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Wednesday, June 12, 2013

Un Braccio di Ferro

Italy is rapidly losing patience with the EU:
Something snapped in the Italian psyche last week after the European Central Bank offered nothing to combat the credit crunch asphyxiating small business, and more broadly washed its hands of Euroland’s incipient deflation crisis and catastrophic wastage of its youth.
The next day ex-premier Silvio Berlusconi called for a showdown, or “Braccio di Ferro”, with northern powers before it loses it chemical, car and steel industries altogether.
Mr Berlusconi told Il Foglio that Italy’s government - which his Liberty Party keeps in office - is complicitly serving forces that are destroying Italy. It must instead confront the north, “and particularly Angela Merkel’s Germany”, with a stark choice: either they call a halt to fiscal and monetary contraction, and opt instead for full-blown reflation; or they must expect the victims to snatch back their own destinies.
And keep in mind, Berlusconi and the Liberty Party are the moderates. Beppo Grillo and Movimento 5 Stelle are even more openly anti-EU.  Italy has to leave the Euro and I've always suspected they would be the first to do so.  Evans-Pritchard knows it too:
A game theory study by Bank of America found that Italy would benefit most among big EMU states from a euro exit. It has a primary surplus, so it would not face an instant funding crisis. It has fat gold reserves, providing bond collateral that could be used to raise €400bn in a crisis. Italian household wealth is €275,200, compared with €195,200 for Germany. A basket case it is not, and Italy’s industrial barons know it. The country has one great structural problem: it is in the wrong currency with an intra-EMU exchange rate overvalued by 20pc to 25pc.
Forza Lira!

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37 Comments:

Blogger Nate June 12, 2013 4:33 PM  

Forza Lira indeed. it would be nice if there were actually a currency worth trading for...

Anonymous Anonymous June 12, 2013 4:37 PM  

Wouldn't the first non-basket case to leave the EU instantly become a preferred local reserve currency (i.e., what the Greeks want to stuff in their mattresses)? Isn't that incentive enough?

Anonymous Anonymous June 12, 2013 4:38 PM  

Ah, sorry, I meant Euro, not EU.

Anonymous Mr. Nightstick June 12, 2013 4:44 PM  

Would the Euzi's prevent their exit? My guess is that they would. Italy has always fallen from the north and France and Germany have a positional advantage.

Anonymous Gi812 June 12, 2013 4:50 PM  

Money for nothin' and chicks for free

Anonymous JartStar June 12, 2013 4:57 PM  

The EU will just dangle another carrot of easy money and Italy will stay put. I'm convinced that no country is leaving of their own accord.

Anonymous Porky June 12, 2013 4:57 PM  

Euro or Lira?
MPS or Cosa Nostra?
Shower or don't shower?
Defecate in street or don't defecate in street?

So many important questions for Italy these days.

Anonymous dh June 12, 2013 5:01 PM  

Is there any change italy will keep the political union but ditch the currency?

Anonymous Sensei June 12, 2013 5:02 PM  

The EU really seems to be doomed. Will a few years to a decade bring us more or less back to the beginning of the 20th century, I wonder, only with more players this time?

It's inevitable these brushfire conflicts and proxy wars will lead to world wars as globalism collapses (then when the smoke clears, the globalists will point out how only one-world government will save us, as usual).
The US is already nearly in a cold war with China (which right now I'd predict we'll lose the way the Soviets lost), and obviously the Islam vs. the West showdown has to ramp up to actual outright war at some point. Unless of course we really do just implicitly surrender by pretending there's no conflict, as we've been doing, until they get lots of nukes that they're actually willing to use.

Anonymous Bat21 June 12, 2013 5:25 PM  

Vox, I'm curious as to how the rank and file Italians of your aquaintance are responding to all this.

Blogger Nate June 12, 2013 5:44 PM  

"Is there any change italy will keep the political union but ditch the currency?"

Can't be done.

The only question that remains is... who'll be the first to split? and will there be a eurpean war over it?

Blogger Nate June 12, 2013 5:45 PM  

We should always remember how much europeans love killing each other... and we should always remember that a nice war is always seen by the powerful as an excellent way to deal with an economic crisis.

Lots of money to be made on a war ya know.

Anonymous Clay June 12, 2013 5:51 PM  

"Vox, I'm curious as to how the rank and file Italians of your aquaintance are responding to all this."


Yeah, Vox....what are the paisano down at the local sausage market saying about all this?

Anonymous Noah B. June 12, 2013 5:52 PM  

Get out while you still can, Italy.

Anonymous Noah B. June 12, 2013 5:59 PM  

"The only question that remains is... who'll be the first to split? and will there be a european war over it?"

I don't see it happening, but perhaps I'm underestimating the will of the Germans to keep the euro intact. At least for the time being, they don't seem to have the ability or will to wage war against and occupy southern Europe.

Anonymous Mr. Nightstick June 12, 2013 6:14 PM  

The Germans will do what they are told like they have always done.

Anonymous JPOutlook June 12, 2013 6:31 PM  

Two telling comments from the article caught my attention:

.... and so far rice pudding magnate Mr Ambrosia has confidently predicted that Greece would be that 'one'.

Then that Ireland would be that 'one'.
Then Spain.
Then Portugal.
Then Cyprus.

So you'll excuse us for taking his predictions with a pinch of rice pudding.

--And then this one, as a reply --

"Armageddon Ambrose" has a habit of this. The problem is he's is not entirely wrong - it will happen - the crucial question is when and which country. I guess he's hoping if he keeps playing the Armageddon record he will eventually strike gold (as it were) when it happens.

Personally I think the Euro crisis has got some years left in it yet.

--And, I agree with those sentiments.

Anonymous fnn June 12, 2013 7:20 PM  

The Germans will do what they are told like they have always done.

Just like the Americans since 1865.

Blogger ajw308 June 12, 2013 7:53 PM  

and will there be a eurpean war over it?
...It(aly) has fat gold reserves

I thought Italy was one of the I's in PIIGS. How can a country have fat gold reserves after needing to be bailed out and not leave those who loaned it money feeling disgruntled?

As I remember it, Italy loaned itself a significant portion of the money in one of it's last bailouts. It all sounds like smoke and mirrors to me and the real reasons are not those stated.

Anonymous castricv June 12, 2013 7:55 PM  

Vox, I still have almost 50 bucks worth of Lira leftover from my trip to Rome on the millennium. At that time ATMs gave you the option for Lira or Euro. Even as a 21 year old I thought the Euro was dumb. May some of the machismo, family oriented nationalism, and good old fashioned Catholic/Roman/Italian pride show an example for the rest of Europe to stop selling their souls down the river for a few more years of vapid wealth for a select few. If the Italians or Greeks can't spearhead this overall (not just economic change), I'm not sure any of the nihilist, weak wristed northern states will ever try before they die out.

Anonymous Bobert June 12, 2013 8:19 PM  

Hi Vox

OT but important: a good while back one of the commenters here (I believe it was Dr. Faust but I could be wrong) had brought up his skepticism of Christianity (but a willingness to discuss/look into it) and you had mentioned that you were going to do a post related to reasons behind believing in Christianity.

I know you have done this topic before several times, but you did mention that you had wanted to do a blog post on the topic, so presumeably you had some new perspective or information to disseminate to the Ilk and all of us lurkers out there.

I think a lot of us would be very interested in seeing it.

Anonymous Roundtine June 12, 2013 8:24 PM  

I don't think a war is coming in Europe just yet. It is the EU that is causing the fighting in Europe. Once the nations have independence again, they will look to clean house. Look at Hungary and Greece (where Golden Dawn is rising) as examples, they have turned attention to gypsies and foreigners. After the nationalists rise and spend a few years cleaning house of gypsies and Muslims, they will then decide what to do next. Hostile Muslims to the south and Russia to the east will be larger targets, as may be a far more economically powerful China.

And how about a truly ironic scenario, where ethnically revitalized Europe realizes it cannot secure itself without a U.S. which is slipping away due to demographic change.

Anonymous Mike M. June 12, 2013 9:08 PM  

It'll be interesting to see if there is a chain reaction.

Anonymous The other skeptic June 12, 2013 10:46 PM  

The V-22 is a success. It must be. Defense is buying lots more.

Anonymous The other skeptic June 12, 2013 11:00 PM  

Mercury Rising. You can trust the FBI but not the NSA!

Like Hell!

Anonymous Jack Amok June 12, 2013 11:05 PM  

I don't think a war is coming in Europe just yet. It is the EU that is causing the fighting in Europe. Once the nations have independence again, they will look to clean house.

It may end up that the Eurocrats so thoroughly piss off the average Jan/Hans/Juan and Tony in the street that Europeans will consume their next round of exuberance entirely with butchering bureaucrats instead of each other.

Anonymous Anonymous June 12, 2013 11:10 PM  

"The V-22 is a success. It must be. Defense is buying lots more."

This is a joke, right?

- VTOL

Anonymous Anonymous June 12, 2013 11:11 PM  

And how about a truly ironic scenario, where ethnically revitalized Europe realizes it cannot secure itself without a U.S. which is slipping away due to demographic change."

How would an ethnically revitalized Europe not be secure?

- VTOL

Anonymous The other skeptic June 12, 2013 11:29 PM  

Heh, seems like the Chinese are not going to play ball over the global warming crap.

Anonymous The other skeptic June 13, 2013 12:10 AM  

If cops can't kill citizens, they have to kill kittens

Anonymous Roundtine June 13, 2013 1:29 AM  

How would an ethnically revitalized Europe not be secure?

Secure internally, but not from external threats, not without high military costs. Having the U.S. allied with Europe takes the Atlantic out of play, except against the Russians. Take the U.S. out of the picture and you could have a Sino-Brazilian alliance patrolling the Atlantic with a Chinese naval base in Iceland.

Anonymous Inane Rambler June 13, 2013 2:06 AM  

"Take the U.S. out of the picture and you could have a Sino-Brazilian alliance patrolling the Atlantic with a Chinese naval base in Iceland."

Take a look at the combined navies of Europe. Look at Brazil. Then look at where China is.

I'm literally laughing that this was seriously suggested.

Anonymous Jack Amok June 13, 2013 2:35 AM  

The reality is in the last 500 years, only 3 navies have shown any ability to control a sea lane. The US, Great Britain, and Japan. France, Spain and the Netherlands showed some limited ability at privateering or shipping, and the Germans were good at raiding merchantmen, but...

...it takes more than shipyards to make a navy.

Blogger redlegben June 13, 2013 3:40 AM  

The Europeans looking to the US mainland is interesting. US mainland is much more defensible and rich in natural resources than Europe. I see a violent war against Islam by Europe. The next step is uncertain. Perhaps, movement to North America would be the inevitable conclusion.

Imagine the wonderful reunifying of Nordics. It will be better than Oktoberfest.

Anonymous Roundtine June 13, 2013 6:23 AM  

Then look at where China is.

Look at where China was 20 years ago. Imagine will China will be in 30 years.

Anonymous The other skeptic June 13, 2013 9:21 AM  

Look at where China was 20 years ago. Imagine will China will be in 30 years.

But, the US Navy will remain resplendent forever because Diversity!

Anonymous Karl Franz June 14, 2013 6:08 PM  

Leaving the Euro is leaving the EU. Its not gonna happen any time soon.

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