By John Galt
July 5, 2011
Two fascinating stories from the same online periodical New Europe which outline the problems the Italian little PIIGSy is running into:
Both stories are from Sunday July 3rd, but approaching each individually is the best way to demonstrate that Italy might be primed to jump ahead of Spain in the “reasons for the ECB to panic” race to the bottom. The Italian banks were already downgraded by the credit rating agencies so any news about austerity measures and the like are simply reactionary floats designed to placate non-governmental bureaucrats who serve at the whims of our Federal Reserve, aka, the credit ratings agencies. The garbage story is much more intriguing however as it indicates the lack of respect for the sovereignty of EU member nations and a clue as to why nationalism might see a sudden resurgence in Europe.
From the second story:
The European Union’s top environment official said on 28 June that he was “very concerned” by Italian authorities’ failure to deal with a garbage crisis in Naples, and warned that he has “little choice” but to pursue sanctions.
The garbage crisis in Naples with litter again piling up on the city’s streets has resurfaced over the past days, despite repeated commitments by authorities to clear the mess.
“I am very concerned that so little, if any, progress has been achieved since 2007 when the European Commission was obliged to open an infringement procedure against the Italian Republic,” Environment Commissioner Janez Potocnik said in a statement.
Potocnik declared himself “encouraged” by pledges from Naples’s newly elected mayor, Luigi de Magistris, to rectify the situation.
However, he warned that the absence of improvements “leaves the Commission with little choice but to actively pursue the infringement procedure”.
In other words, the Italians have never really had the crisis fully under control and the economic difficulties are only going to get worse. It will be further aggravated by the fact that the national government is looking to reduce aid to cities like Naples as foreign sources of borrowing and investment may well be drying up should the Italians fail to get their financial house in order. That is reflected by Prime Minister Berlusconi’s desperate efforts to show the flag and propose €47 billion in cuts over four years copying the same kind of meaningless gestures our own Congress has been engaged in for over a year now. The wealthier northern part of Italy and the leftist parties have already expressed their opinion on the matter as this excerpt from the first story demonstrates:
However, the leader of the federalist Northern League, the government’s junior partner Umberto Bossi, warned that his party’s backing of the plan would be conditional on allowing municipalities in the country’s richer North to spend more on infrastructure and other services.
The main centre-left Democratic Party condemned the measures, with leader Pierluigi Bersani describing them as a “farce”, noting that 80% of the cuts would take place from 2013, when the government’s five-year term of office expires.
Translation from Italian into PIIGS Latin:
Italy is on the same path as Portugal, Ireland, Greece, and Spain for a major financial crisis before the end of 2012 if not sooner