It is almost certain that there will be another euro crisis in 2017. The last time we had a euro crisis, the focus of attention was Greece; today the vortex is Italy.
Italy is not Greece. Italy is the third-largest economy in the Eurozone. Italy is the second-largest manufacturing nation in the EU after Germany. Italy is the largest debtor in Europe. The third-largest Italian bank is irredeemably bankrupt. Italy has no government and the people who are likely to win the next election want to take Italy out of the euro and replace the euro with their own currency, the lira.
These are the facts.
Our Finance Minister has said there is no problem in the Eurozone. I really don’t know what planet he is living on.
Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece.
Unlike Greece when it was going bust, Italy can’t be patronised, isolated and vilified by the likes of Slovakia, Finland and — shamefully — our own Government. Italy is a country of close to 60 million people and unlike the British, who were always semi-detached Europeans, the Italians are founding members of the EU and original signatories of the Treaty of Rome, which is 60 years old in March.
By March, it is likely that Marine Le Pen will be the frontrunner in the French presidential election. Could she win? Of course she could. And if she wins, the euro is toast.
There is already a massive capital flight from Italy. This flight of money will extend to France in the months ahead.
The euro is the problem and if the EU wants to save itself, it may have to abandon the euro. Quite what that looks like is anyone’s guess, but here are the political facts: the two main Italian opposition parties, the people who won on Sunday, want Italy to hold a referendum on leaving the euro. Furthermore, Le Pen has explicitly stated that the day she wins, if she does, she will pull France out of the euro and reinstate the French franc.
Le Pen currently has 40pc of the electorate. All she needs is the same type of momentum that propelled Brexit, Donald Trump, and the vote in Italy, where the government lost — not by a few per cent, but by a whopping 60pc to 40pc.
After Italy, the chances of Ms Le Pen winning in France have increased yet again. We are talking about a political movement that is jumping across borders, across continents. It is nothing short of a democratic insurrection against the establishment and it is happening all over the world. Every time the outsider wins in one country, it emboldens the next outsider in the next country to have a go.
We are not immune. Arguably, Ireland was the canary in the coal mine. This time last year, Fine Gael strategists — and almost everyone else — were confident that the recovering economy would be enough to propel them into government. In the end, Fine Gael lost 25 seats. Similarly, in the UK the Remain side was confident that the British people wouldn’t make a leap in to the dark and vote to leave the EU. The Remain side made Fine Gael-style arguments about how well the economy was doing, how low unemployment was and how “looney” the opposition was; the electorate didn’t buy it.
The same happened with Mr Trump. Hillary Clinton argued that things in America were essentially good and Mr Trump was mad. The electorate backed Mr Trump.
The same thing happened in Italy and the electorate went for the disunited opposition, rather than the so-called sensible, safe-pair-of-hands government.
I think the same will happen in France.
So 2017 will be the year the British leave the EU, the year Italian banks go bust and Italy’s new government is headed for the first time ever by people who want to break up the euro, and it could be the year that Le Pen wins in France.
In term of the crisis in the euro, Italy will be the epicentre, so let’s focus on it. Three weeks ago, I wrote this column from Rome and suggested that a No vote was likely. But let’s gain a bit of altitude and put the problem of Italy and the rest of southern Europe in context.
At its most basic, Italy has the same problem that Greece, Spain, and Portugal have. It’s a familiar story.
People in the south of the Eurozone borrowed to buy goods from the wealthier north, mainly from Germany. This type of prosperity is rented, not earned. The economic growth they anticipated failed to occur. So there was a repayment problem.
The goods the southerners bought were mainly things like cars and nice goodies, so for the banks that lent to the people, there is no collateral to recover.
Writing off a massive loan as a loss will render the bank insolvent, so instead it goes into “extend and pretend” mode. The banks decide not to call in loans and try to extend repayment terms. But as growth evaporates, these loans just get worse with time, not better. And the sense of crisis spreads amongst the people like a virus in a crèche.
That’s what is happening in Italy and indeed throughout Southern Europe.
Eighteen percent of the total loans made by Italian banks are now considered to be non-performing and Italian banks have no extra capital.
Estimates are that Italian banks may need €40bn just to remain solvent.
Now with no government there is no plan as to how to raise the money to plug the hole in the Italian banks’ balance sheets.
It was announced yesterday that Banca Monte dei Paschi di Siena, the world’s oldest bank and the third largest lender in Italy, will be bailed out by the government this weekend.
This is the beginning. In fact, the Italian State may well have fired the gun for capital to leave the country and head to Germany.
Contagion will spread to France and it is against this background that France will host its presidential election.
What odds on President Le Pen now?
Subscribe from freezing Dublin!
Here, in warm Canary Islands. Your current article is frightening. I think the biggest problem with Greece, Italy, and Spain is that it is very impossible to collect taxes hence governments are broke. Valencia had to cancel their annual international tennis tournament this year because the Ayuntamiento had no money.Hence less tourists, less hotel bedrooms occupied etc. I was in Greece this year.First visit since 40 years ago,when we went every year for the family holiday. The country only deals in cash.! Car hire, hoteliers,etc. All request cash on arrival.They dont even want a booking deposit via credit card, going… Read more »
So do we negotiate an new Punt tied to Sterling as part of the Brexit deals.
Italy-under-Grillo will be far more stable, and perform better than France-under-LePen, or Germany-under-Merkel. Why ? Because the Italians know how to get things done, and are autonomous to the degree that they are able to get around whatever ineptitude comes from the top political decision maker. I am actually not worried about Italy, if Italy leaves the Euro. The Italians will manage their own affairs much better than the amateurs in Brussels. I think France-minus-agriculture is a massive underperformer. And French agriculture performs because family members ignore the 36 hour working week. And because of the CAP program. The world… Read more »
“It is almost certain that there will be another euro crisis in 2017.”
Really?
It’s odd you should say that because the last one hasn’t ended and is om fact getting worse.
Michael.
“Our Finance Minister has said there is no problem in the Eurozone. I really don’t know what planet he is living on”
He doesn’t live on another planet he lives in the same madhouse as peter Sutherland and the bonbons.
It’s an excellent article.
Michael.
Will there be a crisis ? Renzi said himself that there is a problem in Europe that is 100 times the size of Monte Paschi. In all probability, this time next year, it will be a household name. There is one person in Europe who is capable of turning a small problem, into an enormous mess. A person whose first approach to a crisis is always to keep distant from it, and pretend that it does not exist. Then when it gets bigger that person has a track record of making a massive PR stunt. And the everything gets out… Read more »
“Failure to produce a legitimate bonafide gold-backed currency would mean the United States must proceed with the New Scheiss Dollar, an illegitimate fake phony farce of a currency. It would be subjected to a series of devaluations. The result would be heavy powerful painful price inflation from the import front. The effect would be to reverse a generation of exported inflation by the United States. The entire USEconomy would go into a downward spiral with higher prices, supply shortages, and social disorder. However, the rising prices would come from the currency crisis, and not so much from the hyper monetary… Read more »
Hi Pat, As the previous thread is now old and you might miss it, I am taking the liberty of replying to it under the new article, including your reply – I hope you do not mind: “Pat Flannery December 8, 2016 at 10:56 am Grzegorz Kolodziej: thank you for the links to my June 2016 post re securitization. I really appreciate your effort to find it. I also watched the 2003 YouTube of David McWiliams you researched and provided. Here is a brief extract where he said that there were “no economic tools at our disposal to rein in… Read more »
Here is a way to introduce silver to the national currency. Very similar to my own ruminations and effectively to Hugo Salinas Price. The day there is no option but a crash or such innovation is fast approaching. “”Assuming Trump can slay the FED and Congress with law and justice, to be effective, the Scheiss dollar must use Treasury silver certificates and the LUSK CLUTCH. What is the LUSK CLUTCH you might ask? Good question, glad you asked! The LUSK CLUTCH is an economic wheel which indirectly and incrementally meshes Treasury silver future certificates into the current banking system of… Read more »
“”These facts (related to the Irish Central Bank) lend support to a point I have been trying to get across to the readers ……
….The only solution is a total deregulation combined with a sound money system and the rule of law.””
I agree with you, Grzegorz, 100%
http://www.zerohedge.com/news/2016-12-08/deutsche-bank-provides-smoking-gun-proof-massive-rigging-and-fraud-silver-market
DB turned states evidence and cooperated with authorities and provided information to the litigants charging that banks including DB had conspired to set the silver fix and in doing so were manipulating markets, particularly silver, to their own benefit and the detriment of market participants.
It is well known in limited quarters that there are no such things as a free market. Definitive proof is now available. This may now become More widely known. Several major banks are now directly in the firing line.
http://www.zerohedge.com/news/2016-12-08/deutsche-bank-provides-smoking-gun-proof-massive-rigging-and-fraud-silver-market
http://sensiblemoney.ie/data/documents/How-Banks-Create-and-Destroy-Money.pdf
.
.
Master this, & then proceed to be a “f…king Nuisance” with this info..
U’d be doing the Irish nation a great service thence.
Still no update on the Irish institutional state’s approach to Brexit. Meanwhile the Brits are getting moving. The Bill is now approved by Parlaiment. And within days we see this. http://www.telegraph.co.uk/business/2016/12/08/mcdonalds-bring-international-tax-base-britain/ 18 months ago moving the tax headquarters to Ireland was all the rage. Britain means business. Ireland means pretence. Will the know-it-all millionaires on Official Ireland’s official opinionating on weekend radio, next start badmouthing anybody who moves their tax residency to the UK ? Because as a strategy, that is about as useful as piddling into a gale force wind. Our superficiality is costing us dear. Direct solutions are… Read more »
Italy will not vote to leave the Euro. There will be no referendum, no government decree, no act of parliament. Nothing. The politics of abandoning the Euro are just too complex. The legal hurdles are insurmountable to any political force, except possibly a military dictator. When in power, any party will do a Syriza and accept whatever conditions Germany is willing to dictate for the whole circus to continue. M5S may threaten a referendum, but it is just that: an empty threat. That is not to say that Italy will not be forced by events to issue its own currency… Read more »
Things that we need to be honest about – as the cost of the pretence are killing us. Our obedience to the imperial project in Brussels. The identities of the Anglo Bondholders. The identities of the AIB Bondholders. The need for one urban bus station/terminus on the site of the CBoI or a simlar central location. And a all-weather walk way to College Green to the Luas stop that will be there. With no traffic on Dame Street, College Green, Nassau Street or Westmoreland street. Buses, bikes and pedestrians only. The need for DART-U. The need to move more state… Read more »
HOW “THE COLLEGE C..NTS” UPON HAVING REAPED HANDSOME EDUCATION GRANTS FOR THEIR COLLEGE & UNIVERSITY EDUCATION TREAT THE UNDERCLASS TRYING TO GET TRAINING. . I just had a look at FAS training centre “travelling allowances”.Travel . Ref. . . EXTRACT . Course Participant Travel Allowances (Full-time and part-time courses) Effective: 1 January 2002 Miles / Kilometres Rate* € Per Week 3 – 5 miles / 5 – 8 kilometres 4.60 5 – 10 miles / 8 – 16 kilometres 11.90 10 – 20 miles / 16 – 32 kilometres 17.60 20 – 30 miles / 32 – 48 kilometres 21.60… Read more »
This is hilarious. The ECB are playing a game of bluff, with the Italians, called “you are the only ones with a dodgy bank”. The same thing happened with the Greeks. And then the Irish. And then the Spanish. And then to reinforce the pretence there are stress tests that amount to a free pass. http://www.zerohedge.com/news/2016-12-09/ The fact is that Italy is not the only country with a dodgy bank. And Monte Paschi is tiny compared to the biggest problem of all. The ECB’s antics in trying to pretend there is no problem bigger than Monte Paschi, therefore there is… Read more »
The disaster of 2017 will be Swedish real estate finally finds gravity.
http://www.tradingeconomics.com/sweden/housing-index
There are many similarities between neoliberal capitalism today and the ancien regime of the late medieval period prior to the revolutions that swept away the secular aristocracies which had ruled for centuries. The aristocratic order of the ancien regime was incapable of managing a modern international state and this gave rise to social and economic crises which impacted the poorest and most vulnerable most harshly. The aristocracy responded to the crises in the same way the capitalist elites are responding today; they imposed the costs and the damages of their mismanagement and incompetence on the general population; refusing to give… Read more »
The author mentions that many loans are non performing, but I think he should have gone further and explained why… The fact is that Italy may be “the second-largest manufacturing nation in the EU after Germany” but therein lies the rub, it’s not really manufacturing that much any more (albeit more than others apart from the Germans). The big picture reality is that every few centuries the global geopolitical powerhouses change, like Tectonic plates. Nations such as the US, UK, France, Spain and even Portugal have had their day in the sun, now it is the turn of the East,… Read more »
[…] ‘bazooka’ reloaded until at least December 2017 – GoldCore 12/09 Almost certain there will be another euro crisis in 2017 – David McWilliams 12/09 Cash is no longer king: phasing out physical money – […]
“”According to the plaintiffs, records surrendered by Deutsche Bank show traders and submitters coordinating trades in advance of a daily phone call, manipulating the spot market for silver, conspiring to fix the spread on silver offered to customers and using illegal strategies to rig prices.””
http://investmentresearchdynamics.com/big-bank-silver-market-manipulation-confirmed/
CONSUMER LAW
PROTECTORS
Frances Firzgerald
Isolde Goggin
We are almost 2017
Lucky us.
More evidence of how the “Sham[rock]” Republic is not tenable for putting down roots in. Ur kids are not safe from the Apparatus that guards the rich. . Garda-Landlords / Landlord-Gardai Civil SERPENTS pedophilia accused get investigated by the “go ask my uncle am I a liar” Garda Síochána Ombudsman Commission (GSOC) at 1st instance. Garda Síochána Ombudsman Commission [ GSOC ] is also just an iteration of Garda Complaints Board. . And, note the typical secrecy about Garda-Landlords / Landlord-Gardai controversies ; Surely, the public are at least immediately entitled to know the location of where the Garda-Landlord /… Read more »
Dear readers, both conservative and liberal, both pro- and anti-“refugees”, those who voted for Mr Higgins, McGuinness, or Gallagher, or did not vote. Above, I wrote about manipulations of the Irish Times regarding their political reports on Poland. The problem with the Irish Times is that their “expert” on Poland, Mr Derek Scally, lives in Berlin, not in Poland, and gets all his information on political situation in Poland from the German media, whose only sources on Poland are Adam Michnik’s “Gazeta Wyborcza” and SS-established, BND-run weekly “Newsweek” of Mr Tomasz Lis – a master-manipulator leftie (son of a communist… Read more »
Here in PV we have made a sortie or two down the main streets of the city and through the shops and street and beach vendors. Three times after buying a small item I asked to proprietor how the business was. Repeated was the fact that there are way fewer visitors. This is in to the high season and the stores are empty. The food shops and cafes etc are bereft of people except the bars along the waterfront and they are busy but not overflowing. Who is missing, I was told, is the American tourist. Those that are here… Read more »
” I urge anyone reading this missive to make a donation to the GATA cause http://www.gata.org (https://www.lemetropolecafe.com/). It is the least we can do as a token of respect for the work of patriots in search of free markets and a return of the rule of law.” Michael Bellanger
Bellanger=Ballanger
@ Grzegorz, Re ; Mr. Scally,Irish Times reporting from Germany about Poland Not Mr. / Ms. whomsoever, Irish Times reporting from Poland about Germany Maybe Mr. Scally has some beau in Germany & is loathe to be in Poland reporting about Poland. . In general, I understand that the “liberal 8-) “-libertine-communist-corporate-fascist media — i.e. the main-stream media [ M.S.M. ] — are very hostile to current democratically elected government of Poland because this government are seeking to protect : the life of the pre-born children from being murdered / aborted the mores of the Polish nation from increasing homosexual… Read more »
http://www.thedailybell.com/news-analysis/populist-doom-aimed-at-trump/ CCblogging • 5 hours ago Hillary, Obama and all the Democrats are NWO freaks aka Globalists. The left wingnuts have been implementing the UN World Government known as UN Agenda 2030 in increments so that we Americans are kept in the dark about what is happening right under our noses. UN Agenda 2030 erases our established borders, it voids American law and it destroys our US Constitution. The Globalist UN with the cooperation of Obama and Hillary Clinton have scheduled this Fascist NWO to be FULLY IMPLEMENTED in just 14 years. The agreements that Obama has made with the… Read more »
Given that “all politics is local” AND “there surely are Irish people reading this blog who are being f..ked around by the nomenklatura”, please find the following very useful info ;
.
I recommend to persons afflicted by this front of the nomenklatura to print & enlargen to A3 size at least, & then to laminate or encase in glass within picture frame.
.
KNOW THY ENEMY !
.
https://www.welfare.ie/en/downloads/OrganisationStructure.pdf\
RT reported on this in November
https://www.rt.com/shows/boom-bust/368515-lufthans-strike-italy-italy-finance/
This is the latest.
CIA false flag operation.
False news carried by MSM.
AIM. Declare election invalid and thwart Trump.
http://www.thedailybell.com/news-analysis/cia-pushes-for-new-elections-2/
I am surprised the PTB allowed the election process to get this far. I suspected efforts to invalidate the election would take place. Insurrection is likely to follow: Then by Martial law.
I hope this is not correct.
COMING TO IRISH STATE JURISDICTION SOON TOO. . How to say that the Banksters are responsible for this ? . Daily Mail, 11 December 2016 . Children as young as seven are to be taught in schools to stop using the terms ‘boys’ and ‘girls’ – in case they discriminate against transgender pupils. A guidebook for teachers, parents and pupils to be sent to schools around Britain advises against using language that suggests there are only two genders. The book – Can I Tell You About Gender Diversity? – also features the use of hormone blockers by a fictional 12-year-old… Read more »
@ Grzegorz, I discussing with a Polish expat the “German” sic. ? control of media in Poland — And, this topic was raised by him as sub-set of the topic “blaming the indigenous Poles for the ‘Holocaust” [ also raised by him as relevant to life today for Poles everywhere because he says the Polish people were the majority beaten to a pulp then, & now they are being beaten to a pulp with verbal abuse & spittal & vandalism for starters in Poland whilst the perpetrators are crying for mercy ], I put it to him that the German… Read more »
SO SAYS MR. RON PAUL ;
.
Gen. Mattis:
Can Trump Leash His Pentagon ‘Mad Dog’?
.
RonPaulLibertyReport
.
President-elect Trump’s choice of Gen. James Mattis to be Defense Secretary has raised more than a few eyebrows.
Not only as a military officer in a traditionally civilian position, but also as an executive at a leading defense contractor.
His views on Iran are also considered extreme and not grounded in reality.
Will the mad dog be leashed ?
.
.
https://www.youtube.com/watch?v=ZBl0E0RKo9s
[…] Read Article on DavidMcWilliams.ie here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is – in economic terms – a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
[…] Unfortunately for the EU, if Greece was a tricky issue to deal with, Italy is — in economic terms — a massive Greece …” See article here […]
Not arguing against the premise of this article, but just the notion that “The electorate backed Mr Trump.” Currently Trump has only about 46% of the popular vote, and Clinton has nearly 3MM more votes than Trump. Clearly neither the majority nor the largest plurality supported Trump–he’s just going to be president because of a moronic system.