Italy Bows to Northern Europeans – The Bourbons Avenged
Italy Bows to Northern Europeans – The Bourbons Avenged
(December 3, 2011)
Berlusconi (Italy) bows to the northern dominated European Union
Now that the European Union has sent the Northern League’s favored Prime Minister Berlusconi pack’n, Northern Italians now know that Northern Europeans do not make a distinction between north and south Italy. There is no “Southern Question”, only the “Italian Question”; and that question is essential an Imperial Question about domination and wealth extraction. This will come as a surprise to the tabloid readers, who for years have been reading nothing but Berlusconi gossip. But, it won’t surprise readers of articles in the economic blogosphere, which have been providing objective historical analysis of the Italian political economy. Comparative economic analysis like “Italy and Japan” and extrapolations like “Italy's Future” demonstrate that behind the mindless mass and tabloid media headlines and sound bites, a fascinating nuanced complexity of Italian history and Mediterranean culture can be gleaned.
Introduction
A neurotic compulsive reader of economic blogs (trying to understand why - after all my working years - I’m broke), one of my favorites is “The Street Light” (http://streetlightblog.blogspot.com/) written by economist and economic consultant Kash Mansori. In November, Mr. Mansori posted three very interesting articles about Italy’s economy:
Italy's Future
Italy: Illiquid-but-Solvent
Italy and Japan
No doubt, the economic concepts discussed in these articles will be (have been) debated, and few general readers have the qualifications to judge the accuracy of the facts and the validity of arguments based on complex economic concepts.
Nevertheless, such economic discussions provide fascinating tacit historical insights into the Italian political-economy; if for no other reason, because they break away from the economic clichés of mass media business news (more government spending vs. less) and the ad hominem clichés of tabloid media (à la Berlusconi gossip).
While Mr. Mansori does not categorically state, but to my mind, his argument strongly implies, that Italy’s economic problems are independent of its Prime Minister, indeed its political system as a whole.
Specifically, Italy’s current economic problems are related to Italy’s decision to give up its national currency and enter the Eurozone common currency group of nations. Accordingly, Mansori’s thesis transcends economics per se and places it in the broader context of the history of Italian national sovereignty.
This first act of joining the Eurozone, and thereby relinquishing national sovereignty over its currency, has lead to this months second act of diminished national sovereignty; i.e. having a Prime Minister and budget imposed by non-Italian northern European nationals.
These articles provide factual comparative measures and analysis of the Italian economy. While they make specific recommendations for the Italian economy, they are not, per a recent post-Berlusconi i-Italy article, “Lights at the end of the Tunnel”. More importantly, for purposes of this ‘note’, they demonstrate the intellectual emptiness of equating Italy’s or any national political economy – current or historical - with the personalities, rhetoric and life styles of politicians.
----------
Berlusconi’s “Shocking Measures” – Who’s In Charge of Italy’s Economy?
At the beginning of November, Belusconi, bending to the will of Germany and France, was prepared to submit an Italian “shocking measures” budget. “Shocking measures” understood as drastic cuts in government expenditures.
Mansori writes:
“Italy's Prime Minister, Silvio Berlusconi, is apparently going to propose some "shocking measures"...Most likely (thanks to the urging of Germany and France) these shocking measures will be composed primarily of sharp cuts in government spending. (11/2, emp. +)
To my mind, of historic (vs. purely economic) interest is the role of Germany and France in dictating the Italian national budget.
Also, in the context of Italian national sovereignty, while large amounts of those spending cuts are in social services (e.g.unions protested on 11/18 health care cuts), at the same time NATO nations were demanding increased expenditure for the Italian military (e.g. complaints about Italy withdrawing its aircraft carrier from Libya war to save money, and falling percent of GDP spent on military) – again, the sovereignty issue: France, Germany, and all NATO countries making demands on the Italian (so-called) national budget!
So who’s in charge of Italy’s budget and economy? The Italian people or Germany et al!
High Interest Rates – The heart of the Beast!
Ironically, according to Mr. Mansori’s thesis, Italy’s current economic problem has nothing to do with its national budget expenditures; i.e. the problem has nothing to do with the mass media meme – “spending to much money on social problems” – regardless of Germany and France’s protestations to the contrary.
The French and German demanded “shocking measures”, while having profound affects on the Italian working class, would not have any positive affect on the Italian national economy. Mansori writes:
“[These “shocking measures”] will fail to help. The market is not worried about Italian debt dynamics because of excessive government spending.
It is worried about Italian...skyrocketing interest rate expenses that the Italian government is now facing thanks to the eurozone debt crisis. (11/2 emp.+)
More specifically, money for Italian expenditures such as health care in part comes from international lenders who buy Italian bonds. According to Mansori, these financiers are concerned that Italy will not be able to pay the interest on these ‘loans’. Further, the reason they are concerned about the payment of the interest is because the interest rates are so high.
In short, excessive spending is not the cause Italy’s economic problems; rather, the excessive cost of borrowing money, i.e. interest rates.
Further, Mansori places the root of the high interest rate problem with the Eurozone; i.e. the cause of the “excessive borrowing cost” has to do with Italy being a member of the eurozone counties (again: the sovereignty issue – Italy suffers the consequences of decisions made by non-Italian eurozone nationals)
High Interest Rates – Why Italy and not Japan?
The most surprising fact presented by Mansori is that Italy has some significantly better economic measures (e.g. Budget and Gross National Product) than Japan, and Italy’s economic growth is no worse than Japan. Nevertheless, Italy suffers greater negative economic consequences than Japan.
Mansori wonders:
“Given how much worse Japan's public finances look when compared to Italy's, [why do] yields on Japanese 10-year government bonds hover around 1.0%, while the Italian government is forced to pay nearly 8.0% to borrow money for 10 years.
“What explains the dramatic disparity in investor willingness to lend to Italy compared to Japan?(11/29, emp.+)
This is to say: Why does Italy have to pay 8% to borrow money and Japan only 1%?
To “explain the disparity”, Mansori posits “three crucial differences between Italy and Japan.” Two of them have to do with strictly economic variables involving “balance of payments”.
However, for purposes of this note, I will only consider the first difference because it entails a broader social history issue and the other two economic variables are contingent upon the first.
Specifically, interest rates have to do with national currency, or lack of in the case of Italy. Mansori:
“Japan has the ability to create its own currency, while Italy does not.”
This helped to cause the crisis...by giving up its own currency, Italy lost the important backstop on its government borrowing costs that countries that can borrow in their own currency have. This was a key prerequisite for this crisis to take hold. (11/29, emp.+)
In short, Italy’s historic decision to take part in Europe’s transnational experiment and becoming a member of the Eurozone, which entailed giving up its own currency, has had significant negative economic implications.
The Bourbons Avenged
“Injuries are revenged; crimes are avenged.” Samuel Johnson
In 1861 the northern-Italian Piedmontese sent their northern-European financed armies to commit despicable unspeakable crimes against the Kingdom of the Two Sicilies. In turn, the northern-European’s gained significant economic rewards such as England’s Sicilian sulfur monopoly.
While the Italians celebrate the 150th anniversary of the Piedmont Crimes, the northern Europeans, toasting with the Italians and relishing their naiveté, are still extracting the rights, resources and sovereignty of Italy.
They took away Italy’s currency and the economic prerogatives associated with a national currency.
They have asserted the right to pick a Prime Minister and dictate the Italian national budget.
They lend money to Italy at exorbitant interest rates, paid for with Italian working-class pain and suffering.
In 1861 Northern Italians thought northern Europeans were allies. Now Northern Italians are coming to know what the South always knew. The people from the EurAsian Steppes relentlessly push south. They came on horseback with axes and arrows; they came in airplanes with bullets and bombs; and they come now in limousines with laptops and ledgers. For two thousand years the northern hordes have coveted and invaded Italy and the Mediterranean.
The Bourbon’s Ghost can rest – savoring the irony and feeling avenged!
DISCLAIMER: Posts published in i-Italy are intended to stimulate a debate in the Italian and Italian-American Community and sometimes deal with controversial issues. The Editors are not responsible for, nor necessarily in agreement with the views presented by individual contributors.
© ALL RIGHTS RESERVED - RIPRODUZIONE VIETATA.This work may not be reproduced, in whole or in part, without prior written permission.
Questo lavoro non può essere riprodotto, in tutto o in parte, senza permesso scritto.
Add a comment
-
This Blog
-
ABOUT THE AUTHOR
Most Commented
