Bella Italia !
Bella Italia !
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With the appointment of a widely respected figure as the new Italian Prime Minster I am positive that the crisis of confidence in Italy might end soon. This because the new technical government can implement the necessary reforms quickly without the political baggage. The proposed measures will include property taxes and a wide range of privatization. It will also impact the retirement age.
The big test is if the new leadership is sufficient to send spreads lower. I think that current spreads reflect a very negative scenario about Italy and a deep lack of investors confidence. At these attractive yields short maturity Italian bonds could be a good buying opportunity if a new Government, with a wide political support, is appointed soon.
ECB Testing the non-intervention option
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Today Bundesbank president has confirmed that any intervention would be outside the scope of the ECB and that is not a lender of last resort. The big question is, even with a resolution of the Italian crisis of confidence, if other peripherals governments will be quick enough to implement reforms and if they can effectively add austerity to their already weak economies.
A very effective solution would be a guarantee or a yield cap from the ECB. Apparently this is not an option for the time being!
Austerity will not create growth!
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Another issue is how much Europe can grow after having implemented these wide austerity plans. Austerity without a pro-growth plan can be damaging for European Economies. With banks forced to de-leverage how can we find the right path for European Growth and therefore lower unemployment ?
Reader Commentary
at 08:42 am
Peters,The greatest enemy of the public is the political evil goverment leaders,who do not know and obey the law,love money than their selves and the public.rulling with unlawful faith.
at 09:52 pm
I am currently working in Italy. Bella Italia! Maybe.
But unlikely with such a technocratic coalition comprising 23 professors (all economists and ex-bankers), 17 technocrats (accountants and market analysts) and just 13 politicians.
This reveals how complex the financial sector has become. It is lost in its own maze of financial products and governance instruments.
Not only that, it is now crystal clear for the trained eye looking beyond the mere calculus, that the banks and the bankers have virtually transformed the economy and elected government(s) making it obvious that voting for political manifestos at the next general election will have no value or effect at all.
The result will eventually be more riots and then in Italy )and elsewhere), while they are becoming more violent and focused on the perpetrators themselves.The manipulative banks. The coercive financial service providers. The docile government(s)
Is it not strange, absurd even, that the Italian Construction Conglomerate I am working at is actually going overseas to purchase its materials and equipment, since they can obtain this cheaper than in their own country and also provide ways to avoid crippling levies and taxation ???
I am sure that the Korean Chaebols and other Asian syndicated industrialists will be laughing in their fist , now that Italian construction giants are also purchasing industrial equipment from their rivals, when unemployment in Italy is on the rise.
Back to protectionism for Italy? With so many economists in the coalition who suck up to bankers I doubt it. It will be all talk and no action while like these constipated mathematicians "work it out with their pencils".
Italians will slowly bleed into anaemia like the bankers have precipitated in UK, USA and Europe to hollow out once mighty industrial nations.
So tell me. Who is Public Enemy No.1 these days. Quantitative Easing perhaps which pumps more money into the financial turmoil ,so that greedy bankers and such ilk can feast their eyes on cash while washing their grubby hands in it.
at 04:37 pm
With facts,taxes rate higher,privatisation,reform of laws and unemploments are factors of inflation of good economy.
To deflate a weak economy.the country may:
1.not impose taxes that are too higher than the income of the earners.
2.not privatise capital natural resource.
3.not reform laws beyound the economy standard and suitability of financial and social living.
4.allow printing of more money for damages made and update circulation of money.
5.solve unemployment by giving out loans on subsidice rate to selfemployed and employing qualified on a starting wage level suitable for both.
6.retire old aged in services.