Italy-Europe relationship. Politics seems to count more than numbers

Italy-Europe relationship. Politics seems to count more than numbers
Italy-Europe relationship. Politics seems to count more than numbers
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A critical start to the year for the new governmentnot only due to the complicated economic situation (which has been inherited) but mainly due to the sudden resurrected attention reserved for Italy by the top management bodies of the European financial institutions; at the ECB part of the specialized press is also echoed, even fearing the risk defaultas assumed by Financial Times in recent days.

The real reasons for all this newfound interest towards our country do not exist only because of parameters and stakes largely overrun Europeans time ago; very different dynamics, light years away from finance, unleashed by hawks (which I would define vultures), are permeating the whole of Europe with consequent alarm bells ringing in all Member States.

Before going into the financial details, it is therefore legitimate to ask why up until a few months ago, before the internal political changes, no default let alone any serious alarm activated.

It is usually said that to think evil is a sin but and it is not at all ainvention say that the European institutions do not like a right-wing governmentjust as it is not wrong to say, precisely in light of what is happening today, that Draghi was desired by the European institutions not for tidy up the accounts of Italy but for ferry it and sell it because the default was already written not only financially.

In this regard, I refer to two previous articles (preparatory in order to have a broader view of the topic) at the following links:

18 March 2022 (https://www.nicolaporro.it/economia-finanza/economia/azienda-italia-perche-e-stato-scelto-draghi-come-ceo/)

June 12, 2022 (https://www.nicolaporro.it/economia-finanza/economia/inflation-e-tassi-in-rialzo-litalia-a-un-bivio/).

Going back to what purely concerns the financial part, I don’t think it is complicated to imagine that 2,771 billion euros are a figure negligible and controllablei.e. ours public debt; especially in the light of the multiple rate increases decided by the ECB without taking into account the repeatedly mentioned one Two-speed Europe whose most exposed countries (like ours) are perpetually at risk.

Besides the debt/GDP ratio it is well over the 60% limit (146.8% with a forecast of 147.1% for 2023 according to a study also published by Sole24Ore on 4 November 2022); with these numbers the survival is rather complicated, even more so if we add to all this that i income producers in Italy they represent 60.5% of the population while the remaining part constitutes costs, i.e. retired, inactive and unemployed (7.8%).

Furthermore, it should be considered that many citizens and businesses, included in the aforementioned 60.5%, are in enormous difficulty with a consequent increase in NPL (Non Performing Loans) which are a real thorn in the side for banks and consumer credit companies; effect of this is the credit crunch and the increase of spreads which are in addition to the ECB’s rate decisions.

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The picture is completed with 10% of the population below the poverty line.

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Technically we are at default for a long time and it was thanks to Draghiwhen he was head of the ECB, if we are still alive and it is still thanks to him, or rather to the great trust he enjoys in Europe, if during his mandate Lagarde & Co turned a blind eye and maybe even two.

Europe is stiffened against us for two orders of reasons of which the first is political and the second social and it is the fact that Italy is cornering the EU on the immigration front and what not was in the plans of Germany, Austria and France, just to mention the most neighbors to us.

If we look back, at the Greecewhose history would require a dedicated study, we can see that the effect of troika was the handover of a large part of the infrastructures, such as ports and airports mainly, which ended up in German hands, simply because at the time Germany was one of Greece’s major creditors.

Therefore, the question default it’s more political and financial (despite the numbers), and it will be decided in the button rooms of the European institutions which will, as always, be pressed by the frugal countries so that the constant preferential treatments towards Italy.

However, the last word has not yet been said, especially considering the fact that the EU is subordinate to the lines drawn by the USAas well as Italy, a founding country that occupies a strategic position in the Mediterranean and custodian of many foreign-owned assets.

The final question that should be asked is whether the subjects to whom would agree let Italy fail until one majority or one minorityand especially how much economic power they have.

Antoninus PopeJanuary 9, 2023


The article is in Italian

Tags: ItalyEurope relationship Politics count numbers

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