Quitaly - the Italians are next
Discussion
On the face of it, possibly seismic political goings on in Italy. Could they be the next country to have a euro referendum?
Everybody loves a wail link...
http://www.dailymail.co.uk/news/article-3974792/Th...
Everybody loves a wail link...
Article said:
Next Sunday, the country goes to the polls in a referendum that might well shape the future of Europe, though on the face of it the vote doesn’t appear particularly consequential, concerning as it does constitutional changes to Italy’s equivalent of the House of Lords.
Yet its result has the potential to eclipse Brexit, and possibly bring the threat of EU disintegration closer to reality – while propelling Mr Grillo’s party ever upwards.
The referendum has effectively turned into a vote on the leadership of Prime Minister Matteo Renzi – and if he loses, which looks probable, there are fears it will set in train a sequence of events leading to the country abandoning the single currency, an outcome dubbed ‘Quitaly’.
As David Cameron did over Brexit, Mr Renzi has staked his political future on the vote, saying he will step down if he loses.
And if that happens, Mr Grillo’s Five Star Movement (M5S) already the biggest opposition party, is widely tipped to triumph at the next election. If he wins, the comedian has vowed to hold a referendum on the single currency.
Interesting times.Yet its result has the potential to eclipse Brexit, and possibly bring the threat of EU disintegration closer to reality – while propelling Mr Grillo’s party ever upwards.
The referendum has effectively turned into a vote on the leadership of Prime Minister Matteo Renzi – and if he loses, which looks probable, there are fears it will set in train a sequence of events leading to the country abandoning the single currency, an outcome dubbed ‘Quitaly’.
As David Cameron did over Brexit, Mr Renzi has staked his political future on the vote, saying he will step down if he loses.
And if that happens, Mr Grillo’s Five Star Movement (M5S) already the biggest opposition party, is widely tipped to triumph at the next election. If he wins, the comedian has vowed to hold a referendum on the single currency.
http://www.dailymail.co.uk/news/article-3974792/Th...
I'd love to see Italy and the other Southern European nations out of the Eurozone. The Southern European economies are stagnant and will remain so till a currency revaluation occurs providing an exchange rate that better reflects their economic performances.
Meanwhile in Germany, and possibly in other Northern European nations, exports are booming as these economies are finding their exchange rates damped by the union with the South.
It's a situation that can't last.
If Italy does leave the Euro we'll get much cheaper Alfas and FIATs whilst BMW, Audi, and Mercedes prices will go through the roof.
Meanwhile in Germany, and possibly in other Northern European nations, exports are booming as these economies are finding their exchange rates damped by the union with the South.
It's a situation that can't last.
If Italy does leave the Euro we'll get much cheaper Alfas and FIATs whilst BMW, Audi, and Mercedes prices will go through the roof.
Tannedbaldhead said:
I'd love to see Italy and the other Southern European nations out of the Eurozone. The Southern European economies are stagnant and will remain so till a currency revaluation occurs providing an exchange rate that better reflects their economic performances.
Meanwhile in Germany, and possibly in other Northern European nations, exports are booming as these economies are finding their exchange rates damped by the union with the South.
It's a situation that can't last.
If Italy does leave the Euro we'll get much cheaper Alfas and FIATs whilst BMW, Audi, and Mercedes prices will go through the roof.
Indeed. Devaluation would be a tonic for Italy. It'll be a sharp shock - a few banks will go to the wall and some people will go bust - but the benefits will be long term. Meanwhile in Germany, and possibly in other Northern European nations, exports are booming as these economies are finding their exchange rates damped by the union with the South.
It's a situation that can't last.
If Italy does leave the Euro we'll get much cheaper Alfas and FIATs whilst BMW, Audi, and Mercedes prices will go through the roof.
It is a pity that the issue of Italy's involvement in the single currency has had to turn on this referendum because on the face of it the proposals to cut down the powers of the Italian senate would go a long way to end the continued political stalemate there.
My postal vote is in, and while I think Renzi is a prat I support the reforms.
My postal vote is in, and while I think Renzi is a prat I support the reforms.
r11co said:
It is a pity that the issue of Italy's involvement in the single currency has had to turn on this referendum because on the face of it the proposals to cut down the powers of the Italian senate would go a long way to end the continued political stalemate there.
My postal vote is in, and while I think Renzi is a prat I support the reforms.
So as you've got a bit more of an involvement in this than most, what's your feeling? Aside from the political reforms (which do look sensible on the face of them), do you think Italy is better off in or out of the Euro?My postal vote is in, and while I think Renzi is a prat I support the reforms.
davepoth said:
So as you've got a bit more of an involvement in this than most, what's your feeling? Aside from the political reforms (which do look sensible on the face of them), do you think Italy is better off in or out of the Euro?
Out. Utterly and without a doubt. Italy is one of the European economies that urgently needs the fiscal control to devalue its currency, which it of course cannot.The process of Italy coming out of the single currency can still happen even if these reforms go through. In fact in the longer term it would be more likely as the winning party in an election would not have the move blocked by the senate as could happen now. Kicking Renzi out (assuming he goes) does not mean that Grillo automatically gets in in his place, and the parliaments will still be as awkward to get anything through as they are now if the referendum result is a 'no'.
r11co said:
It is a pity that the issue of Italy's involvement in the single currency has had to turn on this referendum because on the face of it the proposals to cut down the powers of the Italian senate would go a long way to end the continued political stalemate there.
My postal vote is in, and while I think Renzi is a prat I support the reforms.
You are the first person i have heard to vote YES. Every one i meet in Italy is saying NO.My postal vote is in, and while I think Renzi is a prat I support the reforms.
silentbrown said:
A very good article. A seemingly objective summary of the problems. I would not like to put money on which way the vote will go, but I think there is a grave danger the proposed reforms could be (or could be perceived as) a way of actually granting more control to the EU. Putting a nation into a corner like this is never wise.cayman-black said:
r11co said:
It is a pity that the issue of Italy's involvement in the single currency has had to turn on this referendum because on the face of it the proposals to cut down the powers of the Italian senate would go a long way to end the continued political stalemate there.
My postal vote is in, and while I think Renzi is a prat I support the reforms.
You are the first person i have heard to vote YES. Every one i meet in Italy is saying NO.My postal vote is in, and while I think Renzi is a prat I support the reforms.
And on the same basis as R11co, don't like the guy but the reform has to go ahead.
Assuming (and that's a big assumption) that Renzi left following a defeat for the Yes, no party at the moment has the strength required to govern. The M5S is thorn by a scandal on false signatories to many of their petitions and their local administrators, bar a couple of exceptions, are showing an amateurish level of management skills. The center-right is otherwise split between Lega Nord and Berlusconi's party, with neither of them having at the moment neither enough support, nor the organization and harmony required to run a government.
Where my thoughts are different is whether Italy would benefit from leaving the Euro, and here my answer is no. What Italy would need the most at the moment is a proper, well-thought simplification of the tax system, a public sector diet and an improvement of the legal system to make the resolution of disputes, especially business-related ones, faster and more efficient. Being in the Euro provides at the moment, the "discomfort" that could prompt reforms in that direction. Leaving the Euro would mean extreme uncertainty and possible mayhem (look at the uncertainty arising from Brexit, then multiply by 1000). In the long run, assuming that the benefits of a devaluated Lira would materialize, the newly found equilibrium would reintroduce the dreadful practices from late '80s/early '90s that inflated public debt and political mismanagement.
Related perhaps, I was reading a piece on that Steve Eismann guy (immortalised in the big short and by the billion dollars he made shorting sub prime mortgage bonds) and he's turned his attention to his next big short strategy... Italian banks. Banks with masses of non-performing loans on their books marked at what he thinks is too high a value. He reckons these loans are almost worthless but are on the books at 50 cents on the dollar.
Be interesting to see if he is right and pulls the same trick again.
Be interesting to see if he is right and pulls the same trick again.
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff