It is Bunga Bunga all over again!

With the election confirmed today by the Senate of the new Italian government Berlusconi has managed to place himself in power once again. 

No wonder that Berlusconi is having a very good time these days; with two trials pending and a new government controlled by him, he has managed again to shield himself from going to jail. 

The old fox has outwitted his antagonists once again.

Beyond the politics of the moment Italy though is besieged by a very serious crisis.

As the various central banks dump money into the system, the yields on Italian sovereign debt have gone down but this does not change the economic difficulties.

The official debt to GDP ratio is 136% but the actual number is somewhere around 280% which is unsustainable by any measure.

Italy's Real GDP is back to 1990s levels practically erasing any growth accumulated in the last 10 years.

The Italian banking system is also in dire straits.

Italian banks are seeing a sharp deterioration in the quality of their assets. The rate of acceleration in newly impaired loans is staggering as it appears the current recession, driven by falling internal demand, is more insidious than the export-led crisis in 2009.

And no matter how the Italian banks try to differentiate their bad loan composition, it is an ugly picture.

The Italian House Price Index (IPAB) decreased 4.6% YOY as a result of tightening credit conditions, new property taxes and a difficult macro environment.

Italy's industrial base has one important peculiarity: 95% of companies have under nine employees. In fact the average is four. They are micro companies and as such, their balance sheet is modest and so is their ability to withstand prolonged contraction in demand (external or domestic depending on the line of business).

Italy has a second important peculiarity. It has significant household financial wealth and an aging population, including a high average age of entrepreneurs.
This implies that on the margin more entrepreneurs are likely to decide to scale back operations as expected profitability has diminished due to weak turnover, high red tape and growing fiscal burden.

On the margin, opting for early retirement looks like an increasingly appealing option.
Be it because of severe balance sheet pressures or because of less attractive future returns, the economy is losing productive capacity at a disturbingly high pace.

But despite private wealth and assets the public sector is quite close to going over the cliff.

Italy’s difficult position was enumerated in a Bank of Italy report to parliament last week which said the economy was going through its most acute crisis since World War II. Economic output last year was nearly 7% below that of 2007, while disposable incomes had fallen 9.5%. Industrial production had collapsed by 25% over five years, while the building sector shrank 22%. Unemployment had nearly doubled to 11.7% the Italian central bank said.

In the meanwhile Berlusconi's ratings are at an all time high, his PDL party in the latest polls is showing an increased popularity eroding support at PD and MS5.

Simply wondering if the Italian people are completely deluded or simply insane, I propend for the second option!

“Insanity is doing the same thing, over and over again, but expecting different results.”

 

Italy political chaos reach new highs with president re-election!

Italy, which has devolved into total political chaos since the February 25th inconclusive elections has managed to re-elect the current president Giorgio Napolitano for a second consecutive 7 year term. 
So if not a prime minister, the country at least has a president.
There is one problem: Napolitano is 87 years old.
Perhaps the prospect of a 95 year old president in 7 years is precisely the the kind of stamina and  impetus the country needs to shift its economy into overdrive!


Yet while the presidential election was largely a farce, it is the problems in Italy's Democratic Party (PD) that are now center stage, following what appears to be a complete implosion in the party.

From Reuters:

Center-left leader Pier Luigi Bersani announced his resignation on Friday after party rebels sabotaged two separate candidates he had backed for state president, deepening Italy's political chaos.

Bersani told a meeting of parliamentarians he would quit as Democratic Party (PD) leader as soon as the election of the next head of state was completed, following two dramatic days of parliamentary voting in which successive center-left candidates were scuppered in secret ballots.

"He accepted his responsibility after the disgrace of what happened," Paolo Gentiloni, a senior Democratic Party parliamentary deputy said after Bersani's announcement.

Then disarray in the center-left, which has the most seats in parliament, could make a snap election in the summer more likely to end the political deadlock, but there is no clarity about the next moves after weeks of chaos.

It is unclear who will take over leadership of the badly split party but Bersani's departure could clear the way for arch-rival Matteo Renzi, the dynamic 38-year-old mayor of Florence, to take over.

Bersani's announcement came shortly after former Prime Minister Romano Prodi announced he was pulling out of the race for president after more than 100 center-left electors disobeyed Bersani's instructions to vote for him in parliament.

It was the last of a series of humiliating setbacks for Bersani and blunders that have shredded his ability to hold the center-left bloc together.

The collapse of efforts to secure the presidency for Prodi, a respected international figure, underlined the deep fractures running through politics in a country still seeking a government nearly two months after February's inconclusive general election.

"The politicians should be ashamed of what they're doing to the country. Today we're seeing a level of irresponsibility that goes beyond all limits," said Diego Della Valle, head of shoe group Tod's, one of Italy's most successful clothing companies.

The biggest winner as a result of all of the above? Silvio Berlusconi of course!
Since Berlusconi's star seems on the rise again I thought to follow the BBC track and highlight some of his most enlightened words such as these:

"I am without doubt the person who's been the most persecuted in the entire history of the world and the history of man."

"In my opinion, and not only mine, I am the best prime minister we can find today."

Previously, on the same theme: "I am the Jesus Christ of politics. I am a patient victim, I put up with everyone, I sacrifice myself for everyone."

"The best political leader in Europe and in the world."

"There is no-one on the world stage who can compete with me."

"Out of love for Italy, I felt I had to save it from the left."

"The right man in the right job."

"I don't need to go into office for the power. I have houses all over the world, stupendous boats... beautiful airplanes, a beautiful wife, a beautiful family... I am making a sacrifice."

"In Italy I am almost seen as German for my workaholism. Also I am from Milan, the city where people work the hardest. Work, work, work - I am almost German."

And to put current Italian events into context it is worth quoting Benito Mussolini:

Democracy is talking itself to death. The people do not know what they want; they do not know what is the best for them. There is too much foolishness, too much lost motion. I have stopped the talk and the nonsense. I am a man of action. Democracy is beautiful in theory; in practice it is a fallacy.

Italian Elections increase doubts over long term reforms

Italians head to the polls on February 24-25 and never before the political scenario has been so chaotic and appalling.

We are witnessing new political movements like the 5 Stars movement climbing up to third place in a matter of months and never before we have seen Germany actively entering the Italian political debate to try and keep Berlusconi at bay.

 

All this is adding up to financial uncertainty on the future of Italy and at large of the Eurozone.

Pier Luigi Bersani, who heads the centre-left PD was considered the assumed new prime minister just a few short weeks ago, at least in the Chamber (the lower house of parliament).

It's all up in the air now as Silvio Berlusconi's PDL has staged a massive rally in the polls.

Berlusconi has been on a rampage lately blaming Germany and Chancellor Angela Merkel for the unemployment problems in Italy, promising to refund the hated IMU (property tax) and more exotically declaring that tax evasion is justified.

Beppe Grillo's Movimento 5 Stelle (Five Star Movement) which has been largely ignored in the Italian press has been wildly popular at rallies. Grillo has a chance to come in second place.

Mario Monti, who heads the centrist Con Monti per l’Italia (With Monti for Italy) coalition, is running a very distant 4th.

Poll Blackouts

Officially, pollsters cannot post poll results in a blackout period before the election. That blackout period started February 9. Below Reuters' 8th of February polls.



Those results are misleading because they do not include undecided voters, and the undecided vote is a very large 20-25 percent!

With such little difference between Berlusconi and Bersani, and with huge rallies for Beppe Grillo and Berlusconi, any outcome is possible.

Germany Warns Against Berlusconi

Of potentially more importance, Berlin Warns Italians against Berlusconi

Here are a few examples from the story.

German Finance Minister Wolfgang Schäuble reportedly said (but later denied) "Silvio Berlusconi may be an effective campaign strategist, but my advice to the Italians is not to make the same mistake again by re-electing him."

Polenz, a senior member of Chancellor Angela Merkel's Christian Democrats, said: "Italy needs political leaders who stand for the future. Berlusconi is certainly not one of them."

One Italian bank even went so far this week as to issue a report arguing that a Berlusconi election would almost certainly force the country to apply for emergency bailout aid from the EU. Mediobanca, Italy's largest investment bank, wrote that "a last-minute Berlusconi victory would scare the market sufficiently to put pressure on the spread."

"Silvio the Savior"

Spiegel reports Berlusconi's Faithful: 'Only Silvio Can Save Italy'

Adoration of Berlusconi in Italy remains widespread. In the parallel universe occupied by his followers, there is no room for doubt about Berlusconi and lines are clearly drawn. Silvio is good and the others are bad.

These fans gather at his speeches, like the Saturday rally in Palermo, where thousands crowded into the venerable Teatro Politeama. There were women in long fur coats and fine gentlemen in three-piece suits. Dock workers like Ferrante squeezed with them through the entrance, everyone pushing and shoving each other like adolescents at a rock concert. The hundreds who didn't make it in must stand outside.

Fully a quarter of Italians are prepared to vote for Berlusconi again. It is an astounding degree of homage paid to man who faces allegations of abuse of power and bribery; who faces the scandal surrounding the underage escort Karima el-Marough, alias Ruby Rubacuori; who has been blasted for blatantly misogynistic comments; and who broke many promises as prime minister. Instead, the opposition, left-leaning judges and even the Germans are blamed for all that is not right with Italy.

At best, Bersani will win the Chamber and lose the Senate. That would likely result in a hung parliament.

Anti-German sentiment in Italy is high already. The entrance of German politicians into the battle may fuel that sentiment in a major way.

It is conceivable "Silvio the Savior" pulls off a stunning upset win in both the Chamber and Senate, but a Senate victory would still require a coalition (no party will come close to a majority).

It may be difficult if not impossible for any party to form a Senate coalition if Monti's party does poorly as expected.

Regardless Berlusconi there seems to be no good outcome for Italy.

Il declino italiano

La situazione economica italiana peggiora di mese in mese, il debito cresce alle stelle, la disoccupazione (la reale non quella ufficiale) aumenta in maniera drammatica ed il governo italiano e' l'unico in Europa a riuscire ad occuparsi di tutto tranne che della crisi economica.
Il mondo intero non discute di altro che di economia e piani di sviluppo, il primo ministro irlandese si pone la preoccupazione di vendere una Mercedes di servizio in quanto da un brutto esempio alla popolazione in periodi di crisi, invece i nostri politici discutono di argomenti essenziali quali

• vengo o non vengo alla festa del 25 aprile!
• aumentiamoci gli stipendi
• i privilegi della casta politica e come salvarli o aumentarli
• le attrici, veline e prime donne
  
• le intercettazioni
  
• le nomine RAI
  
• La puntata di Santoro e le vignette di Vauro

Per non aggiungere poi le mille imbecillita' di cui si occupano i giornali ed i politici ogni giorno.
Sembra incredibile da un punto di vista esterno che un intero paese vive in uno stato di indolenza.
I giornali italiani e stranieri snocciolano ogni giorno cifre drammatiche sulla economia italiana, in qualsiasi altro paese la classe politica si mobiliterebbe immediatamente per mostrare che lavora ad una soluzione, in Italia invece non si preoccupa neanche di un commento, ignora la situazione e dirotta l'attenzione del pubblico attraverso il controllo dei media su argomenti futili e su melodrammi politici.
Il tempo passa ed il declino dell'Italia si accentua senza che il governo abbia fatto ancora una riforma qualsiasi di un sistema ormai incancrenito.
Qualsiasi richiamo al dovere ed alla responsabilita' nei confronti del paese cade nel vuoto.
Ormai questa classe politica ha un solo scopo succhiare il sangue del paese fino all'ultima goccia senza porsi il problema del domani.
Loro non pensano al futuro e stanno condannando il paese ad un futuro di miseria morale ed economica.
Chissa' quando il popolo dei pecoroni italiani si svegliera'!