriculture provided the majority of American jobs back in 1850; now it provides less than 2% of jobs. Manufacturing was an important sector for more than a century, but now, in the USA, there are more people employed in the sports sector than what there are factory workers. Machines now do the work.
Globalisation will come to an end because we are moving to a post-industrial society in which services will dominate, which are in many cases not exportable (if your motorcar breaks down in Italy, you’re not likely to go and have it repaired in Bulgaria simply because it would cost less there). It is also not difficult to imagine that education and healthcare will be the leading sectors in the future: here we can look more optimistically at the USA and less so at China, Japan and Germany, whose economies are still closely linked to industry. The time has come for a Country like Italy to gear itself up to fully exploit it’s heritage of art, tradition and culture, which has the potential to attract millions of tourists. One word of warning though; the three Countries mentioned above are investing heavily in research and they are preparing to make the leap. A leap that will not be painless, but nevertheless essential because without research, there will be no future.

Posted by Beppe Grillo at 06:18 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

March 21, 2010

Municipalities with built-in debt

Municipalities with built-in debt

Grillo steals the show in Bologna

Beppe Grillo putting on a show at the end of his address on 20 March 2010 in a crowded Major square in Bologna

Alviano (1554 inh), Baschi (2742 inh), Guardea (1883 inh), Lugnano in Teverina (1593 inh), Polino (284 inh) Stroncone (4815 inh) are not actually Municipalities, but rather investment banks. Together with otherUmbrian Municipalities they bought into swap arrangements, or “derviative” financial instruments, to the tune of 466 million Euro. Even some small municipalities where the word “swap” has some sort of mystical, metaphysical or even hallucinogenic quality landed up in debt because they tried to act as financial experts.
Swaps enable the investor to get money in advance from the banks on the basis of significant predicted earnings. Now, after the crisis, these Municipalities find themselves having to pay back money with the initial capital gone. Swaps are like legalised usury, a game of Russian roulette played with only one empty chamber. You take the money today, trusting in God and paying sizeable commissions to the trading banks. In the case where a Municipality is unable to settle the accumulated debt, they can refinance the debt by taking another gamble, another swap, and so on until the crash happens. In this way, they hide any budget shortfalls by making risky investments that remove resources from subsequent annual municipal budgets.
What usually happens is that the mayors that deal in swaps never have to answer for their actions because the losses are shouldered by their successors and the local citizens. In total, the local municipalities invested in swaps to the tune of 35 billion Euro, which makes up one third of their entire debt (source: Financial Times).
Derivatives are somewhat like the field of miracles in the tale of Jack and the Beanstalk. The field of miracles where they planted gold coins and trees sprang up overnight to make the money grow. How can any municipality hope to ever escape from this unsustainable debt resulting from the trade in derivatives? They lodge a complaint against the banks, which, in their opinion, defrauded them. Milano has led the way by lodging complaints againstJP Morgan, Depfa, Deutsche Bank e UBS. The"Milanese derivatives" were subscribed to back in 2005 by Albertini, the parking garage king, who is now enjoying his old age as a Euro-Parliamentarian in Brussels. A thirty-year investment the equivalent of an annual budget, namely 1.7 billion Euro. The Municipality doesn't want to bear 100 million Euro of loss (accumulated to date) and has taken legal action to claim 239 million Euro in compensation. The Municipality only realised after four years that they had signed an idiotic contract, which did however give them access to cash up front, thereby admitting that they were not of sound mind. The court case is due to commence in May and this blog will be following the proceedings closely.
Who was it that allowed the Municipalities to empty their coffers into derivatives? The unstoppable Tremorti of course, Italy's king of debt, via the 2002 Budget Law . Given the resulting disaster, he proceeded to ban this type of investment in 2009, what a forward thinker!.

Posted by Beppe Grillo at 06:57 AM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 23, 2010

The end of recreation

Berlusconi at the inauguration of the Pedemontana
An article published on 13 February in "The New York Times" has been hardly noticed in Italy. And yet it is the bell that indicates the end of recreation for the Italian economy. The headline "Wall St. helped to mask debt fueling Europe's crisis" summarises the hypothesis of the three authors: L. Story, L. Thomas, and N. Schwartz. The American banks and above all Goldman Sachs have allowed certain European countries to hide their deficit from the EU. The one with most exposure is Greece, that in 2000 and 2001 had at least two contracts of “swaps” with Goldman Sachs with names drawn from Greek mythology: Ariadne and Aeolus, to get immediate cash in exchange for a deal on future earnings from airport taxes and lotteries. The Greek government classified the contracts as sales and not as (risky) long-term loans. No one knows how many of these contracts have been drawn up and for what value.
Angela Merkel has declared that it would be a scandal if Greece had hidden its debt. According to the agency Bloomberg, there are at least 15 banks that have granted loans in the form of “swaps” in which the risk of the other party is down to Greece. Basically with the “swaps”, the banks provide sums of money in advance according to an event that may or may not happen and (usually) it doesn’t happen. Thus the client then finds they have to repay the loan with hefty interest rates as is happening for many Italian towns that have got into debt in recent years. The “swap” is used to move a debt further into the future but sooner or later it has to be paid. It’s like a credit card. The problem gets more serious when the debt is not declared as such and it suddenly pops up on the States’ balance sheet. The same that happened with the sub-prime for the banks can happen with the swap derivatives for the States.
The banks are always searching for great business opportunities and the States that are about to go under have always been just that. Last November, with Greece in a full crisis, Goldman Sachs went back to Athens to the scene of the crime to put forward the suggestion of using the umpteenth financial instrument to push the Health Service debt into the future. Greece did not accept, or perhaps it was not able to accept.
The article also mentions Italy … “Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.” …. “countries like Italy and Greece entered the monetary union with bigger deficits than the ones permitted under the treaty that created the currency. Rather than raise taxes or reduce spending, however, these governments artificially reduced their deficits with derivatives.” At the end of 2009, Greece’s public debt was 298.5 billion euro. If Greece were to default, it would drag down with it many large banks. However, the Greek economy is only worth 3% of the European GDP. An intervention plan is possible. The true threat to European economic stability is Italy, according to Robert Mundell Nobel prize-winner for economics. Italy has about 1,800 billion euro in debt, six times that of Greece, a quarter of the whole European debt and it could be the target of speculative attacks. How many derivatives has the Treasury contracted to? And with whom? And with what conditions? On the public debt, State secrecy should not operate. Tremorti, if you are there, knock once!

Posted by Beppe Grillo at 06:43 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 06, 2010

Eugenio Bentazzi's Chaos Economy

Asiago made in Wisconsin

Greece is about to be placed under administration because of its public debt and its ratio of debt to GDP. The level of debt is rising while production is dropping. In essence, Greece will be obliged to surrender part of its economic sovereignty to the EU in order to survive. Today’s newspapers are talking about the European Countries that are in trouble, without mentioning Italy (!?). PIGS, an acronym representing the four Countries at risk, namely P for Portugal, I for Italy, G for Greece and S for Spain has thus become an unpronounceable PGS. Italy has disappeared so it must have become virtuous. Portugal, which is widely believed to be the next Country to follow in Greece’s footsteps, has a public debt to GDP ratio of 76,6%. If only ours were that low! Italy is sitting with a debt to GDP ratio of 115% and 1,800 billion in public debt. The beauty of the economy is that it is so varied and everyone can continue to bullshit until the moment of default. As from today, the Blog has a new host, namely Eugenio Benetazzo, and a new appointment with "Chaos economy".


The public debt and the PIGS (expand | compress)

A friendly hello to all the readers of the Blog. My name is Eugenio Benetazzo and I am an independent Stock Exchange trader and an economics expert. We are going to attempt to provide a framework that is as exhaustive as possible on the economic and macroeconomic scenario facing our Country. We are all well aware of what has happened during the past 18 months, including the phenomenal interventions implemented by Western Governments, in order to bolster their economies. Now, with the benefit of hindsight, we realise that nothing has changed and the problems that existed 12/18 months ago, particularly the problems of debt, have merely been postponed. The debt has not disappeared, nor has it been covered, but it has simply been converted from banking system debt or debt accumulated by specific groups of companies to public debt, which has thus been placed at the door of the various communities, in other words the various Countries.
If we take a closer look at our Country, we realise that Italy’s public debt, which has now risen to a very serious level of more than 1,800 billion Euro and that, when compared to the Country’s falling GDP in 2009, gives a debt to GDP ratio of more than 120%, we find that this macroeconomic variable is beginning to become a particularly serious concern because if, as usual, we consider what is happening in Europe, such as the downgrading of Greece’s public debt less than one month ago, we begin to see a possible scenario that is anything but comforting. Greece itself is one of the smaller European Countries and the fact that such a relatively small Country can default on its debt is not particularly disturbing in itself. However, this changes if we begin to consider the so-called PIGS, or Countries with a macroeconomic scenario that is very similar to that of Greece. PIGS is an acronym that stands for Portugal, Italy, Greece and Spain, all of which have shown a significant increase in their levels of public debt precisely in order to support their respective economies during the past year

Argentina (expand | compress)

We often hear talk of comparisons with what happened in the past, especially as regards the case of Argentina, which occurred some ten years ago now but is beginning to reveal a number of similarities with our current scenario and holds potentially negative consequences for our Country, as well as for Europe as a whole. When Argentina defaulted on its debt, the Country’s debt to GDP ratio stood at 138%. Ours is currently standing at more than 120%, so we are beginning to get uncomfortably close. In addition to the problem of the Argentinean debt, we must not overlook the concerns linked to the so-called southamericanisation of any given Country.

Southamericanisation is a term used to define the substantial, widespread and progressive impoverishment of the majority of the population while the wealth of a small number of people skyrockets. That is precisely what is happening to us Italians, with a systematic increase in our level of debt and, on the other hand, an absolute plunge in our ability to save.
The most important question we need to ask ourselves, as has emerged from the analysis in the Italian financial press, is how the deficit of some 37 billion Euro will be covered over the next three months. A deficit of 37 billion Euro is not unreasonable considering the reduction in company invoicing in the previous quarters, a drop in company invoicing that has resulted in reduced tax revenues. Tax revenues are therefore insufficient to cover the Country’s current running costs on an ongoing basis. But there is more, and certain independent analysts are beginning to raise the possibility of the Government implementing a mandatory tax levy, as was done by the Amato Government back in 1991 whereby, if any of you can remember, a tax of 6 per thousand was levied on positive bank balances in view. If we add up the amount of money that is currently in the hands of the Italians in the form of financial capital, we find that this is in excess of 2,500 billion Euro, we then calculate that 1% or 2% of that would cover the 40 or 50 billion Euro shortfall. These are not my words but those of recent statements made by the current Government

Imminent future default? (expand | compress)

From a financial perspective, the Country is currently burdened by 82 billion Euro of interest payments (per year, Ed.) and debt repayments, past debt that is made up of two parts, namely 2/3 medium – long term and 1/3 short term debt. If we take a look at who is holding this debt, we find that 50% of it is in the hands of Italians, namely the banks, pension funds, mutual investment funds, etc, while the remaining 50% is in the hands of foreign investors. This would lead one to assume that any form of default would be highly unlikely in the Italian situation because, if anyone were to compare it to the Argentinean situation, the fact is that the latter was a very different case as regards the holders of the public debt, whereby 90% of Argentina’s public debt was held by foreign investors, which enabled the Government to default on payments precisely in order to avert any repercussions within the Country.

The de-industrialisation of Italy (expand | compress)

What we are paying for now, in terms of the reduction in manufacturing activity, is none other than the collateral effects of absolutely criminal business decisions. In Italy, both the right wing and the left wing and including the centre, embraced the choice of progressive de-industrialisation, assisting entrepreneurs and major industrialists to shut down their manufacturing plants in Italy and to set up shop elsewhere, outside of the Country’s borders and even outside of the European Community by enabling the much-vaunted "commercial bridge", which everyone knows about and that creates economic inequality by enriching those that are able to exploit the so-called industrial transformation system and impoverishing those that instead bear the consequences. The has not been a single political force, not to mention political farce, that has come out in defence of the areas where our Country’s real strength lies, namely the “Made in Italy” brand, tourism and the manufacturing hubs for which Italy is renowned worldwide. We have recently witnessed an economic phenomenon whereby other Countries exploit the opportunity to clone or copy products, using vocal similarity to counterfeit certain Italian products to produce similar products outside of the “DOC” or “DOP” areas, for example Asiago cheese produced in the State of Wisconsin or Limonciello liqueur (with an i) manufactured in China. Unfortunately, anyone who truly believes that, anytime soon, we will be in a position to regain the level of competitivity enjoyed by most Italian manufacturers only ten years ago thanks to a favourable exchange rate is very sadly mistaken.
More specifically, we are facing a collapse in the industrial manufacturing sector that will take us back 20 years, meaning jobs that we will never be regained. Those who are thinking about copying the English model, which is based on the services and advanced tertiary sectors, has unfortunately entirely failed to grasp precisely what happened in England, a Country that, more than 20 years ago now, chose to follow the Thatcher route that entailed the selling-off of major State assets, or in other words privatising everything. Now, twenty years on, while England is still rueing those criminal political choices, these people that continuously talk about a recovery while in 2009 our GDP dropped by 6% and the forecasts for 2010 show an expected recovery of + 0.10% or 0.20%, in my opinion this is anything but a recovery and smacks of us being taken for a ride

Thanks to all of you, good luck and see you again soon!

Posted by Beppe Grillo at 08:52 AM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 31, 2010

The point of no return

In 2008, the States saved the banks from collapse, the very same banks that had caused the crisis. From that moment a world domino effect started. Since the world financial crisis that lasted a few months, the time needed to inject liquidity into the banks, there’s been the passage to the economic crisis with chain reactions. Closing down of the companies, mass sackings, drop in consumption, collapse in the value of the property market, reduction in the tax revenue. To avoid collapse, the States have used the Public Debt. They have got the citizens into debt without their being aware (in the public imagination, the Public Debt is always someone else’s), first to keep the banks alive, then for current spending. The effect of the increase in the Debt has been the increase in interest rate that the States have to pay to those who bought the newly issued bonds. The interest rates are blocking the development of the country. The more the interest on the Debt, the lower the capacity of the economic policy. The more the Debt rises, the more the cuts to the social State are the only possible solution.
If before the crisis, a State had a high Public Debt, it has had to get into debt beyond the point of no return. The question that everyone is asking is “When do you reach the point of no return?" It’s simple, when no one buys State bonds anymore. In the absence of buyers, the State has to declare itself bankrupt, it goes into default, it doesn’t pay the salaries of public employees and it doesn’t pay out pensions. Another question that has to be asked is: “Which States have the greatest probability of failing?” Once more the answer is simple in this case, the ones that had a big pre-crisis Public Debt and as well as a big increase in it post-crisis, have decreased their capacity to produce. They are producing less (the so-called GDP) and at the same time, they are increasing their Debt. In the EU, there are at least three States with these characteristics: Greece, Italy and Spain.
Greece and Italy have the same strategy in common, to sell their Debt to the States beyond the EU, in as much that the EU is not managing to satisfy the continual offers of “Tremorti” and of George Papandreou. Curiously, “Tremorti” sold our Debt to China last month and given that the Debt is ours and we don’t know the value of the sale. With the Debt, China has bought a part of our national sovereignty, perhaps Termini Imerese or privileged slides for foreign trade. However, even the Great China has its limits, and after digesting “Tremorti” it didn’t buy the 25 billion Euros of Greek bonds that were offered last week by Goldman Sachs.
At Davos, the people talking about the world economy are the same people that caused the biggest bubble of the last 150 years. There’s a question going around: “Which will collapse first, Italy or Greece?” The international investors have already given a technical response. The State Bonds of the countries at risk are covered by an insurance against their collapsing, called “CDS, Credit Default Swap”. Italy is in the top position, way ahead of the second in the table. Greece is only in fifth position. Into the catastrophe with optimism.

Posted by Beppe Grillo at 08:10 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 16, 2010

Person of the Year: The Italian Public Debt


Without any doubt, the real person of the year is none other than the Italian public debt. It has grown more than the economy, inflation or the people’s salaries. In October it climbed to more than 1,800 billion Euro and then took a break in November, settling at around 1.783 billion just before the Christmas holidays. It is ready to take off again and surprise everyone in 2010. No one knows what heights it could achieve. Those who have dared to make forecasts have always been beaten by the reality. 2009 will close with a public debt that is forecast to be about 140 billion higher than that at the end of 2008, which ended with a public debt of 1,664 billion. Every Italian is personally liable for 30,000 Euro, a debt accrued on his/her behalf by the Government. Therefore, a family of four has a cumulative liability of 120,000 Euro. Each of us would have to take out a twenty-year loan to repay this debt. In 2009, Tremorti indebted us to the tune of almost one billion Euro more every two days. On what has he spent this monumental amount of money? What we want to know is where has all that money gone? No one knows for certain. As at the end of November, the Treasury’s account balance between income and expenditure stood at less than 74 billion. Expenditure increased by 44.8 billion compared to the same period in 2008. Tax income dropped by 3.4% in a single year while expenditure rose by 11.1%. A crazy economic policy that no family man in his right mind would dream of applying to his family budget. Our public debt is amongst the highest in the world and has to be addressed, but no politician is willing to talk about it. So our debt is growing and our GDP is falling? No problem, our debt becomes part of our GDP. Italy is one of the biggest producers of debt and exports it everywhere. Tremorti placed a not insignificant amount of it on his last trip to China. Any party that holds another party’s debt can control the debtor and, if the debt is large enough, he becomes the debtor’s master. It works the same way when one is talking about Countries, but who is the holder of our debt? Who is our master and is thus able to influence, for example, our foreign policy or economic policy? The final debtor, namely the man in the street, has no answer to this question. The fact is that we simply don’t know. Prior to the coming of the Euro, monetary inflation was the tool used to balance the Country’s books. Purchasing power would decrease and we all became poorer. Now that this tactic is no longer possible, the debt increases to the point of default. That’s because not even a debt as sound as that of Italy can continue to increase indefinitely. However, today our debt is the world’s latest “Made in Italy” product, if you think about it, it’s absolutely fantastic, productivity along the lines of the olden-day Brianza. Italy is producing half a billion Euro a day of export quality public debt. The public debt is the Country’s top industry and can only grow! Heading for catastrophe with optimism.

MoVimento 5 Stelle Emilia RomagnaOn Saturday 16 January at 12h00 I will be addressing a press conference at the Farnese Chapel at the Bologna Municipality premises in Palazzo D' Accursio, to announce the regional election list; click here.

The first Signature Day for the MoVimento 5 Stelle in Emilia Romagna: On Saturday 16 we will be accepting signatures in Bologna, Modena, Reggio Emilia, Cesena, Piacenza, Guastalla. On Sunday 17 it will once again be the turn of Modena and Cesena. Click here to view venues and times:

MoVimento 5 Stelle VenetoOn Saturday 16 January at 16h00 I will be dropping in to visit the guys of the MoVimento in Piazza delle Erbe in Verona and at 18h30 in Piazza Ferretto in Mestre (VE). At 21h00 I will be addressing a press conference at the Adria Municipal Theatre at No.1, in Piazza Cavour, to announce the regional election list for the Veneto Region.

MoVimento 5 Stelle PiedmontOn Saturday 16 and Sunday 17 January the second Signature Day will be held for the Piedmont Region. Come down and add your signature to the list, free of charge, at the tables in Turin, Ivrea, Chieri, Bussoleno, Asti, Alessandria, Cuneo, Alba, Bra, Mondovì, Fossano, Biella, Cossato, Novara, Vercelli and Omegna. Full details regarding the agenda (remember to take along your identity document). click here.

MoVimento 5 Stelle Lombardy - To find out when and where to sign to support the election list, click here.

Posted by Beppe Grillo at 06:45 AM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 10, 2010

Single tax rate of 5%

Tremonti strikes again!
The reforms that are “shared”, “wanted by the citizens” and that “are of interest to the country” are not stopping. In fact they are increasing. Together with the reform of the justice system so that you don’t go on trial and you don’t land up in prison, and the reforms of the Constitution so as to do anti-constitutional laws, Berlusconi has a third law ready: the tax one. A reform done for simpletons. In fact they will never do it because it relates to all the tax payers and not the tax dodgers. It’s an election flash. Just two tax rates, one at 23% and one at 33% with a revenue for the taxman reduced by a few billion euro. To be coherent, Tremorti should have a single tax rate of 5%, the one used for the fiscal shield.
When they speak, they are all close to those who pay taxes. Tremorti wants the tax authorities to be the “friend” of the citizens and to be "socio positivo" with the companies. Paolo Bonaiuti explains that “the government has the intention of designing a system that takes Italy into fiscal modernity”. The PDminusL Opposition through the mouthpiece of Bersanetor, the spokesperson of D'Alema, has however been more specific: “That’s a mistaken proposal as it helps the rich”. For one who, as a result of his absence from parliament, has brought about the approval of the fiscal shield, has helped the ultra-rich and avoided the fall of the government , that is a mega-galactic way of taking the citizens for a ride.
If they want a fiscal reform it has to be based on principles of equity. The amount of tax must not be done at source, with every tax payer declaring their income once a year. No difference between work as an employee and as a non-employee. The research studies carried out in each sector has to be abolished. No one can have the knowledge in advance how much a person will earn and pay tax in advance for an income that often is not in fact earned. Finally if someone is caught red-handed in dodging taxes, any citizen must be treated like a complete tax dodger, a mafioso, an arms trafficker, who exports currency abroad, paying just 5% and then enjoying anonymity. In a few weeks, straight after the elections, there‘ll be not a whisper of new rates of tax as there’ll no longer be any need.
Before the summer, Tremorti, always within reach of a helicopter, will explain to us that the accounts of the State are out of control, that every day he has to sell State bonds worth a billion and a half euro, that he has to sell in 2010, to avoid bankruptcy, AT LEAST 480 billion euro’s worth of State bonds like BOTs and BTPs and that in 2010 we will break through the threshold of 2 thousand billion in public debt, that the unbalance between the money coming in to the State and the money going out is due to be made worse for the lack of tax revenue coming in from millions of people who are unemployed and hundreds of thousands of small and medium sized enterprises, that just for the interest on the debts, unless inflation goes up, the State will be paying 80 billion euro. “But (for the moment) Tremorti does not know this.

Posted by Beppe Grillo at 08:29 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 30, 2009

Fat brothers come back home

Fiscal Shield: the great mess-up
The fat brothers are coming back to Italy with the most shameful clanging of the bells and festivities from the media in the last 150 years. They are coming back thanks to the fiscal shield of the PDL-PDminusL mess-up. The fat brothers have got fat abroad by enjoying the services of the State in Italy without paying for them. They are total tax dodgers, civic delinquents. The Italians who have paid taxes for them as well in these years, the manual workers, office workers, public employees, entrepreneurs, are instead the lean brothers. Between the lean brothers and the fat ones there’s a big difference. The lean brothers are honest, the fat ones dishonest. The State is welcoming the fat brother like a prodigal son, with a fanfare from the newspapers and the TV as though a virtuous hero were coming back from the front. If Mangano was a hero, anyone who has kept their own earnings out of sight of the tax authorities deserves a gold medal.
The money of the fat brothers is of unknown origin. It could come from drugs, from trafficking in arms or organs, from corruption. It’s contaminated money. Its filthy owners are also anonymous and they will stay that way thanks to the Fiscal Shield. This riff-raff with an offering of 5% will once more be virgins and they will be able to invest their money without fear of anyone checking up. It’s not the money of manual workers and neither is it of entrepreneurs with a civic feeling, Italians who have paid 50/60% in taxes, often in advance, often on presumed income. And it’s thanks to the taxes of the lean brothers that the country has not yet gone bankrupt.
Now, the people of the honest ones, as opposed to the “people of love” who want to sanctify a State thief like “Bottino Craxi”, has become the “people of the daft”. The people that have paid taxes even for the others. Taxed and done in.
Tremorti is pocketing the alms-giving from the tax dodgers as the Italian banks are pocketing their wealth, at least for now. Money has no passport. Folk like Profumo and Passera who tour round talking about an ethical bank are not raising an eyebrow at the entrance of mafia capital in their institutions. Just one bank has refused the money of the fat brothers and it’s the “Banca Etica”. Il Corriere, owned by the banks and by the enterprises, and led by “Ectoplasma De Bortoli” today has the headline: "Scudo, il grande rientro: 95 miliardi dai paradisi" {Fiscal Shield, the great re-entry: 95 billion from the tax havens}. Italy is the new tax haven, the world’s washing machine, the money-laundering country.
The entrepreneurs that have paid all the taxes will be subject to unfair and ruthless competition from those who have never paid taxes and who can invest new capital. The employees without capital will continue to pay for loans at extortionate rates, if they can get them. How many Deputies, Senators, Ministers, and Undersecretaries have used the Fiscal Shield? If the State does not respond to this question it can consider itself done for. The lean brothers have had enough.

Posted by Beppe Grillo at 08:32 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 27, 2009

The theft of termination benefits

The theft of termination benefits: interview with Beppe Scienza

Mathematician and economist Beppe Scienza is giving you a gift for the new year. A piece of advice that will protect the value of the termination benefits belonging to anyone that has not yet transferred the money into one of the pension funds. Spread the word to all workers, to your friends and colleagues; tell them all to keep their termination benefits safe in 2010. When an orange envelope arrives, containing a request for them to move their termination benefits to one of the pension funds, simply refuse to do so. In order to catch a few more unsuspecting people, there will probably be some silent consent clause, so you must respond at all costs. On 6 June 2007, in other words well before the economic crisis hit, this blog posted an article entitled "The termination benefit murmured", containing precisely this advice: "If you work in the private sector and you don’t say anything by the end of June, then your termination benefits will land up in the managed savings funds. Something that should make you tremble with fear, because the mutual funds have been losing money for the past twenty years. Now the pension funds are ready to repeat this disaster. Silent consent is merely a trap. They change the rules of the game without asking anyone anything. It would be like playing the 3-card game with your life’s savings. They are lying when they say that they are building up a supplementary pension. All they’re doing is giving your termination benefits to the managed fund industry to play with.". Those that subsequently kept their termination benefits within the company definitely scored while those that invested their benefits lost a bundle!

Interview with Beppe Scienza:

"The latest news regarding termination benefits has caused major consternation, even though the situation is not as bad as it sounds. The novelty is that the 2010 Budget Bill will be making use of those funds that the companies have paid over to the INPS (the National Pension Fund) rather than retaining them in-house on behalf of their workers, but this is not the worst thing that could happen in that it doesn’t really affect the workers themselves. However, there are other issues that are and will continue to affect or potentially affect the workers’ situation.
The bipartisan termination benefit reform initially decided upon by Maroni and then by Tremonti together with the Berlusconi government and was then brought forward by one year by the Prodi government was one of the most treacherous blows ever aimed at the Italian workers in recent decades.
The real deceit, the true swindle and the real lie that is being spread by a number of the regime’s economists is something totally different and is the basis of the argument being used to convince everyone to opt for the supplementary pension. It goes something like this: Future pensions will probably be low, and therefore inadequate so, in order to supplement the pension income, your termination benefits must be transferred to the pension funds. This is an out and out lie, and a good one at that! It may well be that the pensions payments will be low, although it is very difficult to forecasts what pensions will be like 40 years from now. Even predicting what salaries or even prices will be like in 40 years’ time is practically impossible. However, even if it were true that they will be too low, it is still a lie that you must transfer your termination benefits to any pension fund or insurance-based fund in order to ensure a future supplementary pension. No, you should hold on to your termination benefits and when you reach retirement age, if you wish, you can then invest the funds in a supplementary pension of some sort. At that stage, if the sum you receive is higher than that paid out to the poor devil who chose to transfer his termination benefits to a pension fund now, then your supplementary pension will be greater than his.
There are some specialists in the ignoble art of pulling the wool over the Italian workers’ eyes by telling them certain things that are downright ridiculous. They use a concrete example, someone by the name of Marco Lo Conte, a journalist for “Il Sole 24 Ore”, the daily rag of Confindustria, who tells the people the following, and I quote from page 4 of the Plus24 supplement dated 24 October 2009: “for anyone who doesn't transfer their benefits to the pension funds, the only certainty is a caravan, in other words, the certainty that, when they are old, they will be obliged to live in a caravan without even enough money to buy cat food”, which is allegedly the fate that awaits 18 million of the 23 million Italian employees. Well, to say that anyone who doesn’t agree to transfer his/her benefits to a supplementary pension fund is guaranteed to land up living in a caravan only shows that there is no sense of the ridiculous at the “Il Sole 24 Ore” newspaper.
It would appear that, in 2010, all employees will be receiving an orange form with their pay packets, although the colour of the form is really irrelevant, presumably indicating what their future pension will be. The aim of this orange form is clearly to frighten the workers, but to convince them or drive them to do what, precisely? To invest their benefits in the pension funds or other insurance-based funds. Now this is something that no prudent person should even dream of doing.
Handing your money over to the pension funds involves taking two risks that don’t exist where the benefits are at the moment. The first risk, which we saw very clearly in 2008, is that a collapse in the financial markets would cause a drop in the value of one’s savings. We’re not talking bankruptcy here, because neither pension funds nor mutual funds go bankrupt, however, they can lose up to 90% of their value without being declared bankrupt. The other risk is that inflation once again begins to climb.
What is certain, however, is that in the case of either of these risks, namely either a collapse in the financial markets or rising inflation, or both, which could occur simultaneously because sometimes bad news comes in pairs, those who keep their termination benefits have peace of mind, since the value of the termination benefits does not depend on the financial markets and, should inflation start climbing, the value of the benefits will hold up excellently.
Now Minister Sacconi comes along and reiterates what he has said numerous times before, namely that: “we are about to start another period of silent consent”, in other words, another six months after which, even if a person decides against it, his/her money will automatically be transferred to the pension funds.
The termination benefit scheme works well for the workers, or rather, it works fairly well for the workers and it also works fairly well for the companies, however, it does not increase the bankers’ bottom line because the workers get their money directly from the companies, without any bank in-between to skim off any profits, without making any profits for the insurers, who have nothing at all to do with the process, the fund managers make no profit because they are in fact not managing anything, it also makes no profit for the trade unions because none of their employees are involved, whereas they have people sitting on the boards of the managed funds, nor does it make any profit for the officials of Confindustria or the other employer organisations, who instead sit on the pension fund boards. The termination benefit system also does not make any profits for the university lecturers, nor for the economists, because it runs on its own and the economists are unable to provide their consultancy services or sit on the management boards of the pension funds, in other words, there is no way for them to make money from the system. Therefore, the termination benefits system is something that only works for the workers and the companies, but doesn’t make any money for the others and that is why they have tried to destroy it. Fortunately they have not yet succeeded!" Beppe Scienza

Posted by Beppe Grillo at 06:47 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 30, 2009

Switzerland and Italy: the Euro traffickers

The Tremorti Tax Shield

Tremorti has declared war on Switzerland with the Tax Shield. This is a war between Euro traffickers. They are fighting over the tax evaders’ money. It is estimated that some 600 billion Euro that originated in Italy and was not declared to the tax authorities is now sitting in the Swiss banks. 200 billion of this is in Lusanne alone, in the Ticino Canton. To all intents and purposes, Lusanne has essentially become the homeland of the Italian tax evaders. Tremorti’s mission is to dry up Switzerland in order to balance Italy’s books, so he sent the financial police into 76 branches of Swiss banks that operate in our Country. Since September, members of the Italian financial police dressed in civilian clothes have been checking the motorcars crossing the Italian-Swiss border and beyond. Indeed, there are Swiss citizens that are now on the hunt for any tax investigators sent out “in absolute secrecy” by the authorities in Rome.
The Italian ambassador in Bern was summoned by the Swiss authorities to provide an explanation and the Swiss Minister of Internal Affairs, Pascal Couchepin, has labelled the Italians’ behaviour as a "raid" on Swiss banks.
If all the tax evaders’ funds, estimated to constitute two thirds of the capitalisation of Lusanne, were to return to Italy, the Ticino Canton would risk going bankrupt. It is like a battle to win the public thief award, the most disgusting one of all. Indeed, it can’t be anything else, when you have a tax evader who doesn’t pay tax in his own Country and exports millions of Euro to Switzerland, where the money will be safe thanks to banking confidentiality. Money that has been denied to the community, to the weakest members of society, to the schools and to the hospitals. Hoodlums that have kept their money in the shadow of chocolate and that may now bring it back into this Country on a red carpet of anonymity, of pardon, and paying a levy of only 5%. It’s a case of thieves acting against other thieves. Who will eventually win this battle, Italy or Switzerland?
Whose bloody money is this anyway? Are there any politicians involved? Are they perhaps amongst those who voted in favour of the Tax Shield or abstained from voting?
Even the Swiss are getting pissed off in their own small way. A former bank manager has stated that if he were to speak out, "The Italian Government would collapse overnight".
So speak out my little Swiss chocolate, please do us all a favour and speak out!

Posted by Beppe Grillo at 07:18 PM in Economics | Comments (0) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 26, 2009

Finance Letter, 11 January 2010

Argentine saucepans
Rome, 11 January 2010

Finance Letter
”The unexpected increase (*) of the public debt at the end of 2009 together with the partial reduction in the purchase of State bonds, and especially by financial institutions, that was recorded in the months of November and December last year, now means that the Ministry of the Treasury cannot supply the cash for the current cash commitments. The immediate consequence of the unbalancing of the State accounts will be the block on financing in January 2010, even though already approved and ongoing, of public works, evaluated by a special Inter-ministerial Committee as to whether they can be deferred in the coming 16 to 18 months. The Minister of the Economy, Renato Brunetta who has taken over from Giulio Tremonti, at the forthcoming Council of Ministers, will propose some mandatory measures to prevent the bankruptcy of the State and the consequent abandonment of the Euro. Among these, the most important is the freezing of 30% of the pensions and salaries of public employees, the 30% cut will be compensated by the assignment of an equivalent amount of 5-year State Bonds. The interest on the State Bonds, estimated to be between 0.5% and 0.8% will be calculated every three months. The Bonds will be bought back when they fall due. The re-entry of capital from abroad that took place in 2009 thanks to the Fiscal Shield was not sufficient to allow for a greater purchase of public bonds by the banks, as had been forecast. The tax rate on the returning capital brought only 4 billion euro to State coffers, clearly insufficient for any type of turnaround in the debt situation. From government sources, it seems clear that not only the President of the Republic, Giorgio Napolitano but also all the groupings in Opposition, are in agreement on the urgent approval of the measures to freeze public salaries and pensions. In fact, the alternative could only be the reduction in the number of public employees by hundreds of thousands with immediate effect. To avoid disturbances, the security forces have been placed on alert in the whole peninsular. Even though the credit system is not in a risky situation at the moment, for the next two months, as a precautionary measure, it will be possible to withdraw a monthly amount of no more than 5,000 Euro from one’s own current account. The hypothesis of a “technical government”, led by the Governor of the Bank of Italy, Mario Draghi, to reassure international markets after two years of disarray in the State accounts, is being examined by the President of the Republic.”

(*) The public debt is almost 1,800 billion Euro.

Posted by Beppe Grillo at 10:04 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 07, 2009

70,000 shops without the fiscal shield

The fiscal shield is law
From January to June 2009, 36,000 shops have closed down. That’s 6,000 A MONTH. 200 a day. By the end of the year, the Confesercenti estimate there’ll be SEVENTY THOUSAND FEWER. Above all, the ones run by families. The big chains are hanging on. A prudent estimate, even taking account of the opening of new shops, is at least 200 thousand people without work this year. Shops are closing for the crisis, for the lack of optimism among the consumers, for the competition with the supermarkets and for taxes. It’s difficult to intervene on the first three points, however on the last point it’s possible. The shopkeepers need to insist on fiscal equality in front of the law. If the great tax dodgers pay 5% for the fiscal shield, then even retail sales should have a top tax rate of 5%. Otherwise, as Mavalà Ghedini says “the law is equal for everyone, but the application is different”. Butchers, stationers, greengrocers, grocers, delicatessens and bakers bring your taxes for the shops into line with the taxes for mafia capital. Follow the advice of a friend of mine from Reggio Emilia:
”You have talked about a tax strike. OK, listen to this. A friend was talking to me about it just an hour ago. His wife is a shopkeeper in Parma and she’s furious about the fiscal shield. A lady-made-senile-by-TV came into the shop and started reciting her script: “But have you seen the Annozero scandal? They’ll have to close down that programme, communists, assassins, poor Silvio … bla,bla"... She listened and said nothing until after the client had paid and then she said: “Signora, today I have decided. I’m not going to give you the receipt given that 300 billion euro of tax dodging, Berlusconi has amnestied. Thus now I too am going to do that. What do you say?” The customer-made-senile-by-TV was stunned – she was disoriented. She didn’t know what to say. … and she went out with her tail between her legs saying: “Oh, yes, perhaps you are right…”.
And if we were to organize a protest like this? SHOPKEEPERS who join up and display a sign like this:

PS This morning, 7 October, Radio24 interviewed Sonia Alfano and David Borrelli. Listen to the audio of the broadcast and take part in the survey.

PPS The competition called “Where were you 32 unfaithful employees?”, is continuing. It aims to find out where the opposition deputies were at the moment of the confidence vote. Participate in great numbers. The blog will keep track of your indications and it will publish them in the days to come, together with your real name or your nickname. Here’s the list: 24 PDminusL: Argentin, Binetti, Bucchino, Capodicasa, Carra, Codurelli, D'Antoni, Esposito, Farina, Fioroni, Gaione, Ginefra, Giovanelli, Grassi, La Forgia, Lanzillotta, Madia, Mastromauro, Melandri, Misiani, Pistelli, Pompili, Porta, Portas. 7 UDC: Bosi, Ciccanti, Drago, Libè, Pisacane, Ruggeri, Volontè. 1 IDV: Misiti.

Posted by Beppe Grillo at 06:18 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 06, 2009

The great custard pie of the fiscal shield

The PDminusL’s fiscal shield
The fiscal shield has had many fathers. Parties, banks, Confindustria, Trades unions, the President of the Republic, organised crime. Not one of them has raised his or her voice, not Ms Marcegaglia of the incinerators, not Luca Cordero di Montezemolo, not the “Triplice”, not the Italian Banking Association (ABI) not Morpheus. And we couldn’t expect the mafias to do that in their stead.
300 billion euro not declared to the tax authorities will come back into Italy. With a tax of 5%, it will be recycled in the Italian economy with the guarantee of anonymity. When it crosses the border, it will be the banks welcoming it. The bankers of the ethics of finance, including Passera and Profumo, will accept the mafia capital, from abroad to abroad, subtracted from taxes, the fruit of bankruptcy in their deposits. They refused the Tremorti bonds, but they will gladly accept the Mafia bonds.
Who realistically can have the availability of tens or hundreds of millions of Euro abroad unless it is the medium and big industrialists? Now, to finance their companies, in a moment of crisis, they need to get “clean” capital back into the country. For them, the fiscal shield is like manna from Heaven. The property owners who have run out of credit and yet have the cement flowing, need oxygen for their devastating activity on the territory. And they will have that, thanks to the Fiscal Shield. The silence of the Trades Unions is explained only with the hope of work, work, work. It doesn’t matter whether it’s from tax dodger’s capital or to do useless or damaging stuff. All with their hands in the custard pie, apart from the citizens who are obstinate enough to pay their taxes against their own interests. The returning capital will favour unfair competition, will make the honest companies go under, and in particular the small and medium enterprises that pay taxes, even the “presumed” taxes, even a year in advance. The amnestied tax dodger who pays 5%, can reinvest, push down prices, buy up companies. Anyone who pays 60% discount for cash, can just try to survive.
Finally, there’s a great feeling of discomfort for those who stubbornly cultivate the pleasure of honesty and perhaps, they can no longer allow themselves to do so. You need to have great strength of character to pay taxes. To see tax dodgers rewarded. The crafty ones with the 4x4 and the boat and your company collapsed or you sacked. To pay the bills that are ever more numerous and dearer. The last will be the first, perhaps. But the honest ones in Italy are certainly the last. The stupid ones, the idiots. The ones who have been robbed even of the pride of doing their duty.

PS The competition called “Where were you 32 unfaithful employees?”, is continuing. It aims to find out where the opposition deputies were at the moment of the confidence vote. Participate in great numbers. The blog will keep track of your indications and it will publish them in the days to come, together with your real name or your nickname. Here’s the list: 24 PDminusL: Argentin, Binetti, Bucchino, Capodicasa, Carra, Codurelli, D'Antoni, Esposito, Farina, Fioroni, Gaione, Ginefra, Giovanelli, Grassi, La Forgia, Lanzillotta, Madia, Mastromauro, Melandri, Misiani, Pistelli, Pompili, Porta, Portas. 7 UDC: Bosi, Ciccanti, Drago, Libè, Pisacane, Ruggeri, Volontè. 1 IDV: Misiti.

Posted by Beppe Grillo at 08:31 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

October 01, 2009

It’s the Opposition that makes the government filthy

Massimo D'Alema and the fiscal shield
300 BILLION EURO will return to Italy protected by Tremorti ‘s fiscal shield. The State will gain 5% for the amnesty. Money that nothing is known about, in all probability never taxed. To whom does this capital belong? Do you know any labourer, any office worker, electrician, mechanic, hairdresser with tens of millions in a tax haven? Basically, do you know any WORKER who will get an advantage from Tremorti’s shield? Anyone who pays taxes at 15/27/35/50% has the right to know the full names of those who export capital and the origins of the loot. We want the list published in the newspapers by law, anything but the impunity and the anonymity.
Tremorti has stated: “I don’t believe that the criminal world will make use of this provision. Criminal capital is either in Italy and perfectly well “laundered” or they will continue their activity abroad”. “I DON’T BELIEVE”? A Minister of the Economy who does not believe that out of the 300 billion there is mafia capital, from bankrupts, from complete tax dodgers, the product of money laundering, of dirty money? But who does who think he is bullshitting? This State amnesty is, until proved otherwise, an amnesty for the mafia.
Franceschini Boccon del Prete” said earlier in Parliament that the fiscal shield is: “a slap in the face for all Italians who honestly pay their taxes”. From the words to the actions. The so-called Opposition, acting on the suggestion of Italia dei Valori, asked for the vote in the Lower House on the unconstitutionality of the fiscal shield. If the 280 Deputies of the PD, IDV and UDC had been present ,the Fiscal Shield would have been blocked. But they were in the bar, the restaurant, perhaps at Arcore, to publish a book with Mondadori or getting interviewed in the early evening on “Canale 5”. Perhaps out whoring with Tar Head. Perhaps on an outing with Tarantini. Anywhere but not in the House. 59 Deputies of the PDminusL were not there, together with 8 from the UDC and 2 from IDV. Of the PDminusL, the two champions of the Primaries, Franceschini and Bersani, were absent, together with D'Alema, the psycho-dwarf’s best friend. This is the “really harsh Opposition”. With these characters, mates and accomplices, the psycho-dwarf will last even after his embalming. It’s the Opposition that makes the government filthy. They will never give up (but is it in their interests?). Neither will we.

Posted by Beppe Grillo at 10:00 AM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

September 06, 2009

To have or not to have

Pawl Hawken: the unstoppable multitude

To have or not to have. We are working longer than the workers did at the time of the Pharaohs. For thirty years, forty years or even fifty years. The pensionable age is moving ever further away, to the point where soon it will coincide with the date of our death. Earning a salary is increasingly becoming the sole objective of work. It is no longer important for work to be useful or to have some sort of meaning for society or for the person doing it. The purpose of a business is usually to show a profit. Money that is useful in order to buy useless goods, produced by people who equally perform useless jobs. In order to make useless goods useful and increase the salivation level of the consumers, we invented the advertising industry. A massive deception, a kind of self-hypnosis for profit.
We have lost all sense of reason and communal purpose. We are like a load of laundry that has been washed and re-washed in a washing machine whose programme has gone haywire. Information and advertising, which at one time were two separate things, have now become one, merged into an obscene entity that is everywhere and justifies everything. The destruction of the planet, the elimination of time (no one has time for anything these days...), the loss of all meaning, the total lack of any values other than financial one. We have lengthened our life span only to find that we can no longer afford to live so long, because we are too busy producing. Having, having has become our drug of choice and we work in order to have. We have transformed our world and ourselves into a GDP, into perishable goods. We have everything, yet we no longer have anything.
In a society that is based on production for its own sake and at all costs, anyone that loses his/her job becomes nothing more than a dead weight. He/she is out of the game. In order to survive, one must have a job, any job will do. Work is progress, work is the future. Progress, instead, should mean a reduction in the amount of work. The elimination of unnecessary work. Work for everyone, but only if the work is useful and in a reasonable quantity.
The damnation of work is the “other” side, a mirror image, namely the social parasites. Those people that don’t work, thanks to the useless work of other people. They are merely devourers of human and environmental resources. They don’t have a job as such, but they manipulate and own the capital, often huge amounts of capital. They are the ones in control of the wheel within which the often unwitting workers turn. Social inequality is what makes useless work become essential. Social solidarity and the equitable distribution of resources would spell the end for production for production’s sake, as well as for the financial parasites. What sense is there for any Country, such as Italy for example, to have millions of people living below the breadline and millions more unemployed, while hundreds of thousands of other people are inordinately wealthy? What does it mean to “live” in the same Country for the tax evaders and for the temporary workers? Poverty is the raw material for consensus for all regimes. A wealth threshold and a poverty threshold must be established, neither of which may be exceeded. To have or not to have.

Posted by Beppe Grillo at 07:57 AM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

August 13, 2009

Politics and shopping

Bilanci di giustizia
The revolution is done with shopping. That’s what the priests say. But less, but “just”. Don’t waste. If you do that you will feel better. For example, you can use less detergent, drink fresh milk from the distributor, eat non-imported seasonal food. You will save at least 16%. The rules followed by the families in don Gianni Fazzini’s community of 1200 families are pure common sense and as well as producing a saving, they save time as well. They are families who are doing politics with their shopping and every month they are publishing their family budget. In the future, in the secret of the confessional, anyone who is polluting, wasting, is destroying by what they are buying, will receive absolution only if they sign up to don Gianni Fazzini’s “Bilanci di giustizia” {weighing up justice}. O Lord! Give us this day our daily (just) shopping!

”I am don Gianni Fazzini. I am a priest from Venice and for a few years I have been following Beppe Grillo. Today I would like to use the blog to tell you some good news. In Italy, there are 1200 families who for some time now, have been rethinking how they are doing their spending. And they are freeing their own heads from advertising and from special offers and they are asking what is really necessary for them and what is right that they buy.
These families are connected into a network. It’s called “Bilanci di giustizia”. They are very picky. Every month they send us their family budget and they tell us what spending they were able to do by thinking about it.
Just recently, we have finally analysed all their monthly records and we can give you some figures that I feel are very interesting. These families have been able to change the way they consume and to do this with accuracy and awareness, by 31%. That’s 31% of all their spending. And by doing this they have achieved two results that I feel are very important. One is that – they say they have improved the quality of their lives. We went to Germany and we got some help from the Wuppertal Institute. There, they told us that in order to measure the quality of life, the safest way is this: find out how much time a person has to do the things that they feel are the most important. And so we have used this indicator to find out. OK, on a scale of one to seven, the majority of the families found that they were landing up between five and six. We also asked them about their own views on their quality of life. Here too they ended up between five and six.
If we think about what we buy. If we are questioning whether by buying a certain thing we are voting for the one who is working in a correct way, looking after the environment and paying those who work in a just way, then we too are better off.
By putting this mechanism into action, these families have saved 16% on the same statistical social class of the average Italian.
All this makes us say that a step to gain freedom and for a true political action, can really start from our day-to-day spending.
These families will all come together on 27 to 31 August in Oropa in the province of Biella. They have given the event an interesting title: “Taste the beauty and construct the hope”. You can go onto the site They you will find all the information and of course you will find the figures that I have given you but in more detail and selected.
Thank you. If you too try doing your shopping with thoughtfulness, you’ll see that you’ll feel better. “

Posted by Beppe Grillo at 07:17 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 25, 2009

The unsustainable cost of a peach

Roadside vegetable gardens in Milan

There are normally only two kinds of people interested in a peach. Those that grow the fruit and those that eat it. The farmer receives 10 cents per kilogram for his fruit but it costs him about 45 cents to produce. The consumer pays two Euro for the same kilogram of peaches. This raises an interesting question, namely, who is it that has stolen our peaches and is driving our agriculture industry into the ground? Here is a long, desperate letter from a farmer from the Emilia Romagna region.

"Dear Beppe,
My name is Samuele Bertuzzi, I am 27 years old and I live in a small village near Imola. I am writing to you to explain what is happening in the world that I work in, a world that my family, my father and my grandparents always believed in, namely agriculture, the fruits of the land. I live in Romagna, where there are a number of major farming companies producing fruit such as apricots, peaches, nectarines, kiwis and grapes for making wine. The fruit growing industry in Italy is currently going through a very rough patch. The growers are being paid ridiculous prices for their fruit, around 8-10 cents per Kg (Source: Bologna Chamber of Commerce) for top grade peaches and nectarines, as against an average production cost of around 40/45 cents per Kg. This notwithstanding, the fruit is being sold in the shops at around two Euro per Kg or more. It is possible to find lower prices, but this is only during special promotions on lower grade fruit and then only for a few days at a time. 70% of our fruit is sold abroad (mainly Germany but also England, Austria, Switzerland, Belgium and Eastern Europe) where the prices being charged are just as incredible. A friend of mine who lives in London tells me that in one of the Tesco stores four peaches are being sold for 1 Pound (four peaches weigh about 500g, therefore, the cost is two Pounds per Kg or equivalent to 2.32€/Kg). At the end of the day, the effect of the production cost on the final selling price to the consumer is ridiculous: imagine, 10 cents as against a selling price of 2€ is equivalent to only 5%! The packaging and distribution of the peaches alone costs more than that! It is absolutely unbelievable that no one says anything about this! When they have to announce a price increase, the first thing that they show on TV are the beautiful market stalls laden with fruit and vegetables because this makes a good impression, but no one says anything about what goes on behind the scenes.
I want to explain to you very briefly how the fruit production “supply chain” works. The main player is the grower, the party that produces the goods, the fruit or the vegetables in question. What we’re talking about here is fruit, because that’s what I know the most about. The grower produces the fruit, which takes him a year to do, and then he harvests his crop over a three-month period (from June through to the end of August in the Romagna region). A lot of work goes into producing the crop, including pruning, soil treatment, fertilising, pest control, etc, with the grower having to fund the process up-front. The grower is essentially a businessman who owns a piece of land and has to make certain business decisions, just like any other businessman. Once the fruit has been harvested, it is time for it to be sold on to people for whom the fruit is the raw material for their business. This is normally a fruit and vegetable warehouse (either a privately owned company or a co-operative) who then stores, refrigerates, processes, packages and sells the end product.
The system that has been created over the past 20 years means that when the grower sells his produce to the warehouse, there is no real sale as such, one involving any negotiation on the pricing, but simply a handover. The grower delivers his products to the warehouse at a price that will only be set at the end of the season once the warehouse knows precisely what he has received from product sales, less his expenses. In other words, the grower receives a set price. He can’t set the price and he sells his product at a price that is only determined at the end of the season.
Continuing along the supply chain, the warehouse processes the fruit, packages it and sells it on to the importer. For negotiation purposes, the importer often utilises the services of a intermediary agency, a party that receives its orders from the importer and sources the product from the Italian warehouses. These are people that ONLY shuffle papers. They don’t even see the fruit that they are sourcing because it goes directly from the Italian warehouse to the loading platform. In many cases even the importer is little more than yet another agent between the foreign distributor and the Italian agency! The fruit arrives at the loading platform where it is checked, re-processed if necessary and then delivered to the sales outlets. Here too there are often other intermediaries that do nothing other than shuffle papers. At the end of the supply chain, the parties that set the price are the final sellers of the product: in the vast majority of cases these are the members of the Wholesale Distribution Network (the Department Stores) which in Italy include chains such as Coop, Esselunga, Auchan, Conad; in Germany, Lidl, Metro, Edeka, Aldi and Tengelmann; in England, Tesco and Sainsbury. The Department Stores establishes the price, which then cascades back down the supply chain, with each party in the chain getting their share of the income to cover their costs, but in the opposite direction taken by the product in the first place and without any TRANSPARENCY whatsoever. The last two parties are the packaging warehouse and the farm, which should actually be the main role players since they are the original producers! The warehouse receives an average price of 0.60€ for peaches and nectarines, from which they deduct their costs and WHATEVER IS LEFT OVER IS PAID OUT TO THE GROWERS!
The farmers are in a position where they know what it will cost them to produce the goods, but not how much they will receive. Above all, they will receive a price that is SET BY SOMEONE ELSE and one that doesn’t even cover 20% of their production costs. This doesn’t even take into account the fact that the farmer is the one that carries all the risks posed by weather conditions, such as hailstorms, excessive rain, flooding of fields and wind damage. On top of it all, at the time of harvest, the farmer cannot afford to leave the fruit on the trees since he has already incurred 80% of the production costs. I conclude by saying that not even the non-profit and welfare associations are interested in taking the fruit, even though there are entire populations without any food!
Beppe, I ask you please to give us some exposure on your Blog because no one else is willing to say anything about this problem. No articles in any newspapers, no television reports, no radio programmes, no one says anything because agriculture does not qualify as news and, in Italy, AGRICULTURE MEANS NOTHING, even though our industry represents 15% of the Country’s GDP! Thousands of farming enterprises are in difficulty (perhaps the ones that are feeling the effects of the crisis more than any others), people, families that believe in what they are doing, in the fruits of the land, that are “dying”, abandoned by everyone. Not even the politicians are raising a finger to help. All they can talk about are the banks and CONFINDUSTRIA, but as far as they are concerned the farming enterprises don’t even exist, while the local politicians, lost in their bureaucratic quibbles, do absolutely nothing for us. Dear Beppe, we are dying, this kind of agriculture is busy dying out and the fields will soon become like stretches of desert, unkempt land, abandoned, replaced by parking areas and hypermarkets selling fruit that has travelled thousands of kilometres and produced more CO2, products that are polluted, poor quality and produced at low cost, often via the exploitation of manpower that will only make certain people rich. All that will be left for the farmers that have left the land is to go and pack fruit and vegetables on supermarket shelves or direct the traffic in the parking areas that now cover their former fields!
Dear Beppe, I am pleading with you to dedicate some space on your Blog to our industry that is in serious difficulty and forgotten by everyone, so that we don’t also simply give up! Regards." Samuele Bertuzzi

Posted by Beppe Grillo at 08:36 PM in Economics | Comments (6) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 24, 2009

The real-estate bonfire

Images of the credit crisis

The strategy for coming out of the crisis keeps coming back to the same thing, namely construction, construction, and more construction. The construction of another 100,000 new apartments in an Italy that has already been destroyed by concrete is an act of economic dementia, even more so than environmental dementia. Who stands to benefit from all this construction of buildings in a Country that is busy relegating its green areas to the Apennines and the Alps? There are houses standing empty everywhere. Take a walk through any big city and you will see that right alongside these new residential blocks that are devastating the city centres and the suburbs, there are entire buildings of offices and apartments available for sale or for rent. Why is it necessary to build more and more? Italy is full of second, third and fourth homes located in (previously) marvellous areas. Homes that stand empty, with shutters closed, perhaps rented out for one month per year, if that. Construction everywhere, on the sand dunes of Sardinia and on the meadows of mountain villages. What is the REAL economic value of these homes?
The environmental cost of constructing a house that is destined to remain empty is huge. To build when there is no real need for accommodation but purely for reasons of potential speculation is a crime. Italian land belongs to the Italians, not to the property development companies or the banks that finance them with our money, nor to any government lobby group. If any of these parties profit from the land, then the minority shareholders of small building companies listed on the stock exchange, such as "Risanamento" for example, lose everything. “Risanamento” is a spectacular name because its share price plummeted by 43,18% in 2009 and the two previous years, from 3.60 Euro down to 0.11. The shares are worth 34 times less than their peak value back in 2007. A name that sounds like something suggested by Tremorti.
Risanamento is a large Group that enjoyed the support of the politicians and the banks that granted it loans upon loans. The money came from the banks’ customers. The very same banks that reject applications for small overdraft facilities and loans from small companies while granting lines of credit to a company with THREE billion Euro of debt and is heading for bankruptcy. What banks, you ask? Unicredit, MPS, IntesaSanPaolo, Banco Popolare..
The founder of “Risanamento” is a man called Luigi Zunino. An individual that is much loved by the politicians and that is involved in various areas deemed to be essential for the EXPO 2015. He is responsible for the failure of the residential area of Santa Giulia and the "rehabilitation" of the former Falck premises in Sesto San Giovanni. “Risanamento’s” last operating profit dates back to 2005. In Europe, property development companies have an average debt that is equivalent to 50-65% of their assets. In 2008, “Risanamento’s” debt amounted to 85% of its assets.
In order to avoid losing any of the previously granted loans, for which the senior executives should be fired, the banks are about to grant “Risanamento” another 250 million Euro of loans. And so millions and billions of Euro of our savings go up in smoke. All on the great real-estate bonfire. Where has Consob been hiding in the past few years? Were they even aware of this listed company called “Risanamento”? Mr. Cardia, yes I’m talking to you! The real estate bubble will also burst in Italy, it’s only a matter of time so fasten your seatbelts.

Posted by Beppe Grillo at 07:17 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

July 05, 2009

Mafia Pty Ltd

Mafia Pty Ltd.

One of the Republic's Ministers, Minister Lunardi, once said that we have to learn to live with the Mafia. But in order to live with something you first have to establish exactly what it is. What is today’s Mafia all about? How many parliamentarians, mayors and town councillors do they have in their pockets? The various Mafia groups arrange to have their own people democratically elected to Parliament. They are sitting on the Board of Directors of the banks, the major industrial companies and the real estate firms. Wherever there is an opportunity for laundering hundreds of billions of Euro, they are there. In a single year, the Italian Mafia groups generate a combined turnover of 130 billion Euro (2003 estimate). 70% of this figure is straight profit and they are in a position to re-invest almost 100 billion Euro per year. They can buy whatever and whomever they wish. The life and death of a man. Convert their money into outwardly respectable business enterprises. The Italian Mafia’s GDP is greater than that of many of the medium size Countries around the world. It is greater than that of Croatia or Rumania. The Mafia is one of the largest and most secure employers in Southern Italy (they always pay). Thanks directly or indirectly to the Mafia, some 27% of the residents of Calabria, 12% of the residents of Campania and 10% of the residents of Sicily (*) manage to make a living. When you have no other option, the one that provides your daily bread automatically becomes your boss. The Mafia is not only the most important business, but also the largest employer in the South of Italy. The turnover generated by the Mafia groups must be added to the turnover generated by their investments via their money laundering activities. In the past decade, the Mafia’s total profits have been in the region of 1,000 billion Euro. What kind of yield does 1,000 billion Euro of laundered money provide in political terms, financial terms and in terms of Government influence? What we need to find out is whether or not there is any longer any distinction whatsoever between the Mafia and the Sate and between the “clean” economy and the Mafia economy. To establish whether there is still such a thing as a “clean” economy and whether or not a Country’s economy is still able to survive without the influx of Mafia capital. Whether it is the State that has to live with the Mafia or the Mafia that must live with the State. Whether the State has become a Mafia entity, whether the Mafia groups have become parastatal and protectors of the system that has been set up. The truncheon hailed as a hero on a par with Borsellino in the Panthoen of the Homeland. Andreotti, convicted criminal and senator for life for Mafia association and Government activities. Money is completely undemocratic. Those who have it control the capitalist democracies and now the Mafia groups have the money. We have to ask ourselves whether there is anything left that can still be classified as non-Mafia and whether living with the Mafia has become a process of slow integration that dilutes and eventually swallows up absolutely everything and everyone.

(*) Data drawn from the book entitled "Mafia Pulita" (The Clean Mafia), published by Longanesi

Ps: the buoys are red. I repeat: the buoys are red.

Posted by Beppe Grillo at 05:50 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

June 12, 2009

Beppe Scienza and the pension fund ripoff

Beppe Scienza e la fregatura dei fondi pensione

Sounding surprised, the newspapers report that 2008 was a black year for pension funds, which lost almost a quarter of their value. I experienced a kind of déjà-vu and decided to ask Beppe Scienza to explain to this Blog precisely what happened.

"Dear Beppe,
Sooner or later, the chickens always come home to roost. As a matter of fact, it is now official that in 2008, the stock market-based pension funds watched as 24,5% of the money entrusted to them went up in smoke, an additional loss to those of 2007. Even generally speaking, the voluntary retirement provisions fared worse than did the company held Severance Payment Provisions (TFR).

So you can take pride in the fact that you gave the Italians some good advice when they were about to make that crucial choice. As a matter of fact, just two years ago, when I introduced my book entitled “La pensione tradita” (Betrayed Pensions), you told the people outright that they should rather leave their severance money in the company provisions.
Those that took your advice are now as happy as larks. They have not lost a single Euro and their benefits increase day by day. In fact, the TFR is the peak of security.
Those who were arguing against the TFR at the time were an incestuous bunch: government and opposition politicians, trade unions and employer associations, bankers’ allies, insurers and fund managers. They were backed by a bunch of economists, most of whom had some sort of conflicts of interest: Marcello Messori, Riccardo Cesari, Elsa Fornero, etc.
The financial journalists were quick to obey the orders they received, reiterating like parrots that people should hurry up and move their benefit provisions to the voluntary pension funds. I only remember two people who in all honesty defended the TFR, and thus the interests of the workers: Giuseppe Altamore of “Famiglia Cristiana” and Oscar Giannino of “Libero Mercato”.
But there is yet more bad news: one of the historical objectives of the trades union has always been to ensure “equal pay for equal work”. Well, the trade union federations suddenly agreed to accept a lower rate of pay for those workers who chose to keep their TFR. They refused to play ball and so they had to be punished by losing the so-called employer’s contribution, which is a double-edged sword in any event.
But the battle has not yet been won, because there are a number of waiting traps at every step. To find out more about these, feel free to visit my website at the Turin University’s Mathematics Department.
The banks, the Post Office itself and the financial consultants continue to sell the people life insurance policies, open pension funds and individual pension plans (pips). These are all further ways to lose money, even for those who kept their TFR.
As a matter of fact, the only way to ensure financial security for your old age is to stick to one simple rule. Saving money, definitely, but avoiding any kind of pension product. Furthermore, don’t reconsider leaving your severance benefits in the TFR. The advice given two years ago is still valid to this very day.
Until next time … and we hope that things will get better" Beppe Scienza

Posted by Beppe Grillo at 07:47 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 10, 2009

Eight million traffic lights

Eight million traffic lights
The crisis no longer exists and if it existed it wasn’t a true crisis. Just a tiny crisis. All thanks to our government, to Italian banks, to “Noemi boy” and to minister Tremorti.
The unemployed, those laid off, the business people who have closed up shop, the creditors that are no longer getting their invoices paid not even 240 days late, are Italians who are mistaken. Who are not sufficiently committed. They are folk, perhaps scum, who form a part of the tens of thousands of precarious workers in the private sector who have been allowed to stay at home. Or of the 60,000 precarious workers in the public administration who will be sacked starting from 01 July 2009, and the up to 120 thousand in 2010 and the more than 200 thousand in 2011. Or of the hundreds of thousands of laid-off workers still being paid, but not for much longer, from a special fund that has grown by 864% in a year. Or of the millions of unemployed whose number is increasing in 2009, and that will continue to go up in 2010 as reported by the European Commission.
Why is the Italy boat not sinking yet? The reply is simple: because the Public Debt is going up. They are getting us into debt. We have reached 1,700 billion euro. The State is paying about 80 billion a year in interest. There’s a threshold before the collapse, but we haven’t got there yet. Meanwhile, what is needed by the State has grown by 17 billion euro in the first three months of 2009: 48 billion euro compared to 31 billion in 2008. The expenditure is going up and the money coming in, is going down. The tax authorities have taken in 4 billion euro less in the first two months of the year. The waste in the public administration is today’s topic. The Region of Sicily will take on 500 extra directors. One for every 8.4 office workers. Are we men or directors?
The unhappy decrease of the GDP continues regardless. Now we are at -4.4% compared to 2008. Tremorti is optimistic. He estimates that there will be a slight worsening of a few decimal points in the annual position. However, as everyone knows, including him, it will be much worse. According to Tremorti we will start to pick up in 2010.

They will never give up (but is it in their interests?). Neither will we.

Posted by Beppe Grillo at 07:14 PM in Economics | Comments (2) | Comments in Italian (translated) | Write | Sign up | Send to a friend

May 08, 2009

Marchionne, the Napoleon of the runabouts

Marchionne Napoleone

By 2011 there will be a total of five/six motorcar manufacturers worldwide. The market is becoming ever smaller and the only manufacturers that will be able to survive (but for how long?) are those that merge with each other. This is the motor vehicle industry’s equivalent of Highlander, where at the end of it all, only one manufacturer will remain standing (or perhaps none). The collapse of the motor industry is historic, systemic. It has nothing to do with the current crisis because there has been an ongoing global drop in sales for the past decade. In 2009, the auto industry has shrunk by one third in the United States and by one quarter in Europe. The value of their shares on the Stock Exchange has plummeted. The shares of Fiat run by Marchionne, the Napoleon of the runabouts, have dropped in value from 17.702 Euro to 7.470. The State aid granted to the motor manufacturers is much like the subsidies paid to the press, in other words money wasted on trying to keep economic zombies alive. Fiat now wants to merge with Chrysler, Saab and Opel. In Italy, these mergers are held up as a triumph. One of the first effects of mergers is the restructuring exercise. From five factories down to two, from tens of thousands of employees down to just a few thousand. That’s what they call efficiency. Adjusting productive resources depending on market demand. Perhaps Marchionne doesn’t have any choice, but with this move he is safeguarding and perhaps even increasing, above all, his own salary. All in all a very respectable outcome.
Marchionne has hinted at "a gradual reduction in production capacity". In essence, a gentle euthanasia of factories and workers. Does it make any sense at all to invest public money in order to simply dismiss, reduce and close down? Never again will the motor industry go back to being what it used to be in the past. We are the real investors, not the Agnelli family. We citizens, with out taxes converted into national and European subsidies granted to companies with nonexistent development prospects. The motorcar belongs to the past. Renewable energy, the Internet and access to knowledge and environmentally friendly public transport are the future. Do we really want to invest in the manufacture of hundreds of millions more motorcars? Is this what the people who govern us believe to be development? Every Euro spent on the economy by the State must go towards creating new jobs and not towards yet another dismissal.

Posted by Beppe Grillo at 08:26 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 25, 2009

European Parliament: Loretta Napoleoni

Parlamento Europeo - Loretta Napoleoni (1 aprile 2009)

In the absence of cocaine, the GDPs of many western countries would collapse totally. The organised crime syndicates invest hundreds of billions of Euro of cocaine revenues each year into real estate, shares and companies. Cocaine is a driving force for the economy, but equally the economy is a driving force for cocaine. The cash crisis has had no effect on the Mafia groups, who are now able to go on a global shopping spree at bargain-basement prices thanks to the current financial crisis. He who controls the capital controls society. But who controls the controller of the capital? Financial systems and terrorism expert Loretta Napoleoni appeared alongside me as speaker at the European Parliament in Brussels on the first of April this year.

Text of the address
Financial Fools' Day

Il Patriot Act and money laundering

The alliance between the Columbian drug traffickers and the "ndrangheta"

A gang of delinquents

Financial Fools' Day

"Let me begin by saying that if you were feeling a little depressed up to now, after my address you will be feeling totally flat!
Today is a special day, because in London, where anti-capitalism demonstrations have been going on all day, and The City in particular, where the majority of the demonstrations have been well attended, today has been named Financial Fools' Day, or the April Fool’s day of the Financial World.
I think that this is quite an amusing way to describe the people’s anger and desperation regarding an economic crisis that was created by the banks, not only the Italian banks unfortunately, but also by other banks around the world, an epic crisis that no one seems to be able to handle in the first place. The members of the G20 will be meeting tomorrow in the hope that, in those few hours during which they will meet and take lots of photographs, they will be able to resolve all of the world’s problems, something that is highly unlikely to happen, and somehow these demonstrations in London are telling us that people are sick and tired of all these stories and no longer believe them.
I am an economist by profession and I can assure you that this is not a good time to be in this profession. When I deliver these addresses, many people expect me to haul out a turban and a crystal ball, because the truth is that economics and predicting the future are seen as one and the same. So today I thought that, instead of talking about the future, I would rather tell you a story about the past because I believe that in some way history must be our guide. This is something that we often forget and we have, in fact, completely lost our historic memory.
I would like to tell you about the phenomenon of economic interdependence, about how a piece of legislation introduced in one particular Country, and here we are talking specifically about the Patriot Act, which was a piece of legislation aimed at blocking the funding to terrorist organisations, eventually created a terrible and detrimental situation in other Countries, in this case Europe as a whole, turning Europe into the money laundering capital of the world, all of this between September 11 and now. This has occurred under our own eyes without us even realising what was going on.
The story begins with so-called deregulation, which the world leaders will be discussing tomorrow in the hope of reducing the damage done by deregulation. Many of the problems that you have heard about regarding the banks are precisely linked to deregulation, to the lack of legislation and to the fact that the banks were granted high levels of freedom with very little control by the State.
What happens with deregulation? In essence, it amounts to the removal of financial barriers and the removal of financial legislation and the controls between two countries. But who has benefited from this? As a matter of fact, it is not only organised crime that has benefited, but also the entire underground economy and the militant groups.
And so, the period between the early nineties and 2001 saw the establishment of a new economic system, which serves the interests of these groups, resulting in the establishment of joint ventures, such as the relationship that existed between the Columbian FARC movement and the drug traffickers, and associations are even formed by various militant groups and criminal organisations in order to exploit a number of financial channels in order to launder dirty money.
Prior to 11 September, the total value, the turnover, the GDP, or the cash production if you will, of this economic system amounted to some 1,500 billion Dollars, in other words approximately 5% of the global economy, almost all of it in Dollars, in fact about 90% of this cash production was in the form of Dollars. The Dollar was the currency of choice, specifically the 100 Dollar bill. Much of this flow of dirty money was laundered in the United States, in Dollars, via the financial havens in the Caribbean Islands.
In actual fact, this money laundering activity was beneficial for the American economy because it acted like a cash injection, which we discover when we analyse the data relating to the supply and demand for the American currency. From the mid-sixties through to 2001, a certain amount of new money, namely the bills printed annually by the Federal Reserve, was illegally taken out of circulation in America in suitcases or cardboard boxes that left the country in the form of boxes required for removals, etc, illegally in other words, and this money went towards satisfying the demand for cash, not only from criminal elements, but also from terrorist organisations and various other sectors of the underground economy.
In 2001, two thirds of the new supply of American currency, in other words the money printed in 2001, left the United States in this manner, a cash supply equivalent to 500 billion Dollars, which means that cash growth in the United States was lower, thereby increasing the internal demand for American currency and thus increasing the demand for money from outside the borders, which was satisfied by the currency provided by the criminals, the terrorists and the underground economy. However, there is yet another very interesting aspect of this inter-relationship, namely the fact that the Dollar is the global reserve currency, which means that the American Treasury can take out loans against the total number of Dollars in circulation worldwide, so the American national debt is equivalent to the number of Dollars in circulation in the entire world.

The Patriot Act and money laundering

Clearly then, if the underground economy demands an increasing number of Dollars every year, then the United States can get increasingly deeper in debt, but this only holds true for the United States because it is part of the so-called "seignorage".
This does not occur in Europe, because, for example, the European Central Bank cannot issue bonds for any sums in excess of the number of Euro in circulation in the EU member Countries, even though there may well be a large amount of Euros in circulation in the United States or even in Asia, Africa, etc, so the United States are in an ideal position, or rather they were in an ideal position until September 11, but why is this? Because the situation changed radically after September 11.
As you are all well aware, the Patriot Act, which is a piece of anti-terrorist legislation, was introduced in November 2001 and it is the financial implications of the Patriot Act that is of interest to us. The objective of the Patriot Act was to limit the amount of funding destined for terrorist groups, however, clearly this objective was never actually achieved because, in fact, it is legislation against money laundering, as proven by the following two basic elements of the Patriot Act: 1) it prohibits American banks and foreign banks registered in the United States from having any business dealings with any banking institutions based in the Caribbean tax havens.
The second interesting element is that the Patriot Act allows the financial authorities to monitor all Dollar transactions worldwide and if any American bank or foreign bank operating in the United States fails to notify the authorities about any suspicious transaction, said bank is deemed to be criminally liable and we know of some very interesting cases including not only "Lloyds Bank", which was one of the latest banks to be penalised and was forced to pay some significant fines, but also USB, etc. So what is actually going on? What is happening is that the Patriot Act was only introduced in the United States and is only applicable to the Dollar, so it has totally revolutionised the cash flows of the legal economy and the underground economy alike.
Let us firstly look at the legal cash flows. Clearly the international banks did not like this piece of legislation because, as we heard a little while ago, back in 2001, no one wanted any Patriot Act introduced in another country that would enable outsiders to scrutinise any dealings between a bank and its customers, so what happened next? What happened next was that the international banks advised their customers to abandon the Dollar Zone and switch to the Euro. The Euro was the new European currency that had just recently come into circulation, so it offered numerous opportunities and, above all, Europe did not have any legislation similar to the Patriot Act and indeed there were tax havens in existence in Europe that worked very well, with no one checking up on anything. Thus we see a flow of money away from the Dollar and into the Euro and it is very interesting to examine the correlation between the introduction of the Patriot Act, the start of the fall in the value of the Dollar and the beginning of a renaissance in the level of interest in Europe. A group of OECD economists did some research, looking for some correlation between the various data, which in essence revealed the following: the introduction of the Euro coincided with the end of era of the Dollar, but this does not relate solely to legal monetary flows and an important aspect of the switch to the Euro is also seen in the underground economy, where the criminal world found itself in a rather complex situation and began wondering where to go next. Money laundering was no longer possible in the United States and it was becoming increasingly difficult to repatriate their money, because the problem of money laundering is a twofold problem, namely, not only how to launder the money in the first place, but also how to get the proceeds of the criminal activities back into your hands. There were a number of potential schemes available, for example the “black pesos money exchange” scheme run by the Columbians, where the drug traffickers acted as veritable currency exchange agencies. How did the scheme actually work? Perhaps there was a Columbian businessman who wanted to go to the United States, without alerting the financial authorities that he would be taking money abroad and thereby having to pay taxes as well as having to convert the money at the official rate of exchange. He would go to one of these currency exchange agencies, hand over his Pesos and then, once he arrived in New York, someone would deliver a briefcase full of Dollars, which Dollars obviously originated from cocaine sales by the drug traffickers.

The alliance between the Columbian drug traffickers and the "ndrangheta"

The basic problem was actually a totally different one, namely that during the 90’s, thanks to globalisation, revenues from the sale of drugs had increased exponentially and the drug traffickers had to find new ways to launder these revenues on an industrial scale since the sums involved were enormous and I’m telling you that 80% of all money laundering is done by means of cash, so the “black pesos money exchange” scheme was physically unable to cope with this amount of money. It was at this point that an Italian emigrant to Columbia, a man by the name of Salvatore Mancuso, who had become the commander of the paramilitary unit of the AUC, had a brilliant idea and decided that the best thing to do would be to put his buddies in the “ndrangheta” in contact with the Columbian drug traffickers, and thus a fantastic alliance was born, in the sense that it represented a new start for the Columbians, and this is the truth!
Why a new start, you ask? Because it provided them with an opportunity to export cocaine to another continent, instead of simply a neighbouring continent that was rather limited in the sense that the cocaine simply moved from South to North into the United States. Now there was this new opportunity to bypass the restrictions imposed by the Patriot Act since Europe is a place where it is easy to launder money, as there is no legislation in place to control and punish these types of business activities.
So what happened next? A proper business is established to sell cocaine, where the cocaine exported from Columbia would initially arrive in Calabria and, from Calabria, the “ndrangheta” would proceed to distribute it via its own network, a network that it had built up for itself in Europe. Here we must pause for a moment to point out that all of this was only possible because the “ndrangheta” already had an existing European network, the only organisation with such a network at its disposal since neither the “Cosa nostra” nor the “Camorra” had any similar network in place. So the “ndragheta” had this widespread network, not only extending throughout Europe, but essentially worldwide, a network created by the dispersion of millions upon millions of people from Calabria who had moved abroad over the past 30/40 years as foreign immigrants, so the “ndrangheta” was not only in the right place at the right time, but also used its brains in that, instead of offering high-ticket services, they did the exact opposite, offering the drug traffickers a low-cost importation, sale and money laundering service through the network, because the network also included a number of attorneys, accountants and real estate agents who collected the money as soon as it came in and, thanks to the existence of the Euro, moved the funds from one Country to another, investing it in real estate because this network, working in conjunction with various real estate agencies, in essence launders money and generates profits, which are then legitimately repatriated to Columbia via the formal banking system.
The “ndrangheta” handles all of this for a 30% cut. In the United States, following the introduction of the Patriot Act, the laundering of drug revenues costs the drug traffickers around 60%, so the “ndragheta” offers a fantastic service. Furthermore, according to the available intelligence, the organisation is able to market the cocaine on the European market by selling it at a very low price, thereby competing with the so-called lighter drugs rather than with the more expensive drugs, and so we see that between 2001 and now there has been an exponential increase in the use of cocaine as the preferred recreational drug of the middle classes, so you see how easy it is? It is therefore true that all anyone needs is a brain and an established network. This is the current reality, namely, there are no laws and there are no controls in place. Just think that this money laundering is occurring via the real estate sector and it is thus very difficult to control because, for example, the Deeds Registry Office on the Costa del Sol has no way of communicating with the Deeds Registry Office in London, so they will never know whether the same company is busy making purchases in various locations in Europe, either simultaneously or at different times and, furthermore, there is no system in place to monitor the financial and cash transactions in Euro that may be taking place across European borders, there is no such thing!

A gang of delinquents

Therefore, the situation in Europe is currently ideal for the criminal element and that is why Europe has become the money laundering capital of the world. Now let’s examine the latest development before we all go home. The latest developments began in 2005. Demand for cocaine was increasing exponentially because the drug was cheap and fun, the “ndragheta” had done a marvellous job of marketing the drug and it was becoming increasingly difficult to keep up with the speed required in transporting the drugs, so what was decided? They decided to utilise Guinea Bissau as a trans-shipment point, the latter being a final destination point from where the drugs generally distributed. A smart idea because Guinea Bissau is easily reached within 3 to 4 hours by means of light aircraft and or tourist aircraft from Columbia or from Venezuela, because a lot of these drugs come through Venezuela. And so Guinea Bissau becomes a drug trafficking country and is promptly colonised by the drug traffickers, who then organise warehouses where the incoming drugs arrive, are stored and where the European buyers arrive the same day, buy the drugs and take it back with them to Europe either by means of light aircraft or small boats.
The truth is that currently, all it takes is one week for the drugs to get from the Columbian producer to the consumer in the European disco, and the majority of this trade is controlled by criminal organisations linked to none other than the Italian “ndrangheta”.
So what is lesson to be learned from this story? I can see that you are looking very dejected. The fact is that we need to accept that there is an economic interdependence between the official economy and the underground economy and it is useless for us to attempt to deny this. Many of the products that you buy inevitably contribute to making some or other delinquent very wealthy, not only drugs, and that is a fact. So if we truly want to do something about it, if we want to block this trade and if we want to resolve the current economic crisis, because in reality this crisis was created by the gang of delinquents that are the bankers that have caused the problems we are currently facing, we must firstly accept the fact that this interdependence exists and that we can only get ahead by preventing further cross-contamination of our legal economy by the criminal and underground economy, otherwise the situation I have described will only deteriorate and we will increasingly become the victims!" Loretta Napoleoni

> Loretta Napoleoni’s latest book, entitled: "La Morsa".

Posted by Beppe Grillo at 11:03 AM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

April 04, 2009

The banks never pay


The demonstrators in the City of London smashed the windows of the Royal Bank of Scotland. From inside the bank, bank officials threw out some banknotes, hoping to calm down the crowd. Instead, it infuriated them even more. This gesture is somehow symbolic of the crisis itself. The banks have the money, they make the money and they can therefore give the money away. We are constantly being told that if the banks fail, then the entire system will fail. In other words, the banks are the system. They are immune to fraud. If their top managers steal, particularly in Italy, then they are rewarded. They are the guarantors of the funding granted to lobby groups, to the political parties and to Confindustria.
The bank thefts are always within the law. In Italy, there is no such thing as class action. How many of the banks would still be going if they had been obliged to reimburse all of the people defrauded by Parmalat and the Tango Bonds? The banks were well aware that the shares had lost all of their value and so, in order to get rid of them, they sold them to their customers, current account holders and investment funds right up until the day before the crash. The leading bankers knew all about the Argentine default and the Parmalat crash.
The banks are organisations with unlimited irresponsibility. Mediobanca, which is quoted on the Stock Exchange, is the case in point of the Italian financial system. The Bank’s President, Cesare Geronzi is under investigation for the Parmalat crash, for aggravated usury and for collusion in fraudulent bankruptcy. In the case of the Cirio crash, he is under investigation for fraud in terms of the issuing and distribution of Cirio bonds through Capitalia. In the case of the Italcase crash, he was found guilty of fraudulent bankruptcy and sentenced to one year and 8 months imprisonment, as well as being banned from holding directorships in any company for a period of two years. The Deputy President of Mediobanca, on the other hand, is none other than the Tronchetti of unhappiness. What a pair! Truly an added guarantee for the depositors, are’nt they?
The banks never pay, yet they always cash in. Italy is a nation founded on the power of the banks. In order to protect the interests of the Italian citizens, I will be publishing a list of “Wanted” Bank Managers. This list should appear on the homepage of the Ministry for the Economy and the ABI (Italian Bankers Association) websites. Everyone could then choose their preferred bank on the basis of the characteristics of its top managers. Fraud, extortion, bankruptcy and issuing worthless bonds. Isn’t it better to know beforehand how you will be losing your savings?
Joining me recently at the European Parliament was none other than Attorney Roberto Vassalle, the terror of the Italian banks against whom he has instituted hundreds of winning court cases. The time has come to ask yourself certain questions, such as: “Why is it that the people running the banks are millionaires while their customers are losing their money?” and “who are the real customers of these leading bankers?”
They may never give up (is it in their interests?), but neither will we.

Posted by Beppe Grillo at 02:59 PM in Economics | Comments (5) | Comments in Italian (translated) | Write | Sign up | Send to a friend

March 25, 2009

Africa sickness


In ten years in the global banking system, everything has changed. Apart from in Africa. In 1999 the American and British banks were dominating. Four of the top four positions for capitalisation. On the Stock Exchange, the American banks were worth about half the value of existing banks.

Today, in first, second and third positions there are the Chinese banks: Industrial & Commercial Bank of China, China Construction Bank and Bank of China. The American and British banks have lost two thirds of their value. New banking centres that before hardly existed have sprung up: Brazil, Canada, Russia, India, and Australia. The banks have expanded into every continent (except one), from a phenomenon that was mainly western and Anglo-Saxon to a planetary distribution.

Capital has arrived everywhere but not in Africa. A continent without capital but with enormous resources. Anyone with capital is buying up resources. But those who sell them stay with no capital and no resources. Where’s the trick? Africa has suffered colonialism, then the exploitation of its primary resources and now the expropriation of its territory. Korea and China do shopping for immense agricultural lands in Africa, the size of European States. The government of Madagascar went down after an attempted sale of part of its territory to Daewoo.
You can’t eat money. It’s a good that is not solid, metaphysical, that can be created from nothing. Money is created, resources are destroyed and Africa is a consumer good. There is a hypothesis that 30% of the planet’s mineral and metal reserves are in Africa. If up until now, from the African continent, there has been plundering of gold, diamonds, uranium, manganese, nickel and cobalt, in the future they will take maize, soya and wheat to keep the world from starving and leave the Africans to starve. Land is bought or leased thanks to a corrupt government. The local people work the land. The foreigners eat the produce. Anyone with land and water will live only if there’s a national bank in the area. You can’t eat capital but it is top class for starving your neighbour.
It is no longer necessary to line up the army at the border, it’s enough to have the capitalization of the national banks. To fight the world war, the toxic assets for export are worth more than atomic bombs. You introduce them to the foreign banks and the State fails just like has happened in Iceland, and as is about to happen in the Ukraine. Only capital can defend us from capital in a capitalist system. Perhaps it’s the moment to change the system. In Italy, we will eat cement, we are destroying our agriculture. In compensation we have no capital, just debts. We will die of hunger but with nuclear power stations, the Bridge over the Straits of Messina and an extra room. Do you want to have that satisfaction?

* Images comparing the concentration of the banking system 1999-2009 from The Financial Times.

Posted by Beppe Grillo at 07:20 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

March 03, 2009

Dying of starvation/1


Strip tease for precarious workers

Someone is knocking on the door. You open and everything changes. The letter saying you are sacked has arrived for you too. You are no longer one of the Modern Slaves kept alive by a paltry wage. And you are not even a candidate for a White Death who has a job anyway. Now you are one who is Starving to Death. You have the right to the “social card”. You are one of the new two or perhaps three millions of unemployed in 2009.
The moment of detachment, of walking out of the factory or of the company is a state of trance. Your brain is floating and everything is under discussion. Anyone who has lived through it or who is living through it, knows that it is like a tiny stroke. You feel as though you are lost In nothingness and you don’t know what to do. The day before, the gates of the factory were open and you talked with your companions about politics or about football. Then the company closes, without rhyme or reason and without warning anyone. You find yourself at 6 o’clock in the morning in front of the gates with your colleagues and with the bobbies. Not much conversation. Lots of truncheon blows.
If you are a precarious worker, you have no protection. If you are an employee you have the pay for those laid off for a few months. You are outside the system and you only understand that now. Unemployment is contagious. If a company closes then often their suppliers close down too. If the number of unemployed people goes up in one area, then shops and supermarkets close down there too. The unemployed person, the modern person who is dying of starvation, is a virus. Living in a land governed by the richest man, by the parliamentarians who are the most numerous and the most well paid, starting with the pensions to senators and deputies after two and a half years. In the city, he is surrounded by 4x4’s, by tax dodgers who defraud the State of 250 billion Euro a year, by employees of organised crime, the top company in the country for turnover. He’s not a politician, a tax dodger, a criminal, that’s why he is unemployed. He has lived in a separate world where the word “honesty” had a meaning.
I see dignified people asking for alms in the stations or pressing the telephone token buttons in the metro stations. A lady asked me for a few Euros. She hadn’t recognised me. She didn’t know she was taking to a person from Genoa, crikey! She told me she was hungry. She was not a non-European-Community-person, a clandestine, a Roma. She was Italian and she had no work. She was a new “dying of starvation” person.
Every day, the blog receives stories of new people who are dying of starvation, about how they lost their job. I have decided to collect these together into a book that I will publish in digital format that can be downloaded free from the blog.
Tell your stories and put a shine on your clogs.
They will never give up (but is it in their interests?). Neither will we.

Posted by Beppe Grillo at 07:41 PM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 26, 2009

Banks of the government and of robbery


The Great Flight

The banks and the regulatory authorities are the main ones responsible for the financial catastrophe. In the last few years, Where have the Bank of Italy, Consob, ABI, the Ministers of the Treasury been? People like Tremorti and Padoa Schioppa? Like Fazio and Draghi? Like Geronzi, Passera, and Profumo? The mayors who have invested the taxes of the citizens in derivatives? The financial analysts? The economic journalists? People like Cardia and Capuano? The rubbish shares, the futures without a future, the subprime sub-primes, the CDOs, the holes in the balance sheets, the banking liabilities without guarantees. Either these gentlemen knew everything and thus are criminals and should be prosecuted, or they are incompetents and should be sacked as soon as possible.
Renewal has to start with the pinnacle of finance. To get rid of the politicians and leave the bankers in place is of no use. The next time round, the ones who have control of the financial system will elect other figureheads, who are willing servants or are business partners.
To save the country that has been destroyed by the banks they are lending money to the banks without getting rid of those responsible. It’s an upside down world. They are using public money, the fruit of the taxes of the families to reward those who ravished the savings of the citizens. Without even asking for renewal, with Passera and Geronzi still in post with salaries of millions of Euros. Instead of taking a step back, they have taken two steps forward. The ones who are responsible are rewarded. Often the citizens have lost everything. If you are starving and you steal ham from a supermarket, they arrest you. If you throw millions of families into poverty you become President of Mediobanca
A collective clearing away is taking place
The banks control the newspapers, they are present in the Boards of Directors of the publishing groups. The financial tsunami is described as a supernatural event, something inevitable, something cosmic. The top brass in the banks are the victims of the situation not the ones responsible for it. In recent years, how much have the bankers gained in stock options thanks to the toxic shares? After the crisis, by how much have their salaries gone down? I think that it’s necessary to have a public discussion with data, names, position, illegal gains of those who have been at the top of the financial institutions and their journalist accomplices. Meanwhile, not a single Euro from the State to the banks.

Posted by Beppe Grillo at 08:54 PM in Economics | Comments (28) | Comments in Italian (translated) | Write | Sign up | Send to a friend

February 16, 2009

Tremorti and the New World Order


INNSE police charges: interview with a worker

Tremorti is going around Europe talking about the New World Order. The psycho-dwarf is also starting to develop a few worries about the economy. Ms Marcegaglia of the incinerators is announcing a poverty risk. Italy is producing ever less. The GDP was -0.9% in 2008. Italy is getting ever more into debt. The public debt is almost 1,700 billion euro. Since the beginning of the year, hundreds of thousands of precarious workers have silently lost their jobs. Technically they were not employees but “project workers”. With the termination of the pretend “project work”, which really was true continuous work, they are all at home without any social safety net thanks to the Maroni law labelled with Biagi’s name. The 2007 precarious worker has become the 2009 non-sacked person. Neither alive, nor dead, a social zombie.
Factories are endlessly closing amid the total indifference of the news media. Public solidarity is not bothered about the demonstrators. Instead the police baton is arriving relentlessly on top of the skull of the laid-off worker, of the unemployed worker, of the father of a family who raises his voice. Since August 2008 the Fiat factories at Pomigliano D’Arco have only been in operation for a few weeks and they risk closure. The protest finished in beatings last week on the motorway. It’s not the only one. There are dozens, however they are known only to the beaten and the beaters. On 9 February, in Milan, the workers at INNSE, where the factory has closed down after 9 years, were charged. One military guy for every pretty girl and a Bobby for every unemployed worker.
By now it’s simplistic to talk about the hooves of the bison. Every day from all over Italy, I’m getting appeals from workers in companies that are closing down. Tar Head is worrying about wiretapping and about doing electioneering in Sardinia while Italy is sinking. The islands of unemployment are still at the level of leopard spots, but by June they will all have joined up. The Bobbies will not be enough. They will have to ask for help from the United Nations soldiers. At the beginning of January, this year’s GDP was -1%, after a few weeks we have got to forecasts of -3%, the tax revenue will go down for the combined result of the closure of factories and the drop in consumption. Tremorti’s final lifesaver to be able to continue paying the salaries of the nearly 4 million public employees are the State bonds. With new issues and bonds that have fallen due, there are bonds worth hundreds of billions of euro on the market to cover State debts. However, together with our own, there will be thousands of billions of bonds put on sale by other States, States that are less indebted than we are and without the risk of defaulting. By now, Tremorti is in full delirium. If you interview him, he flees. When he’s talking to himself he talks about the New World Order. If there is no tsunami, I’ll eat my hat.

Posted by Beppe Grillo at 10:31 AM in Economics | Comments (4) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 22, 2009

Gambling Towns

The Jesi MeetUp and the derivatives that the town has invested in

Italian towns have something in common: 35 billion euro of investments in funds, bonds, derivatives, and other types of paper that have become trash. The debts of the Italian towns make Parmalat blanche and someone will have to pay. In recent years, towns have become financial speculators. They have used the taxes of the citizens to play on the Stock Market. The results are astounding.
The financial crisis has transformed the investments into debts. The towns had benefits at the start with advances obtained from the banks on the forecast of consistent gains and they find that they have money to pay back and the initial capital that has been wiped out. As far as I know the town functionaries are not financial experts and not even the citizen body has assigned them the facility of using their money to buy shares in Lehman Brothers or the Bank of Scotland. Basically our mayors have suddenly taken on the role of bankers and they have lost everything.
In 2008, Taranto, Catania, and Rome went bust and were saved by the State coffers. They are in the front ranks. The financial operations often have picturesque names with a clear reference to the town. In Venice there are some current investments called "Canaletto" and "Rialto". Certain towns have decided to take the banks to court. Milan has taken legal action against Deutsche Bank, JP Morgan Chase, UBS and Hypo Real Estate’s DEPFA. Basically they are accused of having deceived the town. Thus this is a shining example of “abuse of the vulnerable”
Moratti’s legal action could open up the way for a class action by all Italian savers who have lost their shirt in 2008 and who will lose their underpants in 2009. If the town has been swindled, so have all Italian investors. What’s true is that 35 billion is missing from the coffers of the towns. Who watches over the Gambling Towns?
The financial operations are usually started off by the mayors who don’t have to be accountable for that because , the paying out period for the investments and thus the potential (usually certain) for loss falls on the following administration. For example, Moratti ‘s financial debts are the offspring of the Albertini administration. Up until today, there has been a precarious equilibrium with ever riskier investments that covered the previous losses. Now the cork has popped with the world economic crisis.
We are left with the question: “Who watches over the Gambling Towns? The mayors cannot expose their towns to going bust by playing roulette with tax payers’ money. The strategy of the towns is to take the banks to court. The strategy of the citizens should be to take the mayors to court. Crikey. The debt of the towns is bigger than that of Parmalat and no one is saying anything. No one is worried.
They will never give up (but is it in their interests?). Neither will we.

Posted by Beppe Grillo at 08:10 PM in Economics | Comments (7) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 11, 2009

Catricalà is always the last to know

The Mapping of Power
Click on the image

Antonio Catricalà, the Head of the Competition and Market Supervisory Body has discovered something new. He has discovered that the Italian Stock Exchange is an orgy of conflict of interests in which the investor always plays the passive part. Directors on the Boards are present in 6/7/8 Boards, even for companies that are competing with each other. And they are always the same people. The control of the companies is done with Chinese boxes. Just 0.11% was enough for the unhappy Tronchetti to control Telecom Italia.
After a “finding out investigation”, Catricalà has discovered what is known even to the clandestines who have just disembarked at Lampedusa.
80% of the Italian finance groups have intertwined connections in the way of personnel and shares. They have staff working for one company who are also working for a competitor. For Catricalà, the solution is “heightened attention to corporate governance”. The solution is quite different. Close the Supervisory Body that costs a mountain of money to the Italian people and close down the Italian Stock Exchange. Let the Italian companies transfer to any European Stock Exchange where there are real controls. In Spain, and in the Netherlands, the conflict of interests does not exist and in Paris it relates only to 26.7%. With 80% our Stock Exchange is in the process of decomposition, a place to be avoided if you want to look after your own savings. If the anomaly of the Stock Exchange is sorted out, then that of politics is also resolved. The politicians are the chambermaids of the economic powers. If you want to really come to an understanding of what is happening on the Stock Exchange, use the "Mapping of Power. Type in the name of the company or the name of the Director and then start shivering. It would be better to entrust your investments to the Casalesi than to this lot. The current "Mapping of Power shows the intertwining between the Directors of the different companies. In the future it will be brought up to date with 2009 data and it will also show the share ownership and the Supervisors present on the Boards of Directors.
I’m not doing this for you, but for Catricalà, to help him move on with his work. To give him a hand, I will also go to Brussels to explain to Europe what the Italian Stock Exchange is. They won’t believe me, but I’ll try. They will never give up (but is it in their interests?). Neither will we.

PS: If you discover some conflict of interest, send an email to Catricalà.

Previous posts:
Power Mapping - 26 March 2007
Stock Exchange Orgy - 22 September 2006

Posted by Beppe Grillo at 06:23 PM in Economics | Comments (3) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 06, 2009

The Power of Debt

Tremonti and Bossi
Click on the image

For every 100 euro in taxes that we pay, 18 are interest on the Public Debt. The issue of the Public Debt is simple: if we don’t bother about the Debt, the Debt will bother us. It is bothering us every day, since its explosion that happened with the governments of Craxi and Andreotti. Cuts for schools, health, research. The decay of the Country. The Debt takes away resources from the services and from development to give it to politics and the lobbies. Italians pay taxes for interest payments on a colossal debt contracted by others in their name.
The year 2008 closed with about 1,700 billion euro in Debt. In the year 2009, we expect to pay interest payments of 80 billion. With 80 billion we would be able to restart the economy, quite a different kettle of fish from the “Social Card”. In the year 2009 there are State Bonds coming due for payment and on offer for between 2 and 300 billion euro. Who will buy them? Tremonti is reassuring us. Let him tell us whether there are takers, whether there are finance groups, or bankers who have already taken up the offer. Whether Mediaset has already ordered something, whether the patriots Colaninno and Tronchetti are already on the waiting list. Italy cannot wait until the last minute to find out. If necessary, let them start a collection among the public service employees. I know that you have already thought about that. Instead of 30% of the salary you could give an equivalent amount in State Bonds. It’s not a bad idea. Public employees buy the Public Debt by the mechanism by which the State pays public salaries. It’s a bit contorted but it could work.
The “spread”. Have you already heard this word? It sounds like a soft drink. Halfway between a “sprite” and a “chinotto”. The “spread” is the difference in the interest paid on State Bonds of one nation and that of another nation. In order to sell our State Bonds, we have to offer interest rates that are higher than those of others, like Germany, France, the Netherlands ... and the spread gets bigger. It gets bigger like the taxes do. It’s like a bit of elastic that is pulled. State Bonds, if bought in large quantities are insured. It’s insurance against the collapse (the “default”) of the State that issues them. The cost of Italy’s insurance is going crazy.
In 2008, the State Balance Sheet went into the red by 52.9 billion euro. The coupling Berlusconi/Tremonti is unbeatable in getting the Italians into debt. And it’s also in order to cover this 52.9 billion that it’s necessary to sell the BOT and CCT {government bonds}. The power of Debt is enormous. It’s a power that the Italians have left to the politicians. They can get us into debt without the need for financial cover, mortgage our future when they want, for how much they want. The Power of Debt must be taken from them before the Italy hayloft catches fire. Crikey. I’m running into the kitchen. I can smell the pong of Tremonti burning.

Posted by Beppe Grillo at 08:08 PM in Economics | Comments (1) | Comments in Italian (translated) | Write | Sign up | Send to a friend

January 02, 2009

Zero concessions

Recession? No, thank you!
Click on the picture

Once upon a time, long, long ago, people used to rob from the rich to give to the poor. Later on, this situation began to change drastically. People began robbing the poor to give to the rich. While it may be true that the poor have very little, but there are many of them. Very little, stolen from many people soon make up many billions of Euro in our Country. Privatising the profits and mutualising the losses is something that has long been the motto of unscrupulous businessmen, starting with Fiat’s use of unemployment benefits paid for by the taxpayer.
Today, many of the poor people have been made destitute. Robbing the poor to give to the rich has become a hopeless enterprise. The great entrepreneurs are however people that know what goes on in society and understand the problems facing the unemployed and the families with no income and no roof over their heads. They are not totally unaware of the increasing number of destitute people and they have now come up with a solution to the problem: take away from the almost poor to give to those dying of starvation. Speaking for the Veneto Region industrialists, Andrea Riello stated that: “Public sector employees could give up a small percentage of their earnings for the next year in order to donate it in the form of a temporary loan to replenish the welfare funds. A loan that would be repaid just as soon as there is an economic recovery.” PDwithoutanel deputy, industrialist and former President of Federmeccanica, Calearo, rushed to express support for Riello: “Riello’s provocation does make sense however …this contribution would be required from office bearers, managers and directors of companies … and Government employees, of whom there are many. However, it would be great if the politicians were to set the example.”
Our politicians are the highest paid in Europe and the majority of them are either sentenced offenders or under investigation. After only two and a half years in Parliament they will have earned the right to a full pension, doing a job for which they are being paid but are seldom if ever present since they in many cases hold down other jobs, thus earning double salaries. They are already setting an example. We can ask nothing more of them.
Mr. Riello, instead of promoting solidarity between Government employees and the private unemployed, I would begin with the public concessionaries. These are people that earn hundreds of millions and indeed billions of Euro each year on Government assets. Government concessions should mean zero profit for the concessionaries themselves. These assets belong to the Country’s citizens, both employed and unemployed. The running costs must be covered but any profits, if any profits are made, should accrue to the State. The motorways, telecommunication frequencies, radio and television broadcasting frequencies, water resources and waste disposal contracts should be renegotiated as zero concessions.
When do we start? Are you going to tell Minister Marcegaglia about the incinerators?
They may never give up (is it in their interest?), but neither will we.

Posted by Beppe Grillo at 04:33 PM in Economics | Comments (6) | Comments in Italian (translated) | Write | Sign up | Send to a friend

December 21, 2008

The boss' pay

Click on the picture

Millions of Euro of salaries with no results. You lead a company to bankruptcy, or almost. Companies such as Alitalia, the Government Railways or Telecom Italia and in return you receive bonuses to your heart’s content, stock options and remuneration worthy of a thousand and one nights. Who do you think paid the kingly salaries received by Cimoli, Buora, Catania, Tronchetti, Romiti and Ruggiero? The answer is easy. The minority shareholders, the 12,000 workers dismissed by Alitalia, the 9,000 people retrenched (so far) by Telecom, the taxpayers and the people on unemployment benefits. These managers are the new leeches on the economy, who feed on the blood of the companies and who never go down with the company. They are recycled by the system into other companies. This is the Apex of the Economy. If you follow orders and never rat out, then you will be rewarded. A closed circle where no one ever speaks out, no one ever hears anything, no one ever sees anything and, above all, no one ever names any names.
The unemployed family man returns home, looks at his kids who have no future and then sees those that caused the company to fail appearing on the television, showered with adulation, cosseted and with a million-Euro glint in their eyes. The bison’s hooves are deadly and perhaps it would be better to avoid being in their path next spring.

Text of the interview with the authors of: "La paga dei padroni" (The Boss’ pay)."

"According to certain influential institutions, the economic crisis is set to continue for at least the next two years and yet, only one of the many major Italian managers and the most highly paid one in 2007 at that, namely Alessandro Profumo, has said, almost as if making a concession, that he will not be receiving any bonuses in 2008. He states that he may give up any bonuses. His bonus in 2007 amounted to six million Euro, and this on top of his basic pay, which amounted to more than three million Euro. Therefore, we will see Alessandro Profumo when the company’s financial results are published since, even without receiving any bonus, his excellent salary is equivalent to the average of the top one-hundred Italian Managers who enjoyed gross earnings of some four million Euro each in 2007. He is the only one of the whole bunch to have stated that he did not deserve any bonus due to the bank’s poor performance in 2007. All the others have remained silent: from Corrado Passera, Managing Director of Intesa SanPaolo and one of the main competitors of Profumo’s Unicredit Bank, through to the top managers of the other major banks and industrial companies, for example Pirelli, whose share price has dropped sharply on the stock exchange and whose Managing Director, Negri, is the highest paid of the lot, with earnings of some six million a year. Now the minority shareholders, the public and the customers of these major listed companies that also manage private savings, namely the savings of the masses, those without any say, will be expecting these top managers to act in keeping with the very modest results that their companies have achieved.
These managers’ remuneration, as we attempted to explain in our book entitled "La paga dei padroni" and published by Chiarelettere, were stratospheric but were never linked to the achievement of any results, or rather, the financial statements never stipulated to which results their remuneration was in fact linked. What we have indeed noticed during our observation of the situation in recent years is that the remuneration received by the managers has continued to increase unabated, irrespective of the results achieved and, in fact, just a few years ago now, two American scholars working at the heart of global capitalism write a book entitled "Remuneration without results". This example also holds true here by us. There is certainly enough political interference in the running of the State-owned public companies. Just recently we have seen the case of Alitalia, which, although bankrupt, is currently in the process of being taken over by a consortium of private businessmen, leaving the massive burden of the Company’s debt to be carried by the taxpayers and the shareholders, half of whom are private individuals. Yet in 2004, when Berlusconi was at the helm of Government and Tremonti was the Minister of Finance, Berlusconi called in the services of the man he classified at the time as the best manager in the world, namely Giancarlo Cimoli of the Government Railways Company, offering him a remuneration package that was the highest being paid by any of the European airlines, or 2.8 million Euro gross in 2005, a figure that was more than double that paid to its top manager by Lufthansa and more than triple that paid by Air France. However, Alitalia was and still is the airline posting the biggest losses not only in Europe, but worldwide. The remainder of the Italian companies and capitalist system is being managed by private entrepreneurs with little capital but who nevertheless expect to run the companies personally or to do so through their children, rewarded with exorbitant salaries and, in this case, in my opinion, politics is conspicuous by its absence. It doesn’t seem to matter that the decisions are being made by a closed system of relationships in which capital poor entrepreneurs, capitalists and bankers pay themselves exceptional salaries even when the profits, which should form the basis for remuneration, at least according to the classical and most proper capital reward systems, are indeed scarce or too inconsistent.
As far as we are concerned, the problem is not so much how to measure the extent of the remuneration paid out, but rather, the problem we have is the following: When he left Fiat after 25 years of service, Cesare Romiti was given a golden handshake of 100 million Euro. This amounts to a payout of four million Euro for each year of service. The question that arises is the following: why did Fiat give all this money to Cesare Romiti in the form of a golden handshake? It was while we were searching for an answer to this question that the real problems and failures of the Italian capitalists system were uncovered, namely that, today, the workers and minority shareholders invariably end up bearing the brunt of the serious effects of the economic crisis. What we would like to know, and what remains to be seen in 2009, is not only whether or not they will be reducing their salaries accordingly in the light of the economic crisis, but also whether or not the managers and entrepreneurs who together run these Italian companies change t