#italy

Grazie Mille?

German MEP Elmar Brok has apparently told German media that Nigel Farage has secured Deputy PM Matteo Salvini’s assurance that the Italians will block the plan to extend the Brexit deadline. All 27 EU nations must unilaterally agree to such terms. Nice to see one nation state honour the democracy of another.

Note that even left-leaning UK House of Commons speaker John Bercow has said that May’s mildly altered versions can’t be brought before the House again for another vote. He’s right. Nothing short of wholesale change would alter the current drubbings.

How quickly can Eurocrats back down to offer the deal they probably ought to have done in the beginning? Did the British public ask for a watered down relationship with the EU at the time they voted to leave? No.

Hopefully Farage’s plan works. Sad to see that it takes a foreign leader to uphold democracy in the UK than the very people elected to do so.

Or do we cynically need to consider the idea that the EU will cut Italy some generous concessions to vote with the herd. Although siding with the British forces much needed change within the EU which probably can achieve the same result.

Monbiot is right

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CM has a soft spot for George Monbiot. Almost a decade ago he wrote about the Climategate scandal which showed the corruption within climate science. Monbiot suggested along the lines, “if you cut the average climate activist in half you’d discover most had little more than a passing grade in a liberal arts degree”. He, of the left himself, was in a sense kicking his own side for continuously trying to gloss over things they don’t want to admit. Monbiot believes that winning arguments requires proper debate, not making more noise to drown out dissenting voices. So it was refreshing to read his take on the famous G-7 picture of Merkel eyeballing a recalcitrant POTUS. Monbiot wrote,

There was much rejoicing this week over the photo of Trump being harangued by the other G7 leaders. But when I saw it, I thought: “The stitch-ups engineered by people like you produce people like him.” The machinations of remote elites in forums such as the G7, the IMF and the European Central Bank, and the opaque negotiation of unpopular treaties, destroy both trust and democratic agency, fuelling the frustration that demagogues exploit…Trump was right to spike the Trans-Pacific Partnership. He is right to demand a sunset clause for Nafta. When this devious, hollow, self-interested man offers a better approximation of the people’s champion than any other leader, you know democracy is in trouble.

It is a powerful point. CM has made the argument for years that the ‘people’ are getting fed up with leaders who do little more than feather their own nests for the future. So when voters put people in power that promise to put words into action is it any wonder we have the political upheaval we do? It is amplifying and with good reason.

The Italians didn’t like it when the French and Maltese took potshots at their newly elected leaders stopping and turning around refugee boats which were election promises. The Austrians are through listening to the bullies from Brussels lambasting them for deporting radical imams and their families as well as closing militant mosques. While the EU elites may have celebrated Macron’s victory they still overlooked Le Pen managed twice the vote Front National had ever received. The Hungarians are tired of being told they must take their quota of asylum seekers even if a referendum showed 98.4% were against it. Even Merkel got a stiff uppercut from the largely socialist leanings of Germans with the catapult of the anti-EU AfD to the second largest party. It isn’t just Europe either.

Canadians are tired of being told they must comply to compelled speech laws. They gave Trudeau a precursor of their anger last week by voting in Progessive Conservative Doug Ford Jr. as Ontario Premier. He annihilated Liberal Kathy Wynne so badly her party can’t even serve in parliament. While liberals were complaining Ford won it for being a white heterosexual male they overlooked that most constituents which gave Liberals 15 years to show something were sick of being taken for mugs. They’re exhausted being told by governments how they should live their lives and tired of policies that ensure endless misery if they fail to comply.

Even liberals in America can’t shake off TDS. By way of example, in the run up to the Democratic primaries in Maryland, 46% see getting rid of Trump as the highest election priority, with the usual progressive values of slashing crime (Baltimore highest crime in US), tackling opioid abuse (3rd highest rate of addicts), climate change and affordable healthcare registering less than 11% combined.

The irony of today’s political sphere is that the very politicians that are so fearful of the next election would romp home were they to actually listen and represent their citizens rather than let the likes of a Trump force them to wake up. CM has often been criticized for supporting Trump as a beacon of righteousness. Monbiot described why better than CM ever could – he is an absolute necessary evil to wake the world up from its slumber of feckless bureaucrats who only have their own interests as priorities. Despite all of the vulgarities, the glass jaw and vanity he is spooking incumbency.

Maybe $10m p.a. talkshow host Bill Maher expresses the absolute desperation of the left. Instead of coming forward with a raft of policies that would make Trump’s look utterly at sea, the best idea is to wish shared misery on Main St via a deep recession to achieve it. With leadership and depth of policy like that, Alec Baldwin’s 2020 campaign at the very least will field the collective audiences of Robert DeNiro, Samantha Bee and Sally Field as the purveyors of the behaviours we should aspire to.

Slovenia slaps the EU too

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Slovenia has joined the list of populist movements. In 2000, there were 4 countries in the EU that had populist coalitions/majorities (Lithuania, Latvia, Switzerland & Austria). Scroll forward to today we have 15 (the previous 4 countries + Poland, Norway, Czech Rep, Italy, Slovenia, Hungary, Greece, Slovakia, Crete, Bulgaria, Romania). Neighboring Bosnia and Serbia are also populist led. We shouldn’t forget the in the populist/nationalist party surges in The Netherlands, Germany and France . Perhaps more amazing is that the EU still isn’t getting the message, most highlighted by the push to get the President of Italy to put in charge a non-eurosceptic former IMF employee as PM. That’ll work.

So to Slovenia’s election. The Slovenian Democratic Party (SDS) topped Sunday’s election on 25%, handing the anti-immigrant party 25 seats in the parliament. Center-left LMŠ, led by comedian and political satirist Marjan Šarec, came in second on 12.7% (13 seats), and the Social Democrats third on just under 10% (10 seats). SDS leader Janez Janša acknowledged forming a governing coalition will be difficult.

Juncker typified all of the arrogance that has propelled so many anti-establishment parties to power. He said, “Italians have to take care of the poor regions of Italy. That means more work, less corruption, seriousness.” Stereotyping rarely helps. Juncker also made clear that Italy’s problems are not the EU’s fault.

Time and time again, when studying poverty within the EU, the overwhelming number of countries inside the bloc remain worse off than in 2008. Growth rates remain anemic. If you were to look at a map of the floodgates of illegal immigration (which Deutsche Bank published) it isn’t a surprise that the local populations are voting for those governments that will seek to look after the citizens first. So before casting aspersions on a growing number of EU citizens’ assessment of the human rights of asylum seekers, the reality is that the socialists within the EU are clearly utterly dreadful at messaging and even poorer in execution. Then again Baroness Thatcher warned them of that in 1990.

If the status quo is so good why would we vote out the incumbents?

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Almost everywhere we look, we’re told by the political class how good our lot is. Our blessed Aussie PM told us, “It has never been a better time to be an Australian.” Boosted asset prices, low unemployment and tepid inflation gives the illusion of real wealth for everyone. As an electorate, if all of that were true, why wouldn’t we be going out of our way to make sure the status quo gets voted back in with similar if not greater majorities? As it stands, more and more incumbent parties are hanging on by their finger nails, being forced to create alliances to stay in power rather than stick to the principles their parties were founded on. The irony is that these grand coalitions are formed on the tenets of ignorant ‘un-populism.’

The latest election cycle shows us that a growing number of people aren’t buying mediocrity. They’re sick of incumbent politicians ignoring them. The current crop of leaders seem to think that being less worse than the opposition is a virtue to be proud of. Yet poverty levels continue to rise and wealth is not trickling down to the masses. Even rising state entitlements have a finite life and the electorate knows it. Being married to the government is not seen as a desirable strategy long term. Deficits keep rising and look increasingly hard to pay down.

Searching through the St Louis Fed database, civilian employment under Obama managed to grow 2.5% on pre-crash levels. So the US loaded up on $9 trillion in short term debt to create 4 million net new jobs. That works out at $2.25 million per worker. Hardly an achievement. Yet despite that economic growth has dithered at the lowest post recession rates ever. As much as we might want to celebrate record low unemployment these are not proud statistics. The quality of jobs keeps going down. $8.4 trillion of this federal debt load needs to be refinanced inside 4 years. $12.3 trillion inside 10 years. While politicians can call the average voter stupid, the daily struggles of the average punter shows how out of touch the law makers are. This was the grand mistake made by Clinton. While she hung out with her elite mates at $1,000 plate dinners in Democrat strongholds in LA, NY and Chicago expecting a coronation, Trump hit the little people and had crowds flocking to see him.

While Trump’s trade tariffs seem daft on the face of it, it was done for the forgotten people who voted for him. He is not concerned about the consequences. That’s the point. So much of his platform appears abhorrent but he is the only politician in danger of being raked over coals for keeping his promises. That’s why he was elected. The status quo had failed to deliver over decades. 80% of the population didn’t benefit from the asset bubble post GFC. The 1% took 42% of those gains. The average Joe and Joanne see this. While they might not fully comprehend it they know enough to see their situation is not much better.

Take a look at Trudeau’s India debacle. Apart from the embarrassing wardrobe saga, the bigger problems came when he blamed the Indians for letting a known terrorist attend a state dinner. The Indians, unsurprisingly, were most unhappy at the accusation. Many look to Trudeau as the posterchild of the left, pushing peoplekind. Telling Canadians that he will convert returning ISIS fighters with haiku poetry, podcasts and comparing them to Italian migrants at the end of WW2 is utterly preposterous to his constituents. Telling his veterans they’re asking for too much flies in the face of love of one’s country. No wonder his popularity continues to dive. His speech to the UN – where he rattled off how Canada was ticking all the UN diversity boxes – was only a quarter full. Not even his own liberal mates rallied to show unity in numbers. It was telling that virtue signalling is all about appearing to do good rather than doing it.  Yet the day before Trudeau presented, Trump spoke of America First and the audience was packed. They might have hated every word that dripped from his tongue but they didn’t miss it for the world. It is hard talk. Not carefully prepared politically correct nonsense.

Take the recent European elections. Germany gave Merkel the worst ever performance of the CDU post WW2. The SPD was even worse. The anti-immigrant AfD stormed to 16%. Is it any wonder that when Merkel’s misguided altruism  showed up on Election Day even she finally conceded we have a problem with “no go zones”. Some may wish to look at the Merkel miracle of growth and low unemployment but the public service in Germany has exploded from 9% pre 2008 crash to 16% today. Not private sector growth but public sector.

The Italian election showed over 60% of the vote went to eurosceptic parties. While volatility has always been a feature of Italian politics, this results showed the discontent underbelly of Italy which has seen poverty jump 50% to one third of the population since Lehman collapsed. While M5S said it wouldn’t form a coalition, all bets are off if it tied up with League. There are plenty of overlaps on the party platforms but the M5S would have to insist on the PM role. The EU would go into a tailspin on such news.

Austria voted in a wunderkind who put the right wing anti immigrant FPO in charge of immigration. Holland saw Wilders claw more seats. Nationalist Marine LePen in France doubled the number of seats ever attained by the Front National. Even Macron is changing his spots looking to introduce national service and take a harder line against migrant crime.

Whether the real statistics of migrant crime are wholly accurate or not is beside the point. It is increasingly seen as an election issue and more EU countries have had enough. They feel their lot is getting worse and view forking out billions in aid for people to settle here is pennies out of their pocket. If the stats are as the government sugar coats them to be in terms of the prevailing prosperity surely the citizens would overwhelmingly back them. Sadly the opposite is true meaning politicians aren’t selling their “compassion” effectively. Too many examples of gagging the police and muzzling the press have surfaced.

That is the thing. If the economy was rosy and bullish and more people felt secure there is a likelihood they would look at the immigration debate in a more positive light. All they see now is millions flocking to Europe as poverty is on the rise and the economy is on the back foot at ground zero. European EU-28 GDP hasn’t grown since Q4 2015. Despite a quadrupling of ECB assets net jobs created post GFC numbers 4 million, labour force participation remains below the peak. However we should not forget that Romania and Bulgaria joined in Jan 2007 and Croatia in 2013 which would add (at a 50% employment ratio) c.20mn meaning that employment in the EU on a like for like basis as a whole is down 16mn jobs ceteris paribus. Even if only Croatia was included then net jobs creation in EU-28 would be a paltry 2mn, or a smidgen above 1%. Anemic.

Yet the political class still doesn’t seem to be learning, especially the EU. Poland and Hungary have formed a pact to reject proposed quotas on migrants. The EU has failed to address the most important question. The wishes of the migrants themselves. It is one thing for the EU to appeal to voters as saving asylum seekers from war torn lands (when 80% are economic migrants by the EU’s own numbers), it is another to forcibly send them to countries that flat out don’t want them. Ask for a show of hands of asylum seekers looking to stay in Germany or head off to Hungary to settle and the likelihood is 100:0. Trying to make Hungarians or Poles feel guilty for being incompassionate is a price they’re clearly willing to pay with losing EU membership. Would we take kindly to a neighbor telling us how to arrange our furniture in the living room or sign a petition to prevent us building extensions even though it is not even in their way? Of course not. Still wagging fingers in disapproval is only likely to steel their resolve.

Flip to the Southern Hemisphere and Australian politics is also exposing the sordid state of the swamp. 5 PMs in 10 years. Now the Deputy PM has had to resign to the back bench and in a last ditched effort to claim some sort of moral high ground with the staffer he was having an affair with. He claimed he would still look after her even though a paternity test might show the kid wasn’t his. What a grub and a slap in the face for his partner to imply she may have been promiscuous. Once again the popularity of the incumbent parties in Australia continues to sink to all time lows. The Labor Party looks to have the next election in the bag but even then the popularity of the opposition leader is woefully tiny.

While the world seems to be in this state of blissful tranquility on the outside, we needn’t probe too deep before seeing how bad things continue to be on the inside. The little people may not have any financial fire power but at the ballot box they have an equal opportunity to stuff those that aren’t listening. Once again Italy shows us it wants change. Call it populism if you must but it is truly a reflection of just how bad things really are and how little ammunition to deal with any future crises remains. The little people are raising their voices. Best heed their words. It is the same reason why as zero chance as Trump looks in 2020, don’t bet against another 4 years in the White House. If the Dems hope that celebrities that talk of #METOO and gun control (all the while they attend Oscars semi-naked and collect their millions doing action films full of explosions and automatic weapons fire) will sway them to a return to the swamp they’re sorely mistaken.

Over 60% of Italians voted for eurosceptic parties

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For a country that has 24 prime ministers in 40 years, Italians are no stranger to volatile politics. However this election, according to the exit polls puts the eurosceptic 5-star (M5S) as high as 32% from initial suggestions it would win 28%. Former Prime Minister Berlusconi’s Forza Italia and Matteo Salvini’s right-wing League (formerly Lega Nord) taking between 32% in the lower house and Senate. Lega’s leader Matteo Salvini has said, “We don’t have a euro in our pockets. We have a German mark which they called the euro.”. The incumbent PD is looking to finish a distant 3rd place With 20-23% of the vote.

Italy requires a 40% lead to form a majority. M5S vows it won’t form a coalition. What is clear is that 60% of Italians voted for parties that are anti EU. While the EU believes it is a club worth its weight in gold, a growing number of its members seem to be rejecting much of what it stands for.

Italy votes – will it mimic the referendum?

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Remember the 2016 Italian referendum which was to decide on  whether to grant more power to the incumbent party to accelerate decision making? Well it ended up being a vote on ousting then PM Renzi who put his resignation on the ballot if it failed. The split between the yes/no was largely decided by economic condition. The poorer southern regions were distinctly red while a smattering of wealthy areas voted green (yes).

It is kind of telling that the furthest province in the north (Bolzano/Bozen) had the highest YES vote (63.69%) in the country while the Province of Catania (south-east Sicily) had the highest NO vote at 74.56%. Bolzano/Bozen was diligent with a 67.41% turnout vs 57.41% in Catania. It is a rich/poor divide by the looks of things. If you wish to dig into the details look no further than this site for who voted how.

The last poll showed Beppo Grillo’s eurosceptic M5S party leading with 28%. Berlusconi’s centre right Forza Italia alliance with the anti-immigrant The League is expected to get around 29%. The incumbent PD is looking at around 20%.

Since the collapse of Lehman in 2008, Italy has added 3mn to poverty (now 18mn or 29.7% of the population; EU average is 25%) with the unemployment rate above 11%. Since Merkel’s open door policy 600,000 illegal immigrants have flocked to Italy from Libya.

Italy is the 3rd largest economy in Europe and 30% of corporate debt is held by SMEs who can’t even make enough money to repay the interest. The banks have been slow to write off loans on the basis it will eat up the banks’ dwindling capital. It feels so zombie lending a la Japan in the early 1990s but on an even worse scale.

Monte Dei Paschi De Siena, a bank steeped in 540 years of history has 31% NPLs and its shares are 99.9% below the peak in 2007. Even Portugal and Spain have lower levels of NPLs. The IMF suggested that in southern parts of Italy NPLs for corporates is closer to 50%!

However one views the rising wave of nationalism in Europe, Italy will likely follow the pattern of Austria, the UK, Germany, Holland, Poland, Hungary and France. A growing number of European citizens want to be first in line rather than feel they have an EU directed obligation to bow down to political correctness. How else do we explain the AfD’s surge past the SPD?

If the eurosceptic/anti-immigrant patties get up  we shouldn’t be the least surprised. More Europeans want their own countries to be made great again. The house of cards is crumbling.

Italy misses 2018 World Cup qualifiers

It is quite a big surprise to see Italy not qualify for the World Cup soccer in 2018. While always entertaining, sometimes teams overestimate their ability to be guaranteed a berth. Being 4-time World Cup winners  should mean it is a formality but great to see that the level rises to stop competitions being dominated by a select few. Think of the Japanese Blossoms beating the Sth African Springboks back in the 2015 Rugby World Cup. Be complacent at your peril.