Lars, a reader from Norway cited a video discussion that mentioned the Italian government has €50 billion in unpaid bills.
The video, by economist Jacques Sapir is in French. He discusses Italy's proposed parallel currency, the Mini-BOT.
L'Italie vers une sortie de l'euro avec Jacques Sapir - Politique-Eco - YouTube
It's an hour long and I don't speak French so I asked Lars for a translation of key snips.
- Around 4 minutes; Italy has had problems since intro of euro. Italy technically in recession.
- 5:40 Youth unemployment around 50%
- 8:30 The Italian government does not pay suppliers. Owe around €50 billion. 3% of GDP.
- 9:40 Sapir explains that mini BOT (Bonds Ordinaire de Tresor) will be used to pay creditors that are owed the 50 billion. Mini BOTs can also be used to pay salaries. So it becomes some kind of lira. So BOTs will circulate as if it was a parallel money (lira).
- 19:50 ECB will not accept this backdoor lira. ECB will not continue to finance Italian banks.
This is just a proposal, or a discussion of a proposal, but the idea is gaining traction. There will be a showdown soon.
For background information and further discussion, please see Meet the Mini-BOT: Italy Will Break Up the Eurozone.
Mike "Mish" Shedlock