Italy Coalition Agrees to Leave the Eurozone
I typically do not agree with Eurointelligence regarding views on what “should” happen. However, I nearly always agree with them on what “is” happening.
Eurointelligence is pro-big-Europe, I am not. Tonight Eurointelligence lays it on the line:
“And By the Way: We are Leaving the Eurozone”
The Huffington Post Italia had an extraordinary scoop last night when it got ahold of a 39-page draft document setting out a coalition agreement between Lega and Five Star. It is unbelievably extreme – right out of the 1930s. The copy of the contract is dated 14 May at 9.30am. It precedes Monday’s discussions between the party leaders and President Sergio Mattarella, and the parties have already said that it is out of date. It may be, but the document gives a good reflection of the sheer radicalness of two parties.
The parallel governance is probably the single most important, and hitherto unknown, proposal. We translate its name as a Reconciliation Committee, and its role is to adjudicate when there is a conflict between the two parties inside the government. Since such a committee is not foreseen in the Italian constitution, it would only have an informal role. But, as Huffington Post Italia rightly points out, the creation of such a committee would undoubtedly give rise to inter-institutional conflict, and possibly even to a constitutional crisis. The committee would take formal decisions in areas such as international crises, natural disasters, law and order, and public health. It would comes together whenever any of the parties requested it. Its members would be the prime minister, the presidents of Five Star and Lega, the political leaders of the chamber of deputies and the Senate, and any ministers relevant to a particular decision.
The draft agreement also contains a eurozone exit clause, on page 35. The two parties commit to introducing (our translation)”specific technical procedures of an economic and legal nature” to allow the country to leave the euro, or to obtain an opt-out if there is a popular majority. The article points out that this clause questions the principle of the euro’s irreversibility. We heard a comment from the two parties yesterday that this clause is no longer in the current draft.
On page 38, almost at the end, there is a reference to the cancellation of the stock of Italian sovereign debt held by the ECB.
And, finally, the draft agreement favours an opening to Russia, a relationship that should not be characterised by threats but by partnership in economic and trade relations.
There can be no doubt that Five Star and Lega are following a radical agenda even if this draft agreement were to be rendered a little flatter in subsequent revisions. Whoever leaked this succeeded to give us an insight into the state of mind of the two parties. What worries us even more than the tough language on the eurozone, and the ludicrous request for debt cancellation, is the attempt to undermine the Italian constitution through parallel structures. This is the method by which fascists and communists in the 20th century managed to usurp democracies from within. Coalition committees to adjudicate conflicts about legislation are a normal thing, but a committee with formal executive powers is a completely different animal.
>The only line of defence against the constitutional recklessness of the two parties is President Sergio Mattarella, who left no doubt about his intention to uphold the constitution. But history has shown that this formal power matters little in practice when the radical parties have sufficient majorities – as is quite possibly the case here.While the president has the power to call new elections if the talks fail, he could inadvertently trigger an even more radical counter-reaction if the radical parties were to win more votes at the next elections.We would at this stage consider new elections riskier than allowing the two parties to form a government, especially since their majority in the Senate may not be sufficiently large for some of the more radical proposals.
What’s Next?
The comment above, in bold, is precisely what I said days ago.
Mattarella can call for new elections, but he cannot control the outcome.
I strongly suspect that if Mattarella were to force new elections, the results would be even more radical.
Pragmatically speaking, the best approach for Mattarella is to hope this situation dies down.
As we saw in Greece, countless times, the “exiteers” eventually throw in the towel.
Then again, Italy is not Greece. Whereas Greece could not realistically blow the entiere Eurozone to smithereens, Italy easily can.
Not only is Europe fighting Trump, infighting is the most it’s ever been.
For further discussion and details, please see Five Star and Lega Ask ECB to Cancel €250 Billion in Debt!
Mike “Mish” Shedlock
LouisM, don’t be so emotional up to the point of not being objective anymore.
“The Italians are not the Greeks even though genetically and ancestrally much of southern Italy was settled by Greeks”
Don’t forget the Arab influence and then domination of Sicily that lasted about 200 years, followed by the Norman invasion.
“An Italian girl was drugged, raped, eaten, then chopped up and put in a suitcase to be disposed….and this is an ordinary occurrence.”
It is not an ordinary occurrence. Also remember that in the past there were other cases of womens savagely tortured and cut into pieces or dissolved in acid.
“Italy will be far better off leaving the German dominated EU and reclaiming its economy, sovereignty, culture and nation-state”
I have been working for many many years in a US based multinational company and believe me, Italy can reclaim back its sovereignty but not its economy. The mighty bargaining power of a globalised capitalism cannot in any way be balanced by a bunch of small sovereign states, uncoordinated and even competing among each other.
As far as culture, the only way of getting it back would be, if young people worked a lot harder at school. Ignorance is prevailing these days among Italians.
Italy will be far better off? Or will it take the path of Venezuela and Argentina?
The Italians are not the Greeks even though genetically and ancestrally much of southern Italy was settled by Greeks. The Italians ARE NOT going to roll over and take the austerity measures Germany and the EU forced onto Greece. Greece revolted but in the end gave up. The result is that Greece was not only bankrupted but it was forced to be a gateway for African and Muslim migrants routes to Germany, France, Netherlands, Belgium and Sweden. Greece is in many ways destroyed to such an extent that Turkey is threatening Greece with war. As Greece neared collapse the EU redirected the migrant route to Italy. Italy is now filled with Africans and Muslims. An Italian girl was drugged, raped, eaten, then chopped up and put in a suitcase to be disposed….and this is an ordinary occurrence. There are now nogo zones in Italy and Italians (like Greeks) have a high proportion of poor in their population but those poor are seeing their govt pensions and benefits rationed so it can be given to non-working and unassimilable Africans / muslims. Italy (like Greece) is nearing collapse and revolt from migrant immigration. The Italian govt has not seen growth since it joined the EU/Euro (all the growth has been siphoned off to Germany). Now Italy is nearing revolt. Italy is following Austria and Switzerland and has been reaching out to the VISEGRAD paving the way for the day it will no longer listen to Germany or the EU on allowing migrants into Italy and an Italian exit where it can devalue its currency and restore the Italian economy (which is what Greece should have done…Greece should have been the first to leave the EU). Italy will be far better off leaving the German dominated EU and reclaiming its economy, sovereignty, culture and nation-state.
Onni4me you are completely right! Biggest problem in EUssr
is Boomers.
When Social Security was applied, people lived 5~10years after retirement, Now they live 20~40years after retirement!
It’s impossible to sustain 20~30% of the population with high “pensions income”
In Italy Social security accounts for 560BI€! 60% of that goes to 20% of the population.
Social security must be reformed but not only for future pensioners, but as well as actual pensioners.
You don’t need 3000~5000€ to have a decent end life
Currently in Germany. It’s booming. Italy won’t be allowed to leave the Euro. For anyone to think they will be allowed that autonomy is silly. One way or another it will be stopped.
Young don’t have work thanks to the euro common currency and German economical policies. EU is from inside (judging from people I meet every day) more and more unpopular. The ones that like it are the ones that belong to the high-earning class of society or those already retired. Especially the Baby boomers, they see nothing wrong and ask young complaining not finding jobs, how easy it was when they were young(sic!). EU might work in theory but in practise all it does is spreads misery.
Being Italian, and still having some family over there, the majority I have spoken to want out (younger seem to want out more than older), and they all believe every level of Italian and EU government is corrupt. Not hard to believe.