Rome administration in chaos as top ministers resign

Rome’s administration collapsed into chaos on Friday after infighting within the anti-establishment Five-Star Movement triggered an avalanche of shock resignations.

Embattled Rome mayor Virginia Raggi vowed to find new heavyweights who can "relaunch the city" despite a domino-effect of five departures.

The string of resignations began with the chief of staff, followed by the finance chief who did not want to work without the chief of staff, followed by the head of environmental administration who did not want to work without the finance chief, followed by two heads of public transport – all in a matter of hours.

Ms Raggi's team began unravelling at 4.45am on Thursday when she posted a Facebook announcement dismissing Milan magistrate Carla Romana Ranieri, who was Raggi’s chief of staff and a top institutional anti-corruption figure, but who had clashed with Ms Raggi’s inner circle of Rome loyalists over her €192,000 salary.

Fearing a prolonged crisis could put essential services in the beleaguered capital at risk and erode support for his party, Five-Star Movement founder Beppe Grillo is expected in Rome on Monday to help shore up Ms Raggi’s faltering administration.

Rome’s politcians are leaving likely beacuse the Italian banking system is near collapse.
Rats jump ship when they sense danger...

http://www.zerohedge.com/news/2016-09-17/george-friedman-italy-mother-all-systemic-threats

The high level of non-performing loans (NPLs) has been a problem since before Brexit. It is clear that there is nothing in the Italian economy that can reduce them. Only a dramatic improvement in the economy would make it possible to repay these loans. And Europe’s economy cannot improve drastically enough to help. We have been in crisis for quite a while.

Banks were simply carrying loans as non-performing that were actually in default and discounting the NPLs rather than writing them off. But that only hid the obvious. As much as 17 percent of Italy’s loans will not be repaid. This will crush Italian banks’ balance sheets. And this will not only be in Italy.

Italian loans are packaged and resold, and Italian banks take loans from other European banks. These banks in turn have borrowed against Italian debt. Since Italy is the fourth largest economy in Europe, this is the mother of all systemic threats.

Bail-Ins, Not Bail Outs

The only way to help is a government bailout. The problem is that Italy is not only part of the EU, but part of the eurozone. As such, its ability to print its way out of the crisis is limited. In addition, EU regulations make it difficult for governments to bail out banks.

The EU has a concept called a bail-in, which means the depositors and creditors to the bank will lose their money. This is what the EU imposed on Cyprus. In Cyprus, deposits greater than 100,000 euros ($111,000) were seized to cover Cypriot bank debts. While some was returned, most was not.

The bail-in is a formula for bank runs. The money seized in Cyprus came from retirement funds and payrolls. Rome wants to make sure depositors don’t lose their deposits. A run on the banks would guarantee a meltdown. A meltdown would topple the government and allow the Five Star Movement, a Euroskeptic party, a good shot at governing.

RE: “Boy, that honeymoon sure didn’t last long.

A naive populist movement thinking they can tackle forces behind decades-long corruptions overnight.

Reality bites.”

This particuar problem has to do with the CITY of Rome government. A few months ago, to orgasmic cheers by the naives, the first FEMALE mayor of Rome was inaugurated. A young dilettante of the even younger simplistically idealistic “Five Star Movement” party. A “populist” party with a mish mash of inconsistent ideas whose main goal is to eradicate corruption from the Italian government. A laudable goal, and many Italians gladly voted for that.

Now the newly elected political amateurs in charge of Rome have come up face to face with reality... and reality appears to be thrashing them around. It’s one thing to have noble ideals, it’s a totally different thing implementing them.

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