Chaos in Italy and Spain Challenge the EU

Spain and Italy could both have a new prime minister in the coming days.

In Spain Pedro Sanchez has got the support of the little Basque Nationalist Party (PNV) and has now the numbers to overthrow Rajoy with a no confidence motion.

With Sanchez, leader of the socialist party, as prime minister tensions on Catalonia could calm down as he is more open to dialogue than the hardliner nationalist Rajoy. But he will have to walk on a tight rope with a fragile and heterogenous coalition.

https://www.reuters.com/article/us-spain-politics/socialist-chief-pedro-sanchez-set-to-become-spains-prime-minister-idUSKCN1IW0TM

In Italy, political newcomer Giuseppe Conte is back in the game and will be sworn as prime Minister in the coming hours. Matteo Salvini (Lega) and Luigi Di Maio (5 Stelle) have reached a new agreement to form a government. Di Maio convinced Salvini to step back from his insistence that Paolo Savona, an 81-year-old Eurosceptic, should serve as finance minister, a choice previously vetoed by president Mattarella. Savona will be part of the government as European affairs minister but the finance minister will go to Giovanni Tria, a little known economics professor in favor of keeping Italy in the Euro. The new government is expected to take a far more antagonistic stance against Brussels than the previous government, headed by the centre-left Democratic party. But the alliance between the M5S and the Lega will only have a relatively narrow majority in the Italian senate, easing some concerns among investors and officials in Brussels that the new government could take drastic actions.

https://www.ft.com/content/5782e2d6-650e-11e8-90c2-9563a0613e56

image.thumb.png.26bce9581e3a873a50b38aa113a0e3f0.png

 

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(edited)

The various exits of European nations from The European Union seem like a corollary to the exits of the Red States from Obama's vision for America. He was quick to go on his Apology Tour after his first election. He and Merkel saw eye to eye on politics. Now she is an unwanted leader in a country angry at her. Europe has its own Trump light leaders trying to take over from the old guard.

Please see a poll of major European leaders  https://www.washingtonexaminer.com/europes-merkel-macron-may-less-popular-than-trump

Edited by ronwagn
added reference

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On 5/31/2018 at 8:27 PM, Marina Schwarz said:

And political turmoil is chronic in Italy, yes.

Chronic is perhaps an understatement.

Three critical lessons from Europe’s recent mini-meltdown

Trying to trace the origins of the latest political crisis in Italy is like… well… trying to trace the origins of the decline of the Roman Empire.

There simply is no good starting point.

You can’t talk about the decline of Rome without a lengthy discussion of how destructive Diocletian’s Edict on Wages and Prices was in the early 4th century.

But you’d have to go further back than that and discuss all the lunatic emperors preceding him, all the way back to Caligula.

But you can’t talk about Caligula without bringing up the effects of the civil war between Octavian and Marc Antony… which was a direct result of the previous civil war between Julius Caesar and Pompeius Magnus.

Before long you’ve gone back in time more than 500 years trying to figure out why the Roman Empire collapsed.

Modern Italy isn’t so different. After all, this is a country so unstable that it’s had 64 governments in the seven decades since the end of World War II, averaging a new government every 14 months.

That has to be some kind of world record.

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Articles on the disintegration of the EU or the end of the Euro are as common as political crisis in Italy but the EU and the euro are stronger as you may think.

The rise of populist euroskeptic parties across the continent is a challenge but it's far to be the end of the EU.

Without the EU european countries wouldn't matter on the world stage and would be reduced to american or russian puppets.

The same that are complaining now about Brussels would be complaining about Washington or Moscow.

 

The Brexit is an isolated incident and not the start the EU disintegration. Many Brits voted for the Brexit as a protest vote against the government, thinking that the leave vote will never really win. Now they regret the Brexit vote.

http://uk.businessinsider.com/poll-majority-of-british-people-regret-voting-for-brexit-2018-4?r=US&IR=T

 

But some reforms are needed to adapt the EU institutions. Enlargement to the eastern countries was quicker than the strengthening of the institutions.

 

 

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On 29/05/2018 at 8:24 PM, ThunderBlade said:

Yesterday UK and Catalonia, today Italy, tomorrow Hungary....The EU was never weaker.

But what lead to its weakness ? The "united states of Europe" was an answer to US monopoly. It would be bad for the world in case EU disintegrates. 

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On 29/05/2018 at 8:27 PM, franco said:

Public concerns over the EU’s direction have been growing for years, but the EU have resolutely ignored them and pushed ahead with “more EU” when they should have stopped, listened and reversed direction. And now, looks like EU is falling apart?

But why is EU ignoring such public concerns. How has it helped them ? Looks like "Brexit" would be followed by "Franxit" , "Spanixit" and "DeuteshExit". Not good for world economy.

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3 hours ago, sudhir said:

But why is EU ignoring such public concerns. How has it helped them ? Looks like "Brexit" would be followed by "Franxit" , "Spanixit" and "DeuteshExit". Not good for world economy.

Here's my weekend comment over on LinkedIn, about the PetroDollar, PetroYuan, EURO, EU, and the potential disaster of a "Global Currency".

https://www.linkedin.com/feed/update/urn:li:activity:6408812128228171776

(Part 1 of 3)

It would seem the End of Days is approaching for the PetroDollar super-dominance.  

Monopolies are generally bad.

I would prefer that the PetroYuan become a viable alternate *choice* to the virtual monopoly of the Greenback.

The Euro... had its chance and dropped the ball and has fallen and can't seem to get up.  Hopeless dithering.  So it seems the EU now wants to bring all other currencies down to its level of failure and control the world's economy... survival of the weakest.  Utter piffle.

Competition is *good*.

So I do NOT agree with this bit being promoted from the always squabbling, failed EURO, which is a FAR  FAR   FAAAR   worse idea.  Brussels dreams of financial  world domination need to be squashed, post-haste:
================================

De-Dollarization Escalates: "African Economy Needs More Usage Of Chinese Yuan"

The World Bank's former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.

"The dominance of the greenback is the root cause of global financial and economic crises," Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank.
 
"The solution to this is to replace the national currency with a global currency."

+++++++++++++++++++++++++++++++

(Part 2 of 3)

If you want to imagine just how badly a "global currency" would fail, look no further than the EURO.

Just imagine the EURO currency being shoved down the financial throats of every country in the world, by an unelected body of the World Bank.  No thank you.

Also, change is inevitable.  And competition is good.

"Reserve currency status does not last forever."

20120103_JPM_reserve_0.png.2a868f162f88ccdd70fa7138683bb307.png

+++++++++++++++++++++++++++++++

(Part 3 of 3)

Perhaps you will better understand my earlier comments above, both about the EURO and the potential disaster of a "global currency" if you take the time to read this next article:
================================

Why the Eurozone and the Euro Are Both Doomed

" ...Now an inescapable double-bind has emerged for Germany: If Germany lets its weaker neighbors default on their sovereign debt, the euro will be harmed, and German exports within Europe will slide. But if Germany becomes the "lender of last resort," then its taxpayers end up footing the bill.

If public and private debt in the troubled nations keeps rising at current rates, it's possible that even mighty Germany may be unable (or unwilling) to fund an essentially endless bailout. That would create pressure within both Germany and the debtor nations to jettison the single currency as a good idea in theory, but ultimately unworkable in a 16-nation bloc as diverse as the eurozone.

** Be wary of endless "fixes" to a structurally doomed system. **

EDITOR'S NOTE: a version of this essay was published here on June 23, 2011. Nothing structural has changed in the seven years since the original publication."

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Break out the popcorn, it's show time...

War Erupts Between Italy's Government And Soros

"I do not know if Salvini was funded by Moscow, but the public has a right to know" said Soros.

Soros translated: Any government who puts their citizens ahead of migrants is now a Putin puppet.

The League's economics policy chief, Claudio Borghi hit back against Soros, stating (translated):

"Soros worried by the Italian government? Then it means that we are going in the right direction... We understand that those who have speculated for years on the skin of immigrants, financing NGOs and smugglers to invade Italy. 

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On 6/2/2018 at 11:40 AM, Guillaume Albasini said:

Without the EU european countries wouldn't matter on the world stage and would be reduced to american or russian puppets.

The same that are complaining now about Brussels would be complaining about Washington or Moscow.

 

 

I can't say I have the feeling Romania, Bulgaria, the Baltic States or even Denmark, for that matter, are very important on the world stage even as members of the EU. And we are already puppets, some to more than one puppeteer, but puppets nonetheless.

You're absolutely right about the complaining. People do so love to complain, don't we?

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18 minutes ago, Marina Schwarz said:

I can't say I have the feeling Romania, Bulgaria, the Baltic States or even Denmark, for that matter, are very important on the world stage even as members of the EU. And we are already puppets, some to more than one puppeteer, but puppets nonetheless.

You're absolutely right about the complaining. People do so love to complain, don't we?

If Romania, Bulgaria, the Baltic States or Denmark had to negociate separately with the US on aluminium and steel tariffs they would be far weaker.

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As long as they exported steel to the U.S. :) I agree with your point. However, even with the shield of the EU, many are dependent and not just on the EU for survival and relative wellbeing. it's the way of the world, nothing special or weird about it. The rise of euroscepticism is also normal, I believe, in the current political context. As I like to say, if you swing a pendulum too far in one direction, expect it to come back crashing down in the other one before too long. 

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How can You all seriously think that the EU or the Euro can fail? And why You even think the people decide about Trump, Brexit or what will be the government of Italy or Spain?

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The biggest worry, apart from the spreading populism, is that the two parties forming the government have many disagreements on critical issues for the country. This does not vouch well for a healthy duration of this government, so the trend is likely to continue...

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