Recent Items

Some Mainstream Italian Parties Now Advocating Euro Exit

Watching the Eurozone limp along has proven to be an instructive exercise in how long political and financial legerdemain can keep a fundamentally untenable situation going beyond its sell-by date. European technocrats managed to avoid forcing writedowns and restructurings upon banks but the price of that maneuver was heavily-indebted national governments, low growth, and rising risk of deflation. Now, the biggest existential risk to the Eurozone is that Germany continues to insist on contradictory things: it wants to continue to export to the rest of the Eurozone, yet is unwilling to finance its trade partners, which is a requirement of running persistent trade surpluses. Yes, there’s been discussion of measures such as an infrastructure bank that if done on a big enough scale and with fiscal spending, could provide enough stimulus to the periphery countries to serve as a quasi-Federal overlay and reduce the importance of German exports in the Eurozone economy, thus also reducing the pressure of financing them. But as we discussed, that proposal is long on optics and short on viability.

Many analysts have come to believe that the big danger to the Eurozone is political, not economic, that the loss of sovereignity, the continued squeeze of ordinary workers and the inability of countries to depreciate their currencies to help exports, make the benefits of Eurozone membership look questionable relative to the costs. But most political commentators have downplayed this risk, arguing that the benefits of Eurozone membership are so large that no incumbent would relinquish it. And indeed, the noise-making has come from parties like UKIP, who have no realistic odds of forming a government. Up until now, France’s Marine Le Pen, leader of the National Front, has seemed like the most likely contender among Eurozone-exit-favoring party leaders, but she is seen as more able to move France’s Overton than get France out of the Eurozone.

But Wolfgang Munchau, in the German edition of Der Spiegel, argues that a real shift has taken place in Italy. Unlike other countries, where the anti-Eurozone parties are seen as fringe players, in Italy, two factions that could realistically rule are both pushing for leaving the Eurozone.

From Munchau’s article, translation courtesy Google Translate:

One of the reasons why we even have the euro, was the broad political consensus in all countries who would later take part in it. No matter whether government or opposition, they were all for it. Just the consent of the opposition parties was important because in the course of 15 years, all have times over the government – the SPD in Germany, and the Socialists in France and Spain. The euro has characterized the many changes of government since its inception nearly 16 years ago survived.

With the euro crisis, this consensus has relativized. In Germany the government and opposition are still largely for the euro. In France, it is formally the same way. Only the Front National is there, however.

Unlike in Italy. There are now all opposition parties against the euro. First, the does not mean anything. The Italian Social Democrats under its chief Matteo Renzi have a large majority in parliament. And they enjoy a great, albeit not overwhelming support in the population. But in democracies oppositions come eventually to the government. And then of course it is important to know whether such a government would implement its anti-euro policy.

The five-star Party, the largest opposition party, had spoken before the European elections for a referendum on the euro. The party was by then EUR critical, but the positions were not then as hard as now. Party leader Beppe Grillo has revealed its stance recently. His party, the euro zone as soon as possible to leave.

In the regional elections in the northern Italian province Emiglia Romana Although Renzis party won almost, but the Northern League came on 30 per cent, which no one would have expected. The Lega is not just for a separation of northern Italy and southern Italy. It is now also include a separation from the euro. And this position was rewarded by voters.

Italy’s exit would be the worst of all scenarios

And that has now brought Silvio Berlusconi on the taste. Really friendly europe Berlusconi was of course never. Opportunistic as it is, after all, he is now the future of the euro in question. Moreover, he and his party Forza Italia, the second largest in Italy, have an elaborate plan. Berlusconi wants to win back the monetary sovereignty by introducing home a parallel currency which is freely traded against the euro. Wages and salaries and of course the prices in the shops would be enrolled in this new currency.

One would exchange their legacy euro and the new Italian Euros first one to one. Then the new currency would be released, whereupon its foreign currency would collapse immediately, probably 30 to 50 percent. The Italian economy would be competitive again with one blow.

For the rest of the euro zone, such a withdrawal of Italy would be the worst of the crisis scenarios. The country is no longer effective growth in the euro since the entry. Unemployment is high. Youth unemployment frightening.

The anti-euro strategy of the opposition One should therefore not be dismissed as pure demagogy or populism. An exit from the euro would technically solve the Italian problem at a stroke. The companies would be competitive again. It would also convert the debt to the new currency, because otherwise the act would not be worthwhile. The foreign owners of Italian government bonds would have to accept a loss.

Yves again. The 30% vote in regional elections for the Northern League was a surprisingly strong comeback. From the Telegraph a year ago:

The new head of Italy’s Northern League party has called for full independence for the wealthy north of the country, and described the euro as a “crime against humanity”.

The Northern League, which was a coalition partner in Silvio Berlusconi’s last government but is now out of power, is looking to rebuild its support base at the European Parliament elections in May with an increasingly strident anti-EU message.

The party is one of several Right-wing, anti-EU movements that hope to win votes at the May elections amid a surge of discontent with the EU, the economic crisis and austerity policies.

The party was discredited in the last year by a corruption scandal which forced the resignation of its former leader, Umberto Bossi…

n recent years the Northern League had moderated its original demands for independence for “Padania”, its designation for a collection of regions in northern Italy including Lombardy around Milan, Piedmont on the border with France and Switzerland and the Veneto, which includes Venice…

At the height of its success, the League won 10 per cent of the national vote, but the corruption scandal, and a rift with Mr Berlusconi’s People of Freedom Party, meant that in February’s general election it gained just four per cent.

Even though the Northern Front showing was troubling, the real cause for pause is Forza Italia not merely advocating a Eurozone departure, but putting forward a credible plan. And remember, Ambrose Evans-Pritchard has long deemed Italy as the country most able and likely to leave the Eurozone. And as he pointed out in October, Italy’s economic situation is only getting worse, and Eurozone policies are only making a bad situation worse:

Mr Renzi….snatched power in an internal party coup in February…on the assumption that Italy had touched bottom after six years of depression, a 9.1pc fall in output, a 24pc crash in industrial production, and youth unemployment of 43pc.

He believed the mantra, so widely put about, that Europe was on the cusp of a fresh cycle of self-sustaining recovery, lifted off the reefs by world growth, and that all he had to do was to float on the rising tide. Instead, it has crashed back into slump…

Italy is already in a triple-dip recession, its output back to levels first reached fourteen years ago. The OECD says the slump will drag on through most of next year. Growth will be just 0.1pc in 2015…

Antonio Guglielmi from Mediobanca warned last month, that this is “catastrophic for the finances of the country”. The debt will automatically rocket towards 145pc next year (under the old measure, cut to 140pc under new accounting rules). “It is going to take a nuclear bomb to turn this around. If Draghi ends up doing almost nothing, Italy is dead,” he said.

This is not a moral failing by Italy over recent years. It is a mechanical “denominator effect”, the result of a rising debt burden on a shrinking base of nominal GDP.

The point is very simple. The average interest rate on Italy’s public debt is still around 4pc, so interest payments are near 5.5pc of GDP. Unless nominal GDP grows at the same speed, the debt ratio must keep going up. Structural reform is no doubt desirable as an end in itself, but it has nothing to do with the matter at hand.

Italy’s current crisis is ENTIRELY due to monetary policy failure and the refusal of the ECB to meet its inflation target, or to comply with its own Lisbon Treaty obligations to support growth. (And yes, it does have a dual mandate under EU Treaty law.) The more that Italy carries out drastic reforms in these circumstances, the worse it will get. The short-term effects of reform are famously contractionary.

The right ing parties advocating a Eurozone exit is a sign that the Italian business community is coming to the point of view that the cost of membership outweighs the benefits. And Munchau warns Der Spiegel readers that they are right. He correctly points out that a departure is not imminent but when a conservative coalition wins an election, it will move either to depart the Eurozone or extract large waivers in order to remain. But the Eurocrats seem so conditioned to rely on “kick the can down the road” crisis responses that they are unlikely to take steps to alleviate mounting economic stress and resulting anti-Euro political resolve in Italy.

Print Friendly, PDF & Email

48 comments

  1. Working Class Nero

    The mainstream right in Italy are faking it –my money is on France bailing first. In 2017, if Sarkozy is in the second round of elections against Marine Le Pen (MLP), then she has a slight chance. The Socialists (PS) are dead and are losing their working class members in droves to the National Front. Most of the remaining PS bourgeois diehards would have no problem voting for the Right (UMP) if it is Alain Juppé running. But getting them to vote for the more likely candidate, Nicholas Sarkozy, would be like trying to get DKos people to vote for George W Bush. So most wealthy leftists will sit it out. In fact as time goes on the two mainstream parties, PS and UMP, will merge into one large UMPS in order to face off with an ever more powerful Front.

    But realistically, since anti-EU opinion has not yet coalesced, it will be 2022 when MLP takes power and therefore around 2023 when France leaves the Euro. Hopefully at that time Spain and Italy will also leave. Time is on MLP’s side; things are only going to get worse with the Germans at the helm of the EU. And as the obvious destructive nature of neoliberal globalization becomes undeniable, the UMPS will increasingly mimic her policies but that will only end up testing the slightly modified adage that if you give the electorate a choice between a real Frontist and a Frontist-lite, they will choose the real one every time.

    Here is what AEP had to say about MLP back in June 2013:

    Mrs Le Pen is a single mother of 44, more relaxed about gay rights and abortion than she lets on, closer in some ways to the assassinated Dutch populist Pim Fortuyn than to her cantankerous father Jean Le Pen, who stepped down as party leader two years ago. Mr Le Pen in turn deplores her eclectic modernism as an overlay of “petit bourgeois” views picked up in Paris schools.

    She has carried out a quiet purge of the Front, pushing known anti-semytes to the sidelines. Vichy nostalgia is out. While her father called the Holocaust an historical “detail”, she calls it the “pinnacle of human barbarism”. She courts Jeuish favour, aiming her fire at Jihadists instead. “Political parties are like people. There is adolescence when you do do crazy things, and then maturity. We are now ready for power,” she said.

    This campaign of “dédiabolisation” or image detox seems to have worked. Only a minority of voters still thinks the Front is a “threat to democracy”. Mrs Le Pen is winning over white working class women in droves. The feminized Front is no longer the party of the angry white male. The softer image is why finance minister Pierre Moscovici describes her as “more dangerous than her father”.

    It is her defence of the French welfare model and her critique of capitalism that gives her a Leftist hue — some call it 1930s national socialism — so far in outlook from Britain’s UKIP. She sounds like Occupy activists in her attacks on high finance and the way corporations profit from labour arbitrage, playing off wages in the West against cheap labour in Asia. “It is the law of the jungle,” she said.

    Nor is she on the UKIP page with her broadsides against Washington and Nato, or her call for France to retake its place as “non-aligned” voice in a multipolar world. It is an anti-Atlanticist patriotism.

    She claims to be the true heir of General Charles de Gaulle, accusing the Gaulliste UMP party of selling its soul to Europe and the Anglo-Saxon order. “There was a de Gaulle of the Left, and a de Gaulle of the Right. There were two de Gaulles. We stand for both,” she said.

    Mrs Le Pen said the Socialists are in melt-down, victim of their own subservience to EU economic doctrines, while their barrage of attacks on Germany’s Angela Merkel smacks of a dependency syndrome. “They whine about Chancellor Merkel, the wicked enforcer who metes out punishment, but Merkel is merely defending the interests of Germany, which are not the same as ours.”

    She said the EMU crisis is structural. North and South need different exchange rates. “The D-Mark would be rising if it were not for the euro, and that means Germany has a chronically undervalued currency. The euro is far too strong for France, and it is eating away our competitiveness,” she said.

    It is hard know whether the French people would ever vote en masse for an all-out clash with Europe, let alone for her Jeanne d’Arc messianism. Yet the longer the economic slump goes on, the greater the risk for Brussels and Berlin that French patience will snap, setting off one of those eruptions that have punctuated French history through the ages.

    http://www.telegraph.co.uk/finance/financialcrisis/10151286/Frances-triumphant-Joan-of-Arc-vows-to-bring-back-franc-and-destroy-euro.html

    1. Fair Economist

      If Marine Le Pen is really the only party leader talking economic sense it’s pretty inevitable she’ll come to power at some point. Since the “Socialists” have abandoned socialism and she’s actually espousing some real leftist positions she is going to draw off much of the traditional support for the left. I hope the move away from the vile social policies the Front has espoused is genuine.

    2. proximity1

      This has happened before. If recent history is any guide, a second-round presidential race which pits Sarkozy (UMP) against Marine Le Pen (FN) would result in the majority of present and former Parti socialiste voters splitting between abstaining or voting for (in this scenario) Sarkozy, just as they did when the nation woke up to the shock of Jean-Marie Le Pen (Marine’s father) facing Jacques Chirac in round two of the 2002 presidential election.

      Much has happened since then, of course, and part of it has been a change (hardening against) in the public’s attitudes toward all political parties– but relatively rather to the benefit of the FN under Marine Le Pen, it is true; exactly how much benefit remains unclear and, until tested in a fresh case it’s now less clear that Sarkozy would walk away with the race today as Chirac then did in 2002.

      The fact remains, however, that, once the Euro currency and Brussels are removed from any imagined scenario, the FN is a party which is, for the vast majority of practical intents and purposes, economically as RIght-wing, if not, indeed, moreso, than Sarkozy himself or the UMP generally. Whatever naive beliefs among the French that a FN government would actually operate to protect and promote the interests of the poor and most vulnerable against the antagonistic interests of the rich and powerful would probably not survive real-world experience very long.

      1. Working Class Nero

        Please post anything you have on MLP having “right wing” economic policies.

        Here are two quotes that state quite the opposite. The first is from Bill Mitchell (you can find these by googling a portion of the quote):

        On November 20, 2011 – the Financial Times article – Le Pen calls for France to quit euro – reported that Marine Le Pen, daughter of Jean-Marie and his successor as the leader of France’s far-right National Front:

        … has made abandoning the euro one of the pillars of her presidential election campaign, launching a powerful attack on the ailing single currency as she seeks to bolster her already strong showing in the opinion polls.

        Presenting her “presidential project”, Ms Le Pen said Europe should give up the euro, which had “asphyxiated our economies, killed our industries and choked our jobs” for years, as well as causing France to accumulate “Himalayan” debts. In any case, she added, the country should prepare a planned exit from the currency union. “We need to anticipate the collapse of the euro rather than suffer from the collapse of the euro,” she said in a television interview on Sunday.

        She also said that “she would empower the Bank of France to lend to the treasury” to reduce the call on private debt markets.

        These are policies that enlightened progressive left-wing parties should be championing. As I noted the other day, the populist parties that are gaining increasing attraction in Europe at present meld these “progressive” economic policies with what I would call non-progressive cultural and social agendas (anti-gay marriage, tough on law and order etc).

        The fact that movements like the French National Front is pushing the only sensible strategy for the French economy is a sign that the left in that nation has failed.

        Now of course any politician can flip 180 degrees once elected (Hollande) but all we have to go on here is stated policies. Here is another quote, this time from Bloomberg:

        The Far-Left Economics of France’s Far Right.

        The right-wing National Front (FN) has become France’s most popular political party, as its leader Marine Le Pen capitalizes on voter anger over the country’s sagging economic fortunes.

        What’s more surprising is that FN has a plan to fix the economy that in many ways resembles a leftist manifesto. Nationalizing banks, raising protectionist trade barriers, handing out cash to low-paid workers—they’re all part of the platform developed by Le Pen, 45, who took over leadership of the party two years ago from her father, FN founder Jean-Marie Le Pen.

        “The FN used to hobble along on one leg,” talking only about immigration and crime, which were its signature issues, Marine Le Pen says in an interview at the party headquarters in suburban Paris. “When you go from 10 percent to 25 percent in the polls, you are a real party, and you need to behave that way. I’ve immersed myself to give visibility to the economic and social program, to build a real platform on these issues.”

        [clip]

        Le Pen says France has been “left alone, naked” to face unchecked globalization. She wants France to leave the European Union and pull out of the euro currency so it can keep tight controls on imports while devaluing its currency “to relaunch exports and employment.” The FN platform calls for a 3 percent tax on all imports that would be used to give a €200 ($270) monthly bonus to the country’s lowest-paid workers.

        She also wants the government to play a stronger role in managing the economy—for example, by temporarily nationalizing banks and forcing them to “clean up” their practices. “We still believe in free markets,” she says. “The danger is ultra-liberalism, where financial markets impose all the rules.”

        These economic policies do NOT seem very right wing to me….

        1. Chris in Paris

          WCN, you’re right and I was frankly more than surprised when MLP started up with the economic populism but then realized that it is consistent with the FN’s views on globalization, immigration and “criminality”. She’s really trying to convince people that this is a party that can govern. I don’t believe her.

        2. susan the other

          I like Marine Le Pen a lot. If she were here, say running against Hilarious, I’d vote for her. She makes very good sense. One of the things I really like about her is her resistance to globalized trade and the TTIP – which would leave France without tariff protections. And just that point alone is enough to vaporize the EU because if France leaves it doesn’t help Italy, or Spain, or Ireland. They too will have to make the hard choice to become nationalists again. Prepare to hear all sorts of slurs against the nationalists invoking the image of Hitler. The nationalists are the biggest threat to the internationalists. Still. It is probably the bottleneck in a nutshell because each side thinks they have the political answer. I have not seen any evidence that the internationalists can solve anything, so I enjoy the politics of Ms. Le Pen.

        3. proximity1

          I think you’re lost in confirmation bias. Try reviewing the origins and development of the party–

          “The FN springs from an extreme right-wing tradition in France that dates back to the French Revolution of 1789,[12] and the party rejects both the revolution and its legacy.[13][14] One of the primary progenitors of the party was the Action Française, founded at the end of the 19th century, and its descendants in the Restauration Nationale,[15] a pro-monarchy group that supports the claim of the Count of Paris to the French throne.”

          Ordre Nouveau was a far-right movement created on December 15, 1969. … In June 1972, Ordre Nouveau joined with Jean-Marie Le Pen’s movement in the Front National. José Bruneau de La Salle joined the political bureau, while Jean-Claude Nourry, Patrice Janeau and Michel Bodin left the movement. On October 5, 1972 the Front National was formed.”
          http://en.wikipedia.org/wiki/Ordre_Nouveau_(1960s)

          Parti des forces nouvelles (PFN) or Party of New Forces[1] was a French far right political party formed in November 1974 from the Comité faire front, a group of anti-Jean-Marie Le Pen dissidents who had split from the National Front (FN).

          Development
          The group included amongst its early members most of the membership of Ordre Nouveau, which had dissolved not long before the formation of the PFN, Alain Robert (the founder of Occident and the Groupe Union Défense or GUD), the academic Pascal Gauchon, the journalists François Brigneau and Roland Gaucher and the draughtsman Jack Marchal[citation needed]. A youth movement, Front de la jeunesse, was formed, although the party was also closely linked to GUD[citation needed]. The ON militants had formed a group called the Faire Front and in September 1973 merged into the Front National, isolating leader Jean-Marie le Pen by taking two-thirds of the seats on the party’s national executive[citation needed]. However in a court case that followed Le Pen succeeded in gaining the upper hand, forcing the group to split from his party and establish the PFN as an alternative group in 1975.”
          http://en.wikipedia.org/wiki/Parti_des_forces_nouvelles

          Through turbulence and schism, the people who’ve come and stayed or those who have come and have since left present us with a picture of a party which finds its sources almost exlusively in right-wing or, yet more, far right-wing, groups and individuals. Today, you find most former FN leaders aligned with either the mainstream right-wing UMP or some other more right-wing party. Just as it is from these same that it still draws new members. Those new members of the disaffected left are examples of people who, in desperation, are simply seeking some alternative to the pseudo left-wing creations which, yes, have failed them–and us.

          “Sur l’axe gauche-droite” [ About the Left-Right axis ] ( http://fr.wikipedia.org/wiki/Front_national_(parti_fran%C3%A7ais)#Sur_l.E2.80.99axe_gauche-droite )

          Now, try reading about the profiles of the party’s executive committee members–where they came from in politics and business. http://www.frontnational.com/fonctions/bureau-executif/

          ——————
          This excerpt is from the French Wikipedia main page on the Front National:

          Jean-Marie Le Pen a défini son parti comme appartenant à ce qu’il appelle la « droite nationale » ou la « vraie droite ». C’est dans cette logique que sa première délégation au Parlement européen était celle du Groupe des droites européennes. Dans ses discours, en revanche, Jean-Marie Le Pen prétend que le FN n’est « ni de droite ni de gauche » ou encore qu’il est « socialement de gauche et économiquement de droite »180. Marine Le Pen affirme elle aussi que le Front national n’est « ni de droite, ni de gauche »181. Les membres du FN ont par ailleurs tendance à remettre en cause l’axe gauche-droite, notamment en critiquant la proximité et l’interchangeabilité des partis de gouvernement, à travers des expressions comme « La Bande des quatre » ou « UMPS ».

          ——————–

          While the following (which you may either read here or at the full text source or via Google’s translate pages) are excerpts from an article –confirming my views on the FN’s actual current and historical right-wing roots and orientations–by Sylvain Crépon,

          “Le Tournant anti-capitaliste du Front National. Retour sur un renouveau idéologique des années 1990″
          [ The Anti-capitalist pivot of the National Front. A Look back on an ideological renovation of the 1990s” ]

          http://tempspresents.com/2010/04/25/sylvain-crepon-tournant-anti-capitaliste-du-front-national/

          … …

          Le GRECE ( (Groupement de recherche et d’étude pour la civilisation européenne ), principale source d’influence du FN

          “Créé le 5 octobre 1972, le Front national illustre à ses débuts la nostalgie du combat contre la décolonisation, son comité de direction regroupant d’anciens partisans de l’Algérie française, issus notamment de l’OAS. La première ligne politique de ce nouveau parti se situe contre l’« égalitarisme utopique » et le « cléricalisme marxiste », en un mot, contre « toutes les doctrines supposées contraires aux lois d’un ordre naturel » [Chebel d’Appollonia, 1988]. Cette ligne l’amène à axer son combat sur la défense de l’identité de la France – l’opposition à l’immigration devient centrale dès la création du mouvement – ainsi que – pour le thème qui nous intéresse – sur la libre entreprise et la libre concurrence. La lutte contre le communisme et le ralliement atlantiste qui la sous-tend devient son autre grand axe idéologique. C’est ainsi que Jean-Marie Le Pen fait de Ronald Reagan, dans le courant des années quatre-vingt, son modèle politique (ils se rencontrent en 1987 aux états-Unis) en louant son conservatisme politique et l’ultralibéralisme de sa politique économique.”

          … …

          L’antimatérialisme économique

          “Le Front national a également puisé au sein du GRECE la thématique de l’anti-utilitarisme marchand. Celui-ci ne renvoie évidemment pas à un discours égalitariste. tout comme pour le GRECE, le matérialisme est condamné en ce qu’il détourne les individus des valeurs spirituelles de la nation – l’enracinement dans la terre et les traditions – qui constituent pour l’extrême droite le fondement de l’humain. Le programme du Fn en cours dans les années quatre-vingt-dix le résume en ces termes : « Comment ne pas voir que cette conception de la vie économique [celle du « libre-échangisme », selon la terminologie lepéniste] menace de disparition un univers où les hommes se réunissaient au sein de communautés historiques, y bénéficiaient d’un héritage, d’un patrimoine et de qualités propres, pour lui substituer un monde organisé selon des concepts et des mécanismes abstraits, détachés des réalités physiques, culturelles, sociales, nationales ? C’est l’idée même de nation que cette entreprise d’uniformisation met en péril » [Front national, 1993].

          “Désormais, l’antimatérialisme économique du Front national se conjugue avec la condamnation du processus de la mondialisation économique. Pour le président du Front national, le « mondialisme » correspond en effet à une « doctrine » qui « subordonne la terre entière aux dogmes mercantiles et finalement à une idéologie totalitaire sous des dehors libéraux », celle-ci semblant de surcroît « vouer la terre à une uniformité réductrice » [Le Pen, 2003b]. Un discours que ne renierait pas A. de Benoist, qui condamne tout aussi fermement et dans des termes très proches ce processus de globalisation. De par les flux migratoires, la concurrence interplanétaire et le modèle unique de développement économico-politique – lié au consumérisme effréné qu’elle génère –, la globalisation est perçue comme le vecteur d’un matérialisme menaçant à terme l’intégrité culturelle des nations. L’imposition d’une concurrence économique effrénée, à laquelle s’ajoutent des limites sans cesse croissantes à l’action régulatrice des institutions politiques, est donc moins synonyme de paupérisation et d’inégalités sociales que d’une remise en cause des communautés organiques traditionnelles. L’ultralibéralisme n’est en ce sens pas critiqué au nom de valeurs égalitaristes, le programme économique du Front national étant pour l’essentiel d’essence libérale avec une forte propension protectionniste.”

          … …

          Conclusion

          “On conviendra que le processus de la mondialisation peut susciter des inquiétudes légitimes de par son modèle unique de développement économique et social faisant fi des particularismes culturels. Mais c’est oublier un peu vite, comme le rappelle B. Barber [1996, p. 122], qu’il est avant tout susceptible d’avoir des incidences sur les principes démocratiques en « abandonnant le bien commun aux mains du secteur privé », en « subordonnant l’intérêt public aux intérêts particuliers » et en s’émancipant de l’espace d’action des démocraties – les états-nations ou les entités supranationales telles que l’Union européenne. Autant de thématiques qui n’intéressent pas Jean-Marie Le Pen. Seule compte à ses yeux la préservation des caractères spirituels de la nation, son homogénéité ethnique. Principes en vertu desquels doit se structurer la vie politique de la nation, impliquant, implicitement ou pas, l’éradication des valeurs démocratiques. De surcroît, le rejet des clivages politiques et sociaux articulés autour de la gauche et de la droite – au travers desquels s’est structuré le pluralisme républicain – illustre cette tentative de marginalisation de la pluralité politique.

          “Il faut néanmoins convenir que le Front national s’est adapté très intelligemment aux bouleversements de son époque, ce qui lui a permis de rester omniprésent sur la scène politique. Ainsi, son discours identitaire est apparu dans un contexte où la question du rapport à l’Autre a constitué un des enjeux politiques les plus importants depuis la dernière décennie. En témoignent les questions liées à l’immigration – sans-papiers, multiples réformes du Code de la nationalité, double peine, modèles d’intégration –, à l’identité de la France au sein de l’Union européenne, au port du voile islamique à l’école publique, etc., qui depuis vingt ans ne cessent d’émailler le débat politique français et que le Fn amplifie en retour. De plus, son rejet des clivages politiques et sociaux a correspondu avec un contexte politique dans lequel ceux-ci ont tendance à devenir effectivement flous dans les représentations des individus.

          “Si peu de doutes peuvent être émis sur le fait que le Front national est effectivement un parti d’extrême droite dont l’idéologie s’applique à saper les fondements démocratiques, son adaptation aux problématiques économiques et politiques actuelles contribue sans aucun doute à rendre légitime une partie de son discours auprès d’un électorat précarisé qui, ne se reconnaissant plus dans l’offre politique traditionnelle, est susceptible de se sentir abandonné par les instances tant politiques que publiques. ne se voyant manifestement pas proposer des outils susceptibles de se situer politiquement par rapport aux nouveaux enjeux utilitaristes de la mondialisation, cet électorat peut dès lors être tenté de se tourner vers les identités communautaristes les plus grégaires. Avec le risque qu’elles soient perçues comme l’ultime alternative efficace face à un monde où le règne d’une dérégulation toujours plus grande, en plus d’accentuer la paupérisation, déstructure effectivement les liens sociaux, qu’ils soient culturels ou politiques. C’est donc de leur capacité à mobiliser cet électorat déshérité, principal perdant des nouvelles formes de l’utilitarisme marchand, que dépendront les succès ou les échecs des mouvements progressistes attachés aux valeurs démocratiques, face à la double menace de la globalisation effrénée et de l’irrédentisme identitaire.

          http://tempspresents.com/2010/04/25/sylvain-crepon-tournant-anti-capitaliste-du-front-national/

          ——————

          And here, VoteWatch Europe’s page on Marine Le Pen’s European Parlement page here (with her voting record profiled) : http://term7.votewatch.eu/en/marine-le-pen.html

          1. Working Class Nero

            Thanks for the history lesson but it’s almost 2015 and there’s a new FN in town.. Let’s just stipulate for the record that before 2012 I would never have advocated voting FN. On my Facebook page I often see Republicans making similar appeals to the historic record (albeit on a longer time scale) by saying blacks should vote for them because they defeated slavery and the Democrats fought them every inch of the way.

            1. proximity1

              RE: “On my Facebook page I often see Republicans making similar appeals to the historic record (albeit on a longer time scale) by saying blacks should vote for them because they defeated slavery and the Democrats fought them every inch of the way.”

              In other words, despite my invitation to acquaint yourself with the facts in
              the profiles of the party’s current executive members, you couldn’t be bothered
              so you skipped it, preferring not to know. “History”? U.S. Republican party
              clumsy PR attempts to brand the present-day U.S. Democratic Party with is
              slave-state Southern identity? This is supposed to counter the the actual facts
              concerning the backgrounds of current high-level FN party members? Let’s just stipulate that you’ve consclusively shown that my charge, above, that you are lost in confirmation bias is exactly right.

              All you’ve offered is some pronouncements from Marine Le Pen which,
              superficially, indicate that the party is really, really on the side of the poor
              and disadvantaged—which, in a certain very narrow and peculiar sense, it is,
              that is true. What you’ve done is leapt from there to the rather desperately
              wishful thinking (all confirmation-bias supported) which concludes that, somehow, unlike all our experience with other politicians, once in power, the FN will actually champion the poor and disadvantaged against the rich-er, richest, etc.

              For others here, on the Left, who are paying attention– do you see why the American left is still wandering in the wilderness?

        4. proximity1

          RE: “Please post anything you have on MLP (*) having “right wing” economic policies.”

          And so I have. Let’s see if it ever gets onto the page here at some point.

          [ (*) My comment and its claims concerned the party, by the way, and not Marine Le Pen herself or herself alone. You’ve moved the goal-post in implying it was otherwise. ]

          1. Working Class Nero

            Is there any real distinction now between MLP and the FN? I use them interchangeably as do the articles I posted. So I don’t think any goalposts were shifted unless you were planning to post the old economic policies of Jean-Marie Le Pen.

            1. proximity1

              I attempted an answer to this reply (refers to yours of 3:17 p.m. above) of yours. As usual, the post didn’t “take,” which, given my experience here, I expected, so I’d taken the precaution of saving it. If it doesn’t show up after a while, I’ll try to re-send it.

            2. proximity1

              “Is there any real distinction now between MLP and the FN?”

              The short and honest answer is, “We don’t really know yet.” The only actual evidence we have of what the FN really does when in positions of governing authority is still very limited to the level of municpalities and departmental governance where, so far, the policies are far from conclusive. Instead, they indicate only very small and largely symbolic departures from the kind of conservative rule that is typical of mainstream local elected officials.

              I will admit that Marine Le Pen’s public speaking is indeed emotionally appealing. She does speak well— that is, she does say things openly, and as though she really believes them, which I so wish those of the Left would say and have said resolutely a hell of a long time ago–when, by the way, neither Marine Le Pen nor her father, Jean-Marie, were saying them either.

    3. lee

      This reminds me of the hypothetical alliance between right and left in the U.S. foreseen as a possible development by Robert Reich in his book Aftershock. Given the corporatist trajectory of globalization, toward a kind of rootless, feudalism with neither borders nor accountability, people may opt for re-empowering their respective governments in what would currently be considered draconian ways in a bid to achieve some greater degree of economic security.

      “The platform of the [hypothetical] Independence Party, as well as its message, is clear and uncompromising: zero tolerance of illegal immigrants; a freeze on legal immigration from Latin America, Africa and Asia; increased tariffs on all imports; a ban on American companies moving their operations to another country or outsourcing abroad; a prohibition on “sovereign wealth funds” investing in the United States. America will withdraw from the United Nations, the World Trade Organization, the World Bank, and the International Monetary Fund; end all “involvements” in foreign countries; refuse to pay any more interest on our debt to China, essentially defaulting on it; and stop trading with China until China freely floats its currency.

      Profitable companies will be prohibited from laying off workers and cutting payrolls. The federal budget must always be balanced. The Federal Reserve will be abolished.”

    4. Alcofribas

      Sorry WCN, I believe you miss several points concerning National Front in France :

      – it is a family business (starting the party with the hate of the foundator Jean-Marie LePen for parisian politicians that led Algeria to become independent), with Marine and her man, Mr Alliot, with Marion Marechal LP (grand-daughter of Jean-Marie LePen) at the head. Imperialism isn’t dead in their heads, it’s a dynastic conservative project.
      – absolutely no economical competence at all to explain how the Franc could not be massively devaluated, helping exports in one hand, but making the public debt immediately unfinanceable at reasonable cost in the other. That’s to say no public investment or running expenses for state’s services. French bankers are not close to NF at all : Poutine’s friends finance NF !
      – most of voters for National Front use it as a repulsive visible act of government parties, UMP (right wing) and PS which is at the turning point to change its name into Social democrat party. The two that hold the french power for long in a Republic that has more to see with a monarchy than any other european regime.
      – Marine uses the same words as all europhobic demagogues : all miseries would come from Bruxelles’ technocrats. But if naive people can be trustful with that, many perfectly know who is the real master of european institutions : the European Council of the 28 heads of governments. Not Juncker or Tusk. They can say what they want, the only really powerful institution is European Council, not European Commission or Parliament (has no inititiative of laws). A large majority of french citizens know that.
      – Of course, 3 helpful facts for Marine’s election exist for the 2017 presidential election : 1- the right wing electorate in France is largely racist 2- a republican front against her won’t work that time. It worked in 2002 when her father reached the second step of the election, but many left voters after that decided never to redo. Nicolas Sarkozy is now at the head of the UMP and will certainly be the UMP candidate in 2017. But it’s own campaigns are Front national teinted, and its past presidency was purely neoliberal, what a large majority of french people don’t appreciated. Except NF, all parties can have huge surprises with voters now.
      – in fact, it’s tactically the perfect election for François Bayrou, leader of the center party. He only is certain to obtain a large majority from both right and left sensibilities against Marine Le Pen at the second step. But he has to leave coalition with UMP now to success in due time, like Giscard d’Estaing did once.

      1. Working Class Nero

        You have a limited number of choice and none are perfect. On the one hand you have the choice to stay in the EU. In that case it really doesn’t matter which pro-Eu party you pick because all their hands are tied in the same way. It’s just a choice of personalities or who has the most interesting First Spouse. Policy will stay the same.

        The other choice is you decide that it is best to either leave the EU. If this is your choice then you pretty much have to vote for the FN. It’s really that simple.

        Below I respond to you point by point.

        –Yes the history is clear. Strom Thurman was a Democrat and Francois Hollande’s father was an extreme right OAS politician. So what? My choice is between EU or no EU — somewhere around 750th on my priority list is what the candidate’s fathers did.

        –since no one will be sending tanks in, the debts will be paid back in New Francs which will be printed like crazy. The MMT guys can explain this better than I can. In any case France has enough stuff to export for hard currency so that paying for imports will not be a problem. The best thing you can say about FN/MLP is that western bankers hate them and so the FN can only obtain loads from Russia. That point alone would earn my vote.

        –You seem to be saying that the FN is a protest vote against the UMPS. Of course it is, but that’s certainly not a bad thing?

        –EU power structure. In fact MLP says the Germans run the EU and do so only in their narrow national interests and against the interests of the vast majority of EU citizens. That is the big picture critique and it is undeniably true. The rest are details.

        –2017 election. Yes, the Socialists never tire of claiming that it is racist to not vote for them. Kind of like the Democrats in the US. But only people with IQ’s below 70 fall for that weak-ass white guilt bullshit. The fact is though in 2017 that the FN may not be quite ready. Typically it is easy for opposition parties to rage against the machine without having the “responsibilities” of ruling. Also they are anti-US empire and will rely on the emerging Russian bloc for support. It could be a good move by the powers that be to step back and let them take power too early before conditions are ripe. On the other hand who knows how things will change between now and 2022 when I think they will be ready. My guess is they lose to Sarkozy in the second round with 45% of the vote. This places them in a great position for 2022. I totally agree that Sarkozy is playing a Faux-Front game with the Front’s more right leaning policies. The Socialists will do the same and form a Faux-Front mimicking the Front’s left wing policies. Eventually the voters will opt for the real thing.

        — What is François Bayrou’s position on the EU? As Metallica says, nothing else matters…

        1. Alcofribas

          So you think that Socialists exist in France ? Where ? There are none except in in small parties at the extreme left side, counting for few in the votes. Jacobinists do exist, they are 80% of the PS troups, but don’t know what socialism really is. What they call to be “socialist” is the claim for Providence state. It’s a semantical misfit. Really, their name is the worstest thing for the social democrats and social liberals that take place in the old named Socialist Party : Melenchon was the last of Mohicans and he leaved. If they have no courage to change it, it is their problem when in campaign (offering archetypal attacks against them by the red fear). More deeper, they haven’t done the job to reinstall a clear and modern economical software adapted to XXIth century inside, rather far less ideological and far more concerned by EU’s and world’s institutions. But in fact, all local parties in Europe have this problem : they haven’t done the job to join in really paneuropean parties of european militants. That’s a divine gift for demagogical local parties.
          The UMP right wing party is divided too, between neoliberal Sarkozy (but his fans don’t see that but only his leadership ability) and paternalistic social trend, with Juppe as champion.
          National Front is a purely demagogical party, taking advantage of all medias sparks, and this don’t make a credible programm. Many voters use it as a cudgel to hit government parties, but don’t want of Marine on the thrown.

          About Germany, Mecklenburg peoples aren’t Bavarians. Have you been told about Mitbestimmung ? Do you know which Parliament saved at a very large majority the euro zone as an undestrutible whole, at the top of the greek finance crisis ? Germans look French as very passive citizens of an old centralized country, and french political elites as arrogant teachers…but inequalities in Germany are far under french ones. 200 top families hold hard the french capital. MLP becoming french president would exactly do the same with them as did Hitler. Only under educated people can believe her : many voters don’t.

          But she cannot become an active president, if elected thanks to miracle. 3 weeks after will come the Legislative election : mobilization, in that case, will be massive against her. A very hard political crisis following, of course.

  2. steviefinn

    Looking at the situation in Europe’s periphery combined with the fact that to me at least, it appears that the EU will not be able to improve the state of these economies & is in fact – on a road to nowhere – can only mean that eventually somethings got to give. The electoral cycles have proven useful in the sense that these populations have opted to elect governments under the false pretense that the main opposition would do anything different than their predecessors.
    Podemas & Syriza as 2 last chance saloons & even in Ireland with the realisation for many that the 2 conservative parties – Fianna Fail & Fianna Gael are 2 sides of the same coin – a faux Labour party & a previously discredited Green party are no longer an option, which leaves only independents & for many the much hated Sinn Fein party.I think that even in Ireland due to that commodity – Water – which for some reason seems to get people on the streets, will eventually lead to change.
    An Italian friend of mine who I am occasionally in contact with who lives in Lazio, just outside of Rome has been saying for years that there is a very nasty fuse that was lit some time ago, which he is amazed hasn’t already ignited a bonfire that with time is getting ever larger – fueled by among other things, a growing shift to extreme right wing groups among the unemployed youth in major Italian cities, due to the fact that they consider there is no other option.

    The bunch of self serving clowns who run Europe will come up with a miracle to solve all this ? …..I don’t think so……..the fuse is burning.

  3. digi_owl

    The euro made sense for B2B trades across the borders (it would in essence be a EU bancor). But for daily use within the EU nations it was absurd as long as they were to be seen as sovereign nations.

    1. Alcofribas

      Quite ok with you. A money without State is just a fantastic speculation opportunity. Not with changes market but with interests rates one.
      Time has come to build it up, first for the general inner interest of 510 european citizens to be protected and served by a really democratical power, second to assume with China, USA, Brasil, India, Africa, aso. to turn international institutions in a better way.
      As Tim Geithner noted at Seoul in 2010, it is now time to forget White’s Bretton Woods and comme to Keynes monetary solution. But someone fells at the table of international moneys managers : the european one…

  4. not_me

    “… and the inability of countries to depreciate their currencies to help exports,…” Yves Smith

    The Euro should never have been more than a purely private currency but can debt-based (as opposed to equity-based) money even exist to any large extent without government privileges, both explicit* and implicit**? The answer appears to be no since why should one borrow someone else’s money for interest when one, with the same equity, might create his own equity-based money interest-free?

    The solution now is to recognize that ALL debt in Euros is morally suspect and to eliminate it in a manner that does not disadvantage non-debtors such as a Steve Keen-like debt jubilee.

    * eg. a fiat lender of last resort.
    ** eg. lack of government fiat storage and transaction services in favor of government deposit insurance for what should be 100% private banks.

  5. DJG

    I think that the overall diagnosis in the essay above is correct, that Italy is ill served by the euro. The comment above about the “periphery,” though, shows that part of this is a cultural problem. All of those flighty PIIGS not toeing the Anglo-German-fantasy line. The problem for the Germans and the English, if they are even willing to take note, is that Italy has the third or fourth largest economy in Europe, an economy undoubtedly more innovative and export-oriented than the UK. Yet the weakness of the essay above is to believe that the opposition in Italy is made up of parties. I’d argue that Movimento Cinque Stelle is mainly a creation of Grillo, and Grillo hasn’t evolved into a statesman. His frequent tantrums will not lead to good policy, and M5S has had all kinds of weird internal scandals. Likewise, Forza Italia, which is a creature of Berlusconi and mainly a movement of opportunists. I’ll give M5S some credit for having a few principles. Forza Italia, no: Pure looting and manipulating and amusingly stupid sexual scandals. The Lega Nord may have gotten some protest votes in red Emilia-Romagna, but that is truly a fluke, given how red the regions between the Po and Rome are. This showing has to do specifically with the crappy Italian economy. Likewise, good showings by Lega Nord in Piedmont, where the party bobs up and down depending on the national economy. One of the reasons that the PD, Renzi’s party, has such a big majority is that the left has proven itself highly competent in Italy. (Emilia-Romagna, Turin, Umbria, Tuscany, even in Sicily.) No Italian in his/her right mind would trust the government to a M5S majority or to the Lega. And Berlusconi is at levels of popularity that are minuscule. In short: Italians thought that the euro would give the country fiscal discipline, the sort of surrender/adventure that Luigi Barzini pointed out years ago, a susceptibility to supra-national structures to override the melodrama of the Chamber of Deputies, yet supra-national organizations driven by Anglo-German economic fantasies are just what Italy doesn’t need.

    1. Ulysses

      “supra-national organizations driven by Anglo-German economic fantasies are just what Italy doesn’t need.”
      Exactly! Italians of all political persuasions are starting to become de-narcotized from the poisonous Eurozone tea, and are starting to revivify with good Italian espresso, like Fiorella Mannoia here:

      http://www.youtube.com/watch?v=FmfTQTHCrrw

    2. washunate

      The irony of talking about the English specifically (or Anglo-German cooperation more generally) is that the UK isn’t a normal member of the Eurozone (the European Monetary Union). They continue to use their own currency, the pound. In fact, negotiating for their exclusion from the general requirement of EMU participation to adopt the Euro currency was a preconditon for the Brits to agree to any kind of agreement. The UK wasn’t part of the original ECSC (European Coal and Steel Community). That was France, (West) Germany, Italy, and the Benelux nations. And the UK certainly has no intention of ever sharing the same currency with Germany, whether that’s the existing Euro, a reconstituted Mark, or some new truly transcontinental currency.

    3. Alcofribas

      I agree with your conclusion. But not only Italy and Italians, but all european citizens inside the euro zone (25 countries above 28, special case is Great Britain, part of nothing and head of competition against EEC/EU with the EFTA) when achieved, will be better well served by a good federal state rather by limp or crappy local governments.
      Just a point : the european citizenship exist for 22 years ! What are european citizens waiting for instead of using it to reform EU serving bankers into a public adminsitration serving people first ?
      Have common citizens understood that they now have to feel as european as local citizens ? the 28 members of the club of Bruxelles is not a Democracy : there is the key point, effectively, political much more than economical.

  6. BillC

    Not to throw cold water on Wolfgang Münchau’s optimism in interpreting anti-austerity politics in Italy – I would be delighted if I agreed – but I think he may be overstating the case a bit.

    First, the Northern Leage did not get a 30% vote in the Emilia-Romagna regional election of a couple Sundays ago; that was their coalition total, with the following breakdown: Northern League 19.4%, Forza Italia (essentially Berlusconi’s personal party) 8.4%, and Alleanza Nazionale (not too far from neo-Nazis) 1.9% (official stats).

    The Northern League has long been the preferred protest vehicle for Emilians who object to the decades of massive fiscal transfers to the poor and mismanged regions of southern Italy, and it is my sense that that remains the main motivation of their voters. Berlusconi’s euro-skepticism is longer-standing and perhaps more integral to his appeal, but Forza Italia voters are more into personal adulation (don’t ask me why!) than anti-Euro policy details and Berlusconi is getting old, in both age and shelf-life senses. Apologies, Yves, but IMHO the fact that these parties are perceived as right-wing does not mean they enjoy broad big business support. Lots of small family businesses, some of whom have grown into medium-sized enterprises, yes, but I think Renzi’s Democratic Party (PD) remains the preferred political home of Italian big business – and like his US Democratic Party counterpart, Renzi shows every sign of thinking he must cater to their preferences.

    Second, as I commented earlier (incorrectly citing Sicily as the other regional election; it was Calabria, the “toe of the boot”), the big news from the Emilian regional election was unprecedented abstention (official stats), interpreted by many as indicating a “none of the above” vote, precisely because there is not yet an effective national party anti-austerity advocate that can muster mainstream appeal.

    Third, Mr. Münchau cites Beppe Grillo’s 5-Star Movement as the biggest and largest anti-Euro advocate. True enough up to now, but over the last several weeks, the Movement has been going through severe internal conflict, with expulsions of multiple of its Members of Parliament, sustained public disagreement, and even a recent Grillo statement that he’s getting tired wants to cede leadership to others. Like a Forza Italia without Berlusconi, it’s hard to imagine the 5-Star Movement hanging together as an effective political force without the active day-to-day leadership of its charismatic (if erratic) founder.

    From my knothole, looks like the “all opposition parties against the Euro” that Mr. Münchau cites are too regional, too extreme right, and/or personal fan clubs that are slowly dissolving.

    I believe the evidence you cite that the only sane economic policy for Italy is fiscal stimulus of “shock and awe” strength, but there’s a countervailing factor: the observation in NC’s column of yesterday that reducing income inequality has virtually no impact upon the three middle household income quintiles. Because most Italian households are still economically hanging on, their innate economic conservatism (among the largest savers and highest percentage of home owners in Europe) means it will be a long time, if ever, before anti-austerity political forces become nationally powerful in Italy.

    As usual, I find myself nodding along with Working Class Nero: current conditions suggest France will force change before Italy does.

    1. Yves Smith Post author

      You’ve got a big hidden assumption in your remarks that is not correct. “Business” in Italy is overwhelmingly small businesses. So to say a party that caters to smaller business is not a major business party is not inaccurate.

    2. Alcofribas

      Hi BillC,
      Effectively, inside the European Parliament, newly elected M5S deputees play their own cards. Grillo is not able to be more than a contestative leader. He has had the role of his life. Ciao ! seem to say young MEPs.

      I also agree with Yves’ reply : small business entreprises have a huge importance for GDP or employment in Italy. And elsewhere too.

  7. Fair Economist

    How “realistic” is the Forza Italy plan for a dual currency? I’m not knowledgeable about the details of the Euro treaty, but is it actually permitted for a Euro nation to also run its own currency? I was under the impression it wasn’t; IIRC there was an idea floated for Spain to use government IOU’s as a shadow currency precisely to get around the restriction on creating a separate currency.

    Aside from that, there’s also the problem of Euro-denominated debts owed by various debtors in Italy, most significantly by the government and the banks. If Italy starts its own currency then those become foreign-currency-denominated debts. Devaluation can bail a country out of recession, but it worsens those kinds of debts and the net benefit to Italy could be rather small.

    1. Chris in Paris

      There’s nothing in the treaty about how to leave the Euro. But under the principle of subsidiarity, I would think that a member state could justify leaving for internal stability reasons. Nothing to stop that.

      Also from what’s here this isn’t a dual-currency as such. There would be an interim euro italiano that would still be pegged to the Euro but which would be issued by the Bank of Italy. There would then be a severance date announced where the euro italiano would lose the peg and become a lira at 1:1, then float.

      This would likely have a viral effect if it looked like it was going to happen; i.e. Greece, Portugal and maybe even Spain and France would do the same thing.

        1. Chris in Paris

          That’s why I mentioned subsidiarity – the EU can only act within its specific competence. Preserving civil order in a member state is not something Brussels can claim. I’m sure some will object to my interpretation of EU law though.

    2. Kurt Sperry

      I’m far from a Berlusconi fan, but the parallel currency talk is an interesting shot across the bow of the German EZ juggernaut. Do we have any modern clarifying examples of such a move to examine?

      1. craazyman

        Bud Lite
        Miller Lite
        Marlboro Light
        and
        Amstel Light (see that’s European!)

        Why not a Euro Lite? I asked that question well over a year ago here in the peanut gallery. It makes perfect sense. Lower calories than the regular Euro. It tastes great but it’s less filling! You can spend 1000 Euro Lite and it’s like spending only 600 Euros. You don’t have to gain all the big-belly-debt-fat you’d get printing regular euros.

        The women especially would love this one. That’s probably why Berlusconi thought of it. No German would think of something like this, that’s for sure. It’s amazing they even have children. they must get so drunk they don’t even remember doing it. When was the last time a German had a light beer? God only knows. But if they did, it was probably just a joke for them,.

    3. Calgacus

      Devaluation can bail a country out of recession, but it worsens those kinds of debts and the net benefit to Italy could be rather small.
      The net benefit would be less (in the short term), but for a rich country with sizable exports like Italy, this cost of “devaluation” would not be unreasonable (assuming it doesn’t idiotically decide to incur more foreign-denominated debt). The longer term benefit of having its own currency again would be colossal – Italy had the strongest growth of any country in the world for much of the postwar era; no real reason it can’t grow like that again for a while. The real benefit is not from devaluation which would only benefit export-driven employment, and is more an effect than a cause, but from being able to, and then deciding to have full employment period. Paying off the Euro bonds would have a long-term benefit of making New Lira / Italian Euro / whatever being more financially attractive.

      On the question of legality, some might like being reminded of needless-to-say points that Italy and the rest of the Euro suicide pact states are still sovereign states, as much as the suicide pacts try to obscure this. They may become in default of international obligations, which could be the basis of cases presented to the World Court for instance, but IMHO there is not much that the Eurozone remnants would likely do, or is legal any more to do. Nothing at all really, if it paid off the Euro bonds in full.

      1. Alcofribas

        All those who speak about Euro exit possibility have to consider one thing first : the rules of the game for exchanges between the euro zone and the considered country could not be kept inchanged…

          1. Alcofribas

            Sure it is ! But who can decide the right policy mix that allow the use of welcoming Euro bonds ? Where is the the Tresure secretary in Europe ? The ECB cannot decide this alone…

  8. Paul Morphy

    I’m not surprised that some Italian political parties are lobbying for exit from the Eurozone/EU.

    It has long been the case that there has been support in northern Italy to secede from Italy. Their argument is that northern Italy disproportionately supports economically the rest of Italy. For years this support has claimed that this is unfair and that they wish to go their own way.
    Separatist movements in places like Catalonia make the same argument in relation to the rest of Spain.

    The cracks that have always existed within countries throughout the Eurozone/EU are being exacerbated as a result of the financial/economic crisis. If cessation movements take hold and gain support, it will be very difficult for respective states to address those issues.

    1. Alcofribas

      It’s a key point. Europe’s history is made of wars, that can be called civil wars. The last one in the USA was the Secession one, I guess. In Europe, about 30 official langages, many countries with 2 or 3 official langages too : internal hurts are the most severe ones.
      It is also why the european project to make one country with a democratical and peaceful manner is so interesting between so good and old ennemies. But as the money has been launched without the Werner’s plan and within a purely neoliberal agreement of the states members, no fiscal unity exist yet. Who pays taxes in Europe ? Only captive citizens and small business enterprises ! Global firms don’t pay, are offered tax dumping laws and tax heavens, even legal fiscal evasion. What do the prices mean when their proportion of speculation or fiscal optimization becomes the largest part ?

  9. susan the other

    It occurs to me that the Euro was a crazy idea. It was such a romantic notion for all of Europe to come together. But it just isn’t real. Trying to substitute money for politics. We suffer the same confusion here except that we have not yet admitted that politics is not money. And our fatuous talk about political economics barely begins to scratch the surface of the problems we face as a nation, let alone as powerless landmass in a sea of globalized commerce.

    1. Alcofribas

      Sorry Suzanne, it’ is not crazy. What is crazy is to use tools, after all money is nothing but that, on non democratical way. Nor USA or EU powers use money correctly, they are regardless of peoples’ interests and focused on high finance ones. the largest difference between the two is USA is a State, EU isn’t but 28 states, 18 of them using euro.
      Why do they act so ? A book with that to be complete. But just one question : who owns public obligations in those two so called democracies ?

  10. Synoia

    Please review you comments in the light of German Unification, and the historical results of a unified Germany in Europe.

    Generally Europe resolves issues such as, The Euro, Mercantilism in Germany, and debtor colonies in the remainder of Europe, with War.

    With the EU, who’s mission above all is to prevent another war in Europe, enforcing a situation where National Socialist (The Socialist in National Socialist means socialism, please review how Germany existed the depression by creating a fiat currency) parties can re-emerge, its hard to conceive of any other result than War.

  11. ewmayer

    Ugh, typically highly-uneven Google translation of Munchau’s piece. Here is a human-aided one, with the most-offensive (in the sense of potentially or actually altering the meaning of the original) GT parts struck through and replaced by the italicized snips:

    One of the reasons why we even have the euro, was the broad political consensus in all countries who would later take part in it. No matter whether government or opposition, they were all for it. Just the consent of the opposition parties was important because in the course of 15 years, all have at times @over/ assumed leadership of the government – the SPD in Germany, and the Socialists in France and Spain. The euro has thus @characterized/ survived the many changes of government since its inception nearly 16 years ago @survived/ well.

    With the euro crisis, this consensus has relativized. In Germany the government and opposition are still largely for the euro. In France, it is formally the same way. Only the Front National is against it there@, however/.

    @Unlike/ Things are different in Italy. There @are now/ all opposition parties are now against the euro. @First, the does not mean anything/ For the moment this is unimportant. The Italian Social Democrats under its chief Matteo Renzi have a large majority in parliament. And they enjoy a great, albeit not overwhelming support in the population. But in democracies oppositions come eventually to the government. And then of course it is important to know whether such a government would implement its anti-euro policy.

    The five-star Party, the largest opposition party, had spoken before the European elections for a referendum on the euro. The party was @by then EUR/ previously critical of the Euro, but the positions were not then as hard as now. Party leader Beppe Grillo has revealed @its/ his stance recently. His party@,/ want to exit the euro zone as soon as possible @to leave/.

    In the regional elections in the northern Italian province Emiglia Romana Although Renzis party won @almost/ narrowly, but the Northern League came on 30 per cent, which no one would have expected. The Lega is not just for a separation of northern Italy and southern Italy. It is now also include a separation from the euro. And this position was rewarded by voters.

    Italy’s exit would be the worst of all scenarios

    And that has now brought Silvio Berlusconi on the taste. Really friendly europe Berlusconi was of course never. Opportunistic as @it/ he is, after all, he is now also putting the future of the euro in question. Moreover, he and his party Forza Italia, the second largest in Italy, have an elaborate plan. Berlusconi wants to win back the monetary sovereignty by introducing home a parallel currency which is freely traded against the euro. Wages and salaries and of course the prices in the shops would be @enrolled/ set in this new currency.

    One would exchange their legacy euro and the new Italian Euros first one to one. Then the new currency would be released, whereupon its foreign @currency/ exchange rate would collapse immediately, probably 30 to 50 percent. The Italian economy would be competitive again with one blow.

    For the rest of the euro zone, such a withdrawal of Italy would be the worst of the crisis scenarios. The country @is no longer/ has effectively seen no economic growth @in the euro/ since @the/ its Eurozone entry. Unemployment is high. Youth unemployment frightening.

    The anti-euro strategy of the opposition One should therefore not be dismissed as pure demagogy or populism. An exit from the euro would technically solve the Italian problem at a stroke. The companies would be competitive again. It would also convert the debt to the new currency, because otherwise the act would not be worthwhile. The foreign owners of Italian government bonds would have to accept a loss.

    1. ewmayer

      Sorry, forgot to replace my shortcuts @/ with proper html strikethroughs before posting, and the WiFi connection I’m currently on is so friggin slow that by the time the ‘edit’ popup finished loading, the edit time window had expired. I ask readers to mentally make the replacement themselves.

  12. Alcofribas

    Some considerations about this article :

    1- what happens in Italy happens all over Europe : new parties are rising up with the recession, most of them contest the leader parties on local countries. But no european party exist, even if the european parliament is elected since 1979 : it’s a kind of political conservative capitalism mixed with cultural differences that makes difficult to use correctly the european citizenship.
    2- in Europe, religions also play a rude misacknowledgment. You find four christian churches (anglican, catholic,orthodox and protestant), muslims, judes, buddhists, animists, atheists. Both imperialist history and Orient or Africa proximities are sensible in every street.
    3- If some states members of EU are old (France, Great Britain), some are new as individual identities (Poland, Greece). And like in USA, some are large and populous, somme are small and count few inhabitants.
    4- Only 7 are federal states for their own, but in different ways. German and Swiss federalisms are particularly efficient and robust, belgian or spanish ones far less. France gets a huge pain to allow its inner Regions to become democratically managed, but it seems to be on the way now. So that what EU’s institutions call structural policy has been for long differently implemented.
    5- Central Europe members were Kremlin structured and drived with central administrations and planed economies, have had a hard job to change to open market standards. Liberalism has now the same meaning in all countries, but in 2004, many central european citizens only understood “freedom” for civil rights without suspecting a particular economical understanding. Now, they know where ultra liberalism drives to.
    6- Germany’s population is not a whole, and no local population is Europe is. Except perhaps for scandinavian peoples for which equality and solidarity are higher than elsewhere, but menaced. Inequalities grow up constantly since the 70’/80′.
    7- To be caricatural, there are 3 conceptions of democracy and representative powers : german one, latin one and slavic one, if you consider the langages’ influences on local cultures. Europe is a patchwork, really, united with real diversity. In the North democracy is deeper established than in the South, not only in the relationships between citizens and powers, but even in the professional fields.
    8- It is true that political adjustments to economical crisis aren’t managed with the same elites’ habits. North countries are used to correct quickly and severly their public unbalance and sector policies, hating public debts, while south countries are used to let public debts grow and devaluate their moneys.
    9- Of course, within the same money zone, economical divergent policies make severe problems and devaluations are unpossible. But believing that one country can be a model for the others is a naive view.
    10- Mrs Merkel is on the way to be teached that when your customers die, you are not so far to die too. And when you don’t want women to work to have children, or can work but have no child ( no public policies for 2 working parents’ children ), your population get older and older. Combine the two and you understand why the ratio of young engeeners coming from Spain or Greece in Berlin is so high, why german unemployed youth is so disappointed.
    11- Mobility is a pleasure when a choice, and this choice does only exist for students and graduates, not for many young peoples of many european coutries. Sad ideologies can make their come back.
    12- Trust in all kind of politicians is very low. Because their States aren’t any more powerful states (you need both fiscal, public expenses and monetary tools in the same hand to be one) and none is alone able to tackle a global zone crisis. And EU is still a club of 28 competitors singing the “competitiveness song” of austerity (after having saved bankers with thousand of billions euros) and not a true State neither.
    13- Add endly that the richest part of the world not only made the political mistake to create the conditions of debt speculation, but didn’t managed at all to find out the right structural default of european institutions, required the IMF to build up a cruel Troïka with it, and you obtain a social and political crisis now.

    How to keep out ? Simple : make a federal and democratical State, and not only the recession is immediately over (GF will have to pay their own part of taxes, and a huge recovery plan driven by the unique actor who can do it becomes possible !), but Mr Poutine will also have new cards to deal with…

Comments are closed.