Euro Crisis: transfer of sovereignty or default?

The Euro Union was born without the necessary economic, legislative and executive power given by the countries that support it. 

The Parliament and European institutions are empty. Speculative attacks are directed against a currency that is not representative of a uniform situation. It is not an expression of a Confederation, like the U.S. or Switzerland. There is no certainty that the weaker Countries, with high debt and poor growth, have the financial Community means to support them adequately. In the past years, every Country was not able to stay within the Stability Pacts, there was laxity and failure to punish States who most have wasted resources. The ECB can not act as lender of last resort, that means it can not possibly print money or devalue it, to lighten the positions of debtor Countries, as could instead do the FED. There is also no possibility to control and act directly on the PIIGS budeget under attack. Italy has been the guinea-pig and have raised controversy for the ECB letter to our former government, shouting at meddling of EU into national affairs. Then the government lost its majority and had to resign and everyone understood that if Italy fails, there would be problems for others, including Germany, and the implosion of the Euro. If there is not a joint regulation how could exist a single currency? Everyone will have to sacrifice something to save the Union. The adoption of Eurobonds in partial or total replacement of the sigle nations bonds (to an unfavorable interest rate for Germany but favorable for all other coutries)would be the price that Germans would have to pay to avoid Eurozone failure (and their well!: with a return to mark at the highest rate there would be a vertical fall of German exports to the Eurozone, one of the most important voice of the growth of these years).Chancellor Mrs.Merkel will be able to convince her voters to drink this bitter cup perhaps only at one condition: if at the same time Europe will adopt common laws in theme of fiscal harmony and strictness for the pubblic budgets among the Euro Countries, giving to European Uninon the effective power of supranational control with possible penalties on budgets of the States through a series of constraints that countries defaulting could not escape. It is clear that Italy, Greece, Spain, Portugal and Ireland etc.. are not already in a strong position: they can only choose between a default or an increasing transfer of sovereignty. This last is the only chance left to keep Europe going collectively and democratically regulated. This should not be seen as a punitive intent in advance but as a community effort in the interest of all.It is much better then a suspension from Euro that someone fears: it irreparably harm anyone who should be subjected to. In this case Italian citizens will come out very impoverished, even and especially in their private wealth, one of the economic italian strengths universally recognized. It is hoped that new Italian PM Mr.Monti,in mission Brussels and Strasbourg this week, could give a valuable contribution to take the less painful path for everyone. The sad thing is that Italian political parties do not openly support the "dirty job" that Monti government should do in his next policy moves, just because of their past inability and reluctance in doing surgically cuts to the many privileges present at all levels into Public Administration and in fighting tax evasion and undeclared work. This will be the only way to not frustrate any new request of taxes to Italian people.

Comment sent to Wall Street Journal 11-24th-2011

PM Monti prepare his meeting with Merkel and Sarkozy to give a contribution to save Euro

The new government took office and required the trust to the two chambers of Italian Parliament. with a keynote speech of the new PM M.Monti , that require listening and not applauses.  This is the kind leadership that the country should always have, not co-opted but on merit, and not only in this emergency situation. The program of Monti gov. is an Handbook of what should be done and will definitely do: rigor, growth and equity to set for the future elected governments. Everything in a in a single year, a way to solve the secular problems of Italy today, put it at serious risk. There's no more choice and no more time. "Things that Europe  is  asking to us are not away from what is good for the Country" Monti said: "Europe is us and we have to contribute in solving not only the specific italian situation but also the Euro situation from speculative attacks creating common Eurobonds, common econmics laws and control of single countries budgets" I hope togheter with a limited possibility to ECB to print money as FED. And this week Monti will meet Merkel and Sarkozy about this way to prevent the end of Euro with a PIIGS default and also German problems.

NEW ITALIAN PM MONTI OFFICIALLY FORMED. HIGH TECHNICAL PROFILE OF MINISTERS.

Tomorrow at 11 new PM Monti will show the list of ministers and his program

is not only a competent and style Professor:is a politician too with an high sense of institutions and determined.

OK ,reached by all political forces, for the birth of the new government, except Lega Nord party did not occur in the consultations. This party is perched on fantastic positions to split the country, forgetting that he ruled for three years on majority without doing anything (remember what mr Calderoli did as minister of the simplification of laws? Nothing. Or did Lega Nord a federal system equitable and effective for everyone in Italy? No). However it is better a declared oppostion as Lega Nord said than of an unknown hidden ooposition inside this big coalition of majority. Doubts about the political presence in the government: Gianni Letta for the PdL and Giuliano Amato for the Democratic Party. It seems that politicians attacks Monti for having usurped them a role, to my way of seeing for their evident failure and the loss of parts from the ex former majority, but if they will not participate directly in the new Government,they will demonstrate that while the technical government(not made by politicians elected) is working for Italy, politicians will think only to fight each other and dissociate themselves from the government that officially say to support. Now the house burns. Markets are stressed and it takes determination to solve fairly, and with the consistency of all social and political forces, the country's long-standing problems, ending with a bipolar conflict of the recent past, with the Berlusconi government and those who opposed it. We are waiting for the new program.
Meanwhile, the crisis is spreading: Italian-bond/German-bund spread is again above 500points ,guys of "Occupy WallStreet" in US were cleared from Zuccotti Park in NYC and from other cities of the US.

Italy turns. Berlusconi falls.

21:34 local time

Nov 12th 2011: Berlusconi resigns.

 

Berlusconi government falls with no more national and international credibility. After he denied the existence of economic crisis in Italy and did not anything to solve the italian structural problems of economic growth, exposing Italy more than any other country default risk. 

The Berlusconi government in these three years only tried to do laws against press and justice, blocked by a huge illiberal conflict of interest. Now everybody wait for a new liberal (this time really!) government with the new PM Monti, which sets good example, cutting privileges and fighting corruption, anti-meritocratic systems , tax evasion and doing antitrust actions before anything else. This requires that all Italian Parties put their face in this project with responability for Italy and Europe. Then in 2013 new elections will be possible with a new electoral system.

Probably tomorrow or at least Monday, the new "National Unity" Government led by Mario Monti

The situation in Italy: a new government by excellent economist Mario Monti is the only way possible to give Italy a chance

Berlusconi resigned slowly.When everybody understood that his vain government is linked to a major damn for Italy and its debt on the rate of Italian bond market always higher and higher.
Now it's up to the Parliament. Will it be able to listen the President of Repubblic Napolitano? He is looking for a big coalition to support Mario Monti as President of an "Emrgency Government" to give stability and reform to Italy after Berlusconi-storm with a big coalition.The left Democratic Party and Center Democratic Party are agree from long time . The ex majority (Pdl the Berlusconi Party and Lega nord) are not so sure but knows how near is the brink for Italy. The ex comunist party lives "in Mars" but fortunatly is a little Party and is not agree to a real liberal Monti government.
There is no time to loose in preparing elections with a non adequate electoral system, to reform too. There is no time to an electoral campaign during an attack against Italy, a Country that put at risk all the Eurozone because Berlusconi did'nt cut political budget cuts , waste of pubblic administration and did not do antitrust actions (Mediaset shares,the company of Berlusconi lost a lot of value at the same time he decided to stop his political positions), anti-corruption actions, welfare-actions to protect temporary job positions and did not stimulate economic growth at the same time.
Who could do all this things now as soon as possible as EU ask vigorously? Mario Monti (ex EU commissioner and excellent, stimated and well known in the world economist) said: "There is a huge hard work to do for Italy to exit from crisis". Probably he could be the next Premier of the government, only if all the parties from left to right in parliament will set above the good for Italy (and Europe) instead of particular interests and this is not predictable, is the real battle to win, indeeed. The risk is linked to the high irresponsability the political class, present in these days in all parties, incapable to find a limited but keen program for Italy till 2013 ferrying the Country to new elections with a new system.

Comment sent to THE ECONOMIST nov10th 2011 
and WALL STREET JOURNAL nov 11th 2011

Democracy and global capitalism. Why Occupy WallStreet

< I want to respond to an article appeared on "London Review of Books"(here the link) signed by Slavoj Zizek (*) in which it is claimed, provocatively in my opinion, that democracy in this crisis seems to be the real enemy. We all know how this moment is historical, not only for Italy but also for the European Union and the whole world.

We understood today we are in fact dominated by global finance capitalism which created also "global" problems to the whole planet and to many who had no voice (as Africans) were added problems to Americans and Europeans, who have more voice. Hence arose the protests around the world, in different forms, from the Arab revolutions to "Occupy Wall Street".

"We are 99%" is the shout of the Zuccotti Park occupants. A protest as "Occupy Wall Street" had never happened before in US the coutry where modern capitalism was has been created. Protesters at the bottom has more questions and indignation than answers to offer.

Slavoj Zizek also tells us that national democracies today are slow and ineffective, inadequate to address the problems that today's global financial crisis arises because:

1) Every democracy has a smaller legislative sovereignty than any problems that arise in global markets. The market has a dynamic and supranational rules that make it non-adjustable from democracies that have not a slim supra-national governance slim.

As seen in every International economic Summit done,as the G20, everything always ends in a stalemate. For example, the implementation of a common law as the Tobin Tax on financial transactions (on the effectiveness of which I will not go into) are unable to implement and the time of burocracy is always longer than those that the evolution of market crisis requires.

From this we easly understand that while there is already a mature global capitalism there is no global laws nor a democratic organization responsible for its implementation.

2) The national democracies were born as issued by the birth of the capitalist model of the bourgeois class' 800 and derive livelihood from it,and this submissive position (lobbying) forbids the system of governance: to really fight the problems that global capitalism today places you should put a discussion on democracies themselves.

I'm not against capitalism itself. Capitalism in itself is neither good nor bad, but no one ever treated it for what it really is, a means and not an end of the human social system, and this is the fundamental difference.

Now Slavoj Zizek says if is democracy the real enemy? I firmly say no, it still remains "the best of the worst kind of government possible," and some rights (as free elections, free press, independent judiciary, respect for human rights) are not insignificant and has been guaranteed better than past or contemporary totalitarisms.

Easy to say, hard to do, but I think the only solution that remains is not to destroy the good of Democracy, but change it back to its role not just for a nation but for the whole world.

To overcome the crisis is necessary an evolution of democracy and the degree of responsibility of each of us.

This is not "export democracy" and bring all to one model. "Global Democracy" means instead that every nation give up a portion of its sovereignty in order to place it in the hands of a world federal democratic system to respond easly to the global problems that crisis poses to all of us.

I would say to "Occupy WallStreet" movement, when it asks the right to forgive of debts by 99% of the people against the salvation of 1%, it must not forgive that the danger of not be able to pay the debt is not in the failure of some banks, but in the risk that doing so will entice to be all even more irresponsibile, thinking that then everyone (banks , countries , people) could start to make debts again and again because they will be saved in the end , without asking anything in return.. Every abuse could be always condoned.

Without a new accountability it would be an irresponsible encouragement to do new acts that created the crisis itself: the irresponsible spenders would be rewarded and those who responsible and careful took care of the territory,environment, energies and or paid taxes would be screwed.

Who is better to run things would be declassified and who has squandered would be rewarded with forgiveness of debts.

Is possible to forgive debts today only in exchange of laws and programs of global responsibility and punishment for tomorrow, whom each Country will be required to respond.

Some things like water, the planet, the environment, the rights and dignity of humans,animals and nature are the property of everyone life and it needs to have a common legislative and supervisory power systems.

You can save 99% if 99% in exchange decides to change course to a supranational and democratic system, (dear Zizek!),for ensuring the goods that are supranational.

Then the excess of debt, but also the conditions of workers in China or Africa, unemployment and workers conditions, the bail out of the banks and of the people , the environmental destruction caused by business, management of industrial production methods, require shared global choices.

China can not pollute as England in IX century, because the economic information and the implications are global.
I do not say anything so utopian:

after the Second World War, the UN was created precisely to try to make a world government in which at the highest level the differences among people will be subjected to a realistic and achievable common good in which we all recognize it, men equal and part of the same planet with no winners and losers, rulers and subjects, etc. but everyone in equal respect for its uniqueness. The UN unfortunatly lacks a real executive power.

For example the problem of migration is common, the problem of african wars are one of my problem before than an immigrant come in my country (where he has to be welcome, but do not hide orselves that his integration is sometimens problematic), or the honest Germans want to save the Greek brothers, whose government has rigged the accounts, only if they acquire a new degree of common legislative responsibility and sanctioning because they will understand that made up the accounts has been a problem for their German brothers who have paid taxes instead. Ditto for Italy. Each State must know that a Global Democracy can not forgive debts without an high price to pay in terms of empowerment of responsability of the people, banks and the financial system. This is the unique way to adjust the finance system in wich somenone could not only gain , but gain onlyin respect of the territory and dignity of all.

Utopia guides reality in the creation of systems of governance. Listening to "Image" by J. Lennon or watching "The Green Planet" movie will help us to make to find a new model real and correctable under construction for the development of the world mafter crisis.

The UN was an utopia: it took a war and the Holocaust to became reality. It's up to us to decide how much suffering: it is certain that sufference is not necessary to do this change, it could be done without pain.

(*) Slavoj Zizek: Slovenian philosopher and scholar of psychoanalysis. His latest book is "From tragedy to farce. Ideology and the overcoming of the crisis of capitalism "-Ponte alle Grazie - 2010

CommNet sent to the ' Internationale magazine , the London Review of Books , Occupy WallStreet and Adbusters on 06/11/2011

Bersani speech in Rome for demonstration of Democratic Party against the government

LIVE Piazza San Giovanni is full: it is a success of this event against the the denial of the reality of president Berlusconi: who deny that we are in fact under control of IMF and the EU, and said that the crisis does not exist because the restaurants and the planes are full of consumers and that the problems would be related to the exchange rate Euro / Lira too unfavorable, forgetting the fact that the lira was in that time very devalued. Today's Italy lack of credibility and foresight push Bersani,leader of opposition PD (Democratic party), to give a chance: Italy must return to its real place in the world and the Italians must be represented better by serious and capable politicians. As argued by ECB PRES.Draghi Bersani says the problems will end if each country will solve it with inner reforms fairly and giving example by the political class, by public authority and with economic liberalization (that Bersani has proven to be able to do in the past govern as economic minister) togheter with a better condition for unpermanent job workers condition. All things that this government did not in these three years.
Now It seems that the numbers of the majority begin to creak and the Democratic Party wants to be ready to save the country from the credibility gap and return to do first of all the things that serve Italy and not those that serve to one person for his legal problems.
And when Berlusconi will resign he will leave the problems with the difference that it will be possible, clear away from populism, begin to solve them without waiting for the flood and finally face the reality

Draghi: first press conference as ECB President

Few important principles of his govern to a continuing inflexible indipendence , credibility, stability, respect of EU treaty, and in a way the idea that every State must solve his problem without an external help (considering tha actual ECB purchase of Soverreign bond too, as "not endless and did only to mantain the euro stability policy" ) to have a permanent exit from crisis.(with job reforms, structural reforms and economic liberalizations for a long term growth)
Today he also cut rate of -0,25%
VIDEO Here the first press conference of ECB president Mario Draghi 

Italian Repubblic President Napolitano: looking for urgent widely shared social reforms asked by EU.

Given the lack of credibility enjoyed by the Italian Berlusconi Government, the Italian Repubblic President Napolitano started talks with all the parties looking for urgents reforms urgent widely shared.
Meanwhile Nichi Vendola, leader of extreme left party , would not give his availability to a new "technical government" after Berlusconi, perching on the "principles" that in the past created only damage yet.
"The idea of ​​a technical government (with a parliament majority not directly elected ), an emergency-response does not solve the problem we are facing: a long structural crisis of a social financial model" said Vendola.
It is an irresponsible position at this time for a politician who has to make realistic choices in the context of this crucial and dangerous moment for Italy.
"Those who underestimate this one, takes right now an historical responsibility" said Mr.Bersani, leader af Democratic Party ( addressed to the current majority but also to the pride of the "pure" Vendola's party.
It is necessary stop saying that the crisis is a development model crisis, that we all understood,it is enough for this kind of rhetoric that doesn't enchant anybody more. Let's see Nichi Vendola get off the pedestal and tuck his sleeves together with the other parties to rebuild the national credibility in front of the markets and the EU states confederation.

Comment sent to Unità newspapaper on 02/11/2011(ITA)