Breaking point

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In 2008 the growth in production is estimated to be about 0.5%. Only a few months ago, they were taking bets on 1 point something %. Itíll end up under 0%. A possible estimate is MINUS 0.5%. Thereíll be a harsh recession, but Italian-style. The drop in production is equivalent to a drop in employment. A recession is translated into hundreds of thousands of fewer jobs. In Italy however employment will rise and the salaries will go down. Itís the trend of recent years.
How does it work? An employee is transformed into a precarious worker. A third of his previous salary, bye-bye pension and no safety at work (it costs!). The equation is simple. More recession=less salary, more precarious workers (and thus more jobs) and more who die at work. The number of precarious workers has arrived at about 5 million. Thereís space for improvement. The whole Italian population. The abolition of article 18 that is under discussion is basically a help to the growth of precariousness and to employment. And also for dying of starvation. The recession is world-wide, but weíve already won the world cup. Growth estimates in Europe and round about for 2008: Slovakia 7.4%, Russia 7.0%, Ukraine 6.4%, Poland 5.3%, Czech Republic 4.8%, Turkey 4.6%, Norway 3.4%, Ireland 3.2%, Greece 3.1%, Sweden 2.5%, Netherlands 2.3%, Hungary 2.2, Belgium 1.9%, UK-Germany 1.7%, France-Denmark-Portugal 1.6% (*).
We are the last of the last. But there are no real proposals for restarting the country. The reason is simple: to change, the equilibria on which the System is based, would have to be turned upside down. That on your own you never reform. How many are left producing real wealth in Italy? How many are parasites? The number of the former is going down. The number of the latter is going up before your eyes together with the number of precarious workers, the number of the new poor, the public debt. Before the euro, the lira was devalued, now we get into debt, with joy, the Nation with new issues of State Bonds.
The economic problems of the country, for example, Alitalia, are resolved by getting into debt. But itís at breaking point. In 2008, we will pay about 70 billion euro in interest on the bonds issued. Thatís about 4 budgets, Crikey! In 2009, the amount of interest will be greater, for three reasons. The first is that Italy is considered to be at risk and to compete with State Bonds of other countries it has to guarantee higher interest rates. The second is that the public debt is getting bigger. The third is that our production is going down. Towards the catastrophe with optimism.
(*) Source: Consensus Economics

Example of journalism:

La Repubblica (more than 16 million euro of public contributions annually to the L'Espresso Group) after V2-day reported: "In 50 thousand at Grilloís show" and an article by Francesco Merlo.

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La Repubblica for the first of May 2007: "Piazza san Carlo where the Trades Union leaders spoke in front of 100 thousand peopleĒ
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Posted by Beppe Grillo at 10:02 AM in | Comments (13)
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I normally agree on the posting, but today it seems a little bit demagogic. Italians (and I am one, running in US to find job opportunities) should start to understand that there are trade-offs to do. If you want economic growth, you need to liberalize the market, flexibilizing the job market, allowing companies to pay less taxes and hire/fire easily. Unions are fighting hard to maintain their status, but they are not helping unemployed to find a new job. Alitalia is the typical exemple of how things work. Sure, everything will start with a cleaning in the Camera and Senato: almost 1000 politician in a country big as Arizona, when in US has half of that amount of politicians in Washington to rule over a country almost 5 time the size of Italy in term of population.
Well, from this part of the ocean, things dont seem nice looking back at Italy!

Posted by: Daniela Consolaro | May 4, 2008 03:16 PM

Hi Beppe,

I think we're really next to a breaking point... a major one actually. Jorge Randers spoke, more than 30 years ago, about global collapse:
Now we've got many signs we're going forth the "point of no return": denutrition is a reality in many countries which didn't have this problem before:
there were many wars in the past years which prove that this system is in crisis (war is the natural response, in this kind of system, to crisis, as we know by history) I could mention also lakes disappearing in the south of Chile
because of global warming which brings polar ices to melt and retire... the truth is, this "development model" is not sustainable anymore, and we've got to do something about that... As, even though I still haven't got childer nor nephews, I'm pretty sure I'll love them, and care about them... and for their lives...

P.S: sorry for posting the same as in the italian blog, this was for non italian speakers, aka international visitors to your blog...

Kindest regards

Posted by: Mauro Santoro | May 4, 2008 03:02 PM

Greetings from Bulgaria. Things are going up here and Bulgaria is in the upper part of the growth numbers you cited. What you're saying about italian economy has been happening for quite some time here and I have witnessed it first hand. We still have some of the lowest salaries in the EU and have sizable state and internal debts. I really don't think it's so tragic what you're describing about loss of momentum in the economy. Hope you people can overcome it, we're not wealthy enough to help you much if you don't.

Posted by: Nikola Dachev | May 3, 2008 02:44 PM


Posted by: fabio flamigni | May 3, 2008 10:00 AM

Quite frankly the usual problems of famine in Africa are mostly man made and until the Africans can sort out their "self inflicted" problems of bad Government, corruption, nepotism, inconpetence, plunder of the national coffers and all other bad things that Africa is associated with the African population will keep on starving.
This is a self inflicted starvation because Africa, such a huge luscious and rich continent, should be more than capable to in fact not only feed itself but the rest of the world as well.
Therefore to start with the African continent should not be included in any equation of of food shortages which are presently plaguing the rest of the world.
Get rid of the gangsters running Africa and Africa will have no problem whatsoever looking after itself.
As far as the Multi Nationals (Monsanto on top of the heap) it has been a fact for quite some time now that the powers that be are in control of the supply of all commodities and, besides someone has to pay for the black-hole of squandered billions of the war the Americans are waging in Iraq.
The USA original plan was to gain control of the Iraki oil and then making a killing through the reconstruction of iraq (after they bombed the shit out of it) through the Bush clan controlled Multi Nationals (read HALIBURTON as the prominent one) has back-fired and now the Americans have been trying by all devious means to get all the suckers of the world to pay their costs.
Like the Africans so as well the rest of the world deserves what they are getting because as long as the world population silently accepts those leaders, who mostly have chosen themselves to rule their countries, nothing will ever change for the better for them.
People of the world FUCKING WAKE UP!!!

Posted by: Maurizio Odello | May 2, 2008 01:17 PM

"Between May and next September 90% of the people in Sierra Leone will not be able to afford to buy a bag of rice." Zainab Bangura, foreign minister of Sierra Leone said. She also said, that to address the world food crisis emergency funding must be mobilized in order to prevent starvation. Perverse incentives to turn food into biofuels and managing financial speculation mut be removed. The underlying causes of the crisis such as harmful trade policies must end. Massive investments in sustainable agricultural productivity must be made in developing nations.

Posted by: LP | May 1, 2008 09:10 PM

Food prices are increasing because:

- Demand is increasing faster than supply: poor people who until recently were starving quietly, thanks to globalization, have become richer and have started eating more (in India and China, for example). The number of people on the planet is also rapidly increasing.

- Anticipation of increased demand has also prompted hoarding from many parties--not least, investors.

- Energy prices and flawed responding policies have provided an incentive to switch from foodstuffs to crops intended for energy production.

Masochistic regulations even in the EU only exacerbate the problem. Milk quotas anyone?

There are many approaches to solving the problem. Increased efficiency of farming techniques and increased farming surfaces are obvious ways to face the problem. New technology could also increase yield (this could range from better fertilizers to genetic modifications). In this, biotech and agricultural companies are more part of the solution than of the problem.

Reduction of land dedicated to producing bio-fuels in favor of food crops is another measures.

However, if the population continues to grow at the current pace, the problems are likely to become ever bigger. It will not be just food shortages, but water, energy, living space, pollution...

Posted by: S. S. S. | May 1, 2008 03:46 PM

So, food shortages are killing people by the hundreds of millions around the globe? Condolences from Agricultural giants such as Archer Daniels Midland, Cargill, Monsanto. To be sure, they feel for the deceased people -they really do. But don't ask them to empathize. How could they? They made a killing on this shortage of food. Their profits soared up and up into the blue yonder. They're so happy, they got Dean's CD on singing "Volare".

And, should you think their ballooning profits are to blame for the shortage, their media will have you know that, the high-food prices for pasta, bread, cheese, meat, rice and other basic food-staples, are caused by Chinese and Indians, oil companies, droughts and other factors,whatever they may be.

Let's regress a bit: actually, this food crisis has been going on for quiet a few years. Media, in the last few years, may not have bothered much with famines, but not because journalists didn't care. They do. In fact they gave those stories much space in the past. It's just that readers have been jaded by those hunger stories happening in God-forsaken countries. "So, why bore them and depress them with more bad news"? they ask themselves.

But, of course now it's front-page news, now is different, right? Wealthy, Western countries are beginning to feel the pinch, especially in Italy where wages are so low.

But, what can we do? The "invisible hand of the market", which takes care of global markets, is at work and the "invisible hand" knows what it's doing.

Really? Well,that's what corporate media tells us. According to them food prices are high because demand increased, high oil prices is making transportation more expansive and droughts decreased grain production.

But farmers are saying that the "invisible hand of the market" has nothing at all to do with food shortages and everything to do with the greedy hands of agribusiness conglomarates like ADM, Cargill, and Monsanto. Farmers are saying, and have been saying for a long time, that agribusiness conglomerates representatives with pull in the International Monetary Fund, World Bank and World Trade Organization pushed for global food solutions tailored for the maximization of their profitsts.

Few cases in point: conglomerates promoted and sold their genetically modified seeds to farmers, promising them better yields and increased crop production, but according to the University of Kansas the increas in production may not have happened. And according to the International Assessment of Agricultural Science and Technology Development the genetically modified seeds won't end global hunger as flaunted by agribusiness.

Agribusiness conglomarates pushed for global trade deals that spawned market speculators who inflated commodities' prices. Agribusiness also convinced the Bush Administration to allocate millions of acres of corn-growing-land for ethanol production instead of food production, raising the price of corn.

Result? Thirty-seven nations are experiencing food shortages and many people are dying or going hungry because they can't afford to eat. But, ehi! ADM, Cargill and Monsanto made a killing! That's all that matters.

Posted by: LP | May 1, 2008 03:32 PM

G. Vidozzi

While it is true that politicians enjoy enormous privileges, the problem in my view is much broader.

The huge and inefficient public sector is a good example of how "jobs" have been created by government fiat. Or early pensions. Or the mandatory services of professionals, such as the notary public, which operate in a regime protected from competition. The list is long.

The countryīs economy could function much better without all these burdens--if it had a different system. In the current system, if the government does not keep on pushing huge amounts of money into the economy, the whole system would collapse.

Here is the snag:

To keep the money flowing, the government needs to borrow huge sums. But public debt is already so huge that this practice cannot go on for much longer.

Taxes are so high, that increasing them further would likely bring social upheaval.

Reforming the system is also almost out of reach. An efficient system, once in place, would leave society better off. However, the transition would require that a huge number of people renounce their own privileges. There are no money for a safety net and it is highly unlikely that those people would accept. The showdown with the taxi drivers is a good example.

So, in my view, Italy is an unsteerable ship heading towards the iceberg.

Posted by: J. J. K. | May 1, 2008 02:54 PM

to JJK :
the generous distribution of borrowed wealth, incredible privileges and highly paid pseudo-jobs and positions has always been restricted to the politicians and their cronies ( 4 or 5 million of them ).
The other italians can hardly meet ends and have to pay for the cost of the privileges the politicians have, shamelessly, bestowed on themselves and on their cronies. By doing so, the politicians have actually deprived the italians of their future and therefore they are directly responsible for the decline of the italian population. This is equivalent to an ethnic cleansing, which is an international crime.
Not surprisingly, once, the anti-mafia national prosecutor, stated that organized crime and politics are as tiedly connected as fish and water.
To change the existing state of affairs , it would take a great act of courage by part of the italians, courage that us italians have in a very limited supply.
Good luck italians.

Posted by: giuseppe vidozzi | May 1, 2008 01:42 PM

Dear Beppe,

I will gladly be the first to chain myself to Palazzo Madama ala' Greenpeace from the moment this new Parliament gives themselves a raise and more perks while the average salary remains at 2000 levels, with the rest in lavori precari as you so well depicted.

There should be an epic march on Rome the likes of which have never been seen, not even with Garibaldi...

Food for thought.


Posted by: Francesca Maggi | May 1, 2008 12:55 AM

Well his is good in fact because the time has come for Italians to do some real work and get their paws dirty for a change.
The Italian wealth after the war was done through blood, swet and tears AND dirty hands until most citizens became depending on their age either "Film Stars" or "Movie Directors" once they walked out of their measly abodes.
All real work was left to Africans, Maroccans and Peruvians and the Italians could lead their dreas with manicured hands and fashion all'ultimo grido.
Reality has come home to roost and it is now time to get the hands real dirty if they wish to eat.
For starters they could clean up the grime and repaint the road signs and road markers which make Italy look like a faded drab in a land of sunshine.
Good luck and happy work!!!

Posted by: Maurizio Odello | April 30, 2008 04:05 PM







Posted by: LUIGI BUCCILLI | April 30, 2008 11:23 AM

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