Skip to comments.EU: ECB bond plan in jeopardy as Italy's voters reject conditions
Posted on 02/26/2013 11:30:47 PM PST by bruinbirdman
Italy's electoral earthquake is a catastrophe for the euro and the European Union, according to Luxembourgs foreign minister, Jean Asselborn.
The verdict was much the same in chancelleries across the eurozone, especially in those countries already starting to feel the first wave of contagion.
The result touches us all, said Spains foreign minister, Jose Manuel Garcia-Margallo. It is a jump into the void that bodes well for nobody, neither for Italy, nor for the rest of Europe.
Almost 57pc of the Italian vote went to parties that have vowed to tear up the EU austerity script. Together they control a majority of senate seats.
The Five Star movement of comedian Beppe Grillo, which won 25pc of the vote, has called for a euro referendum and has a return to the lira as one of its manifesto pledges, while ex-premier Silvio Berlusconi has threatened to pull Italy out of the currency bloc unless the EU switches to a reflation strategy.
Even if the centre-left leader, Pier Luigi Bersani, can put together a grand coalition with Mr Berlusconi, there is no going back to the hairshirt regime imposed by Mario Montis technocrat government at the EUs behest over the past 15 months.
A deal with Monti is impossible, said Mr Berlusconi on Tuesday. His austerity policies have put the country into a dangerous recessionary spiral, with rising debt and unemployment, and the closure of a thousand firms a day.
The great fear is that the European Central Bank (ECB) will find it impossible to prop up the Italian bond market under its Outright Monetary Transactions (OMT) scheme if there is no coalition in Rome willing or able to comply with the tough conditions imposed by the EU at Berlins behest. Europes rescue strategy could start to unravel.
(Excerpt) Read more at telegraph.co.uk ...
Austerity doesn’t work. Europe’s technocrats and bankers can impose it only by force.
And if that is the price of a united Europe, the price is too high.
Evendually, those who vote themselves the treasury will pay for it (austerity) one way or another.
Inflation if the historical payment mechanism.
We are Americans are now more like Europeans.
We reject austerity and any cut to our welfare state.
What the EU tried to do cannot be imposed here. Our leaders don’t answer to a distant capital, they answer to American voters.
EU austerity policies are politically impossible here.
Imposed austerity doesn’t work but, austerity will be the only option (result), short of collapse, from profligate (debt) spending.
I would like the glide path to, “one world government” to be broken in as many places as possible so, Viva Italia!
Austerity only works....if you have a society who generally practices it...like Germany. If you told a German to live off $1k a month....they’d find a way. The idea that you could teach austerity to Greeks? Forget it.
The Euro could still survive, but there would have to be some strong cuts of fundamental benefits and I just don’t see must Europeans willing to cut.
If you told a German he’s have to live off $1,000 dollars a month, he’d find a way to save $250/month for his old age.
Outofsalt - you are so correct.
The transvestite LaGarde and the New World Order bankers must be stopped.
Greece won’t go for austerity - Italy won’t either.
Greece is small enough for them to deal with, but not Italy.
What austerity? Does somebody have a real handle on just which “austerity” measures were in place in Italy?
I suspect that this austerity talk is a lie. I mean we’re trusting politicians and reporters on this. I’d like to see hard budget and tax numbers out of Italy before I fall for the “austerity doesn’t work” meme.
It works for household debt why not government debt?
Almost 65% of income in Italia, is gov’t based. I know, hard to believe. Yet, that is what happens when the lower class producers are enslaved by foreign monies, that are empowered by gov’t. Incestuous relationships are always self devolving. Thatcher said it best- “The problem with socialism, is that you always run out of other peoples money.” Or, words to that effect. Austerity, is not being able to deliver on false promises. Wow, do the promised hate that reality. The States in the US, have been buying votes, for a very long time. Those promises are just starting to come due.
Last I heard Italy’s had 63 governments in 68 years.
I don’t think it matters very much whom they elect. The Italians will just go about their ways as they always do.
Companies can't downsize, they can't fire workers or cut work hours without going out of business. They are so over-regulated that they can't do the necessary things to survive.
Europe can play all the money games they want, moving Euros from one crisis to the next, but until they liberate the labor market & abolish onerous employment/work rules they will never recover. The free market will save them while continued socialism will destroy them.
I can barely believe that figure. Although, I’ve met Italians and I can believe it as they’ve told me that doctors are state employees. I found it too fantastic and suspected personal bias of knowledge.
So is the austerity a simple furlough/reduction in cost like I see here in Chicago, Cook County and Illinois without an offsetting change that allows additional economic liberty?
So it’s an all pain, no gain solution?
My point of thought is that we’re hearing Krugman and other Obamaites stating that “susterity” doesn’t work. But what is the definition for austerity? If it is simply a reduction in government expenses that may or may not be harmful.
For instance, in Chicago you have terrible labor limitations which lead to high unemployment especially among the most economically challenged demographics. If cuts occur without a consummate relaxing in regulatory constrictuion it is bound to fail.
It essentially equates to a bleeding with any healing being blocked by law. Do you see my point? What is Italian austerity or Greek austerity? We need details to make good decisions.
Actually, I was low on the 65%. Yes, all pain, no gain. Unless, a reset is considered. The problem is, that Italia’s lenders, want to break them. Same with Greece. Same with every other, Euro banked recievers. There will be no reset. Ever. Now, will accordance be allowed, certainly. By, aceldama.
So a bankrupt country is being forced to repay bankrupt creditors. Absurd.
Next stop revolution and dicatorship. It’s time to start printing drachmas and leave the Euro while keeping the free trade integration.
I understand, your surprise. The revolution happened in 1959. The dictatorship started 1962. Are you a young person? Relax. Calm down. Everything is alright. Just relax. You have all the drachmas you will ever need. Relax. Watch tv. Send a text to your friends. Relax.