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.

Italian politics reaching new level of corruption

While the International Press is rightly blaming the Spanish Prime Minister Rajoy for a lavish consumption of alcohol in time of austerity.

Sept. 26 (Bloomberg) -- Spanish Prime Minister Mariano Rajoy and his advisers often consume more than 1,000 euros ($1,286) of alcoholic drinks when they fly on the government’s official jet, Interviu magazine reported in its Sept. 24 issue.

For Italians though, to waste 1000 euro on beer is merely a drop in the ocean of waste the Italian government is accostumed to.
Latest case, Italy's Ambassador to London, Giorgio Maria Economides decided to replace a simple Lancia with license plate "ITA 1" with a more artistic Maserati (shown below in front of the Embassy) at the bargain price of $200.000:




Way to go Ambassador in representing a broke country with class and style!

We must admit though that Italian politicians at home are far classier than our Ambassador in London.
Today Mr. Fiorito, the Regional Leader of the PDL (Berlusconi's party) has been arrested in Rome for embezzlement, he ransacked 1.3 million euro from the Region of Lazio for his many private pleasures, he was not alone 70+ more councillors did the same with public money.

Last week the Governor of Lazio, Polverini resigned after it was found that for more than 2 years the entire council of the Region of Lazio was hell-bent on spending public money like if there was no tomorrow.
The estimate is that in 2 years they spent over 30 million euro.
Some of the most interesting expenses are the following:

14000 euro in a wineshop
16000 euro to pay private electricity bills in arrears

thousands more paid for unspecified "collaboration services" to the fiancee of Mr. Fiorito
5000 euro dinners 
Toga Parties paid with public money: photos here
Hookers
Trips for councillors and lovers/hookers to exotic locations
Houses and Villas
Jeeps bought on the occasion of a rare snow storm in Rome

and much much more...

This is not an isolate case many more regions in Italy are facing the same scrutiny and new stories are surfacing on the Italian press each week.

Last week the Region of Piedmont has been searched by investigators after the discovery that all the regional councillors have requested refunds for travels and activities even during the summer stop of the regional Council.
The best part is that regions do not check if true what declared, it was enough for a councillor to say he travelled 5000 miles in one month to obtain refunds amounting to tens of thousands of euros per month.
For those interested in reading the full details here a link to published data

Although, let us not fool ourselves, this is NOT an attempt to clean up the house, this is action pointing to strike political forces and push them to accept another Monti term or at least to be servile when it comes to vote and accept the Prime Minister diktats.

Italy is between a rock and a hard place, Italian politics is rotten, diseased and inept at ruling the country, hell-bent as it is in ransacking public money for their private interests. They have no credibility left but they are still useful to Monti being discreditable and therefore prone to manipulation.
On the other side, an un-elected prime minister is ruling the country with no public consent and following EU diktats not ratified by the people.
Italians are being told that politicians are scum and they are unable to rule therefore an enlightened technician has to take control.

What if next elections will bring to another rotten parliament or a fragmented one unable to form a government?
Are we going to ask again Monti to rule the country because our politicians are unable to do it?
Are we going to suspend again the right of the people to decide of their future?
Would this still be a democracy?

Top Italian government leader declares country bankrupt

Mr. Bossi

In the last few hours there has been a series of declarations from Italian political leaders that are appalling!
The first was the leader of the Northern League, Umberto Bossi who is also the number two after Berlusconi in the current government coalition saying clearly that he knows Italy is gone and that he wants the Northern regions to become independent from the rest of the country. Today he reiterated that Italy will not survive, it is bankrupt and that the only solution he sees is to split the country so that the North can keep his money and not contributing to the rest of the country any more (hope they keep their debts as well which amount to the majority of the Italian debt).
For those who are not acquainted with Mr. Bossi, he is the leader of a racist party who obtained in the last national election 8% of the national votes with peaks of 20+ % in 2 northern regions, Mr. Bossi has always been famous for his colourful language, he is used to give the bird at every major event when talking of Italy or immigrants, his party has been advocating for throwing immigrants to the sea, shooting them before approaching the Italian coasts, reserving to immigrants special train wagons and buses so they do not mix with Italians since according to them they stink and are criminals.
His party is also strongly anti-rest of Italy and he has been advocating for years first the independence of the north from the rest of Italy, then at later stage a loose federal government and today he is back with his independence leitmotiv.
Berlusconi on the other side today declared the following after the reaction of the Italian President Napolitano asking serious and decisive action to the government in particular to fight the tax evasion and fraud epidemic: "I have done what I had to do, it is not my concern any-more now it is Parliament's business to decide" washing his hands of any responsibility and adding clearly the what he did was ordered to him from France and Germany, should anyone had a doubt that Italy was still a sovereign country.
Aside from any other consideration, declarations as such would be proof enough in any serious country that those persons are unfit to rule a country and would have been forced to resign.
The image international investors will get from this is that Italy is completely without leadership and ruled by madmen, which is true unfortunately.
Confidence in the country is fading fast and we are seeing a total disconnection from reality when it comes to Italian politicians.
While any other government enforce careful media declarations during a crisis, the two Italian top politicians are talking and shouting as if they were in a hill billy low-life bar talking of cars and chicks while burping and playing beer pong.
This is the image the Italian government is broadcasting internally and to the world
There has been of course no comment on any Italian newspaper in regards to those declarations, 90% of the media is controlled by Berlusconi but aside from this what is clear is that Italians are apathetic to this kind of language, what is appalling when seen from abroad is normal in Italy.
Proper language in the political life has never been a requirement..
Although this time, every single comment from the government is important, international markets have eyes and ears on Italy, they may not understand Italian antics, they may not be used to Berlusconi or Bossi saying one thing and after 24 hours do U-turn on their previous comments, but they are used to make conclusions on investments based on media declarations and political comments and the conclusion they are reaching right now is to run away from Italy and its foolish leaders.
Next week the current budget proposals could not be enough to stop the haemorrhage and thanks to this confident messages from our government we can count on increased pain to reach Italian people very soon. Never as before it is true that silence is gold, maybe it is time for the Italian political class to silence themselves for the greater good of the economy and our brains.

Globale warming does not exist in Italy !

The Italian Senate has erased the issue of global warming from the political agenda following a request of our most talented scientific minds: Marcello Dell’Utri, Domenico Nania e Adriana Poli Bortone (all members of the PDL governing Party).
Following their indications is now denying any human responsibility for the climate change occurring.
The document was signed by 34 senators of the majority party PDL and asked also to intervene urgently with the European Parliament and the G8 to rectify this misunderstanding of the scientists from all over the world in believing that global warming if unchecked will produce disasters soon.
According to this great scientific minds of the Italian Parliament we can go on polluting, ransacking and destroying as usual since there is no proof that humans are causing damage to the environment.
It would be interesting to know how much these potheads have been paid by Eni and other energy companies to support this madness.
For sure it will be a good laugh to see the government explaining to the EU these solid scientific conclusions.
Another proof that Italy is slowly drifiting into complete denial, isolation and devolution.

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'!