Three Of Italy's Top Four Political Parties Seek A New Parallel Currency

Authored by Mike Shedlock via MishTalk.com,

In a bid to appeal to the growing anti-euro sentiment in Italy, three of Italy’s biggest political parties seek a dual currency.

Italy’s leading opposition parties are calling for the introduction of a parallel currency to the euro, which they say will boost growth and jobs.

Three of the country’s four largest parties – the Five Star Movement, the Northern League and former prime minister Silvio Berlusconi’s Forza Italia – have proposed introducing a new currency following an election scheduled for next year.

The proposals for a parallel currency have replaced the opposition parties’ previous calls to leave the euro completely.

By settling on a dual currency, analysts say the parties hope to appeal to anti-euro sentiment in the country while avoiding, for now, the upheaval of an outright exit.

A poll by the Winpoll agency in March showed that only around half of Italians back the euro.

As the election nears, and with opinion polls currently pointing to a hung parliament, only the ruling Democratic Party is not proposing changes to the current euro set-up.

Next General Election

The next Italian General Election is due to be held no later than May 20, 2018.

Key Players

• M5S – Five Star Movement – Beppe Grillo, a comedian. The M5S is variously considered populist, anti-establishment, environmentalist, anti-globalist, and Eurosceptic. The “five stars” are a reference to five key issues for the party: public water, sustainable transport, sustainable development, right to Internet access, and environmentalism. In foreign policy, the M5S has disapproved military interventions of the West in the Greater Middle East (Afghanistan, Iraq, Libya) as well as any notion of American intervention in Syria.


• PD – Democratic Party – Matteo Renzi, former prime minister. The PD’s main ideological trends are thus social democracy and the Italian Christian leftist tradition.


• Northern League – Lega Nord – Matteo Salvini. Under Salvini, the party has emphasized Euroscepticism, opposition to immigration, and other “populist” policies, while forming an alliance with nationalist and right-wing populist parties such as France’s National Front, the Netherlands’ Party for Freedom and the Freedom Party of Austria at the European level.


• Forza Italia – Forward Italy – Silvio Berlusconi, a four-time Prime Minister. Under Berlusconi, FI’s long-time coalition partner was Lega Nord.

Silvio Berlusconi is prone to flip-flops and would likely do anything if it brought him back in power. However, PD + FI will likely not come close to 50%.

Early Elections?

On May 30, Bloomberg reported Italy Moves Toward Early Vote as Election Law Deal Nears

Italy’s biggest parties are considering a proportional system similar to the German model with a 5 percent cut-off for smaller parties, and lawmakers are due to discuss a first draft of the new law early next month. An agreement would remove any hindrance to snap elections, eliminating the need to wait for scheduled elections in early 2018.

Ultimately, it’s up to Italian President Sergio Mattarella to make the call on when to dissolve parliament. According to Italian newspapers including Corriere della Sera, Mattarella would prefer to let the government of Prime Minister Paolo Gentiloni, 62, a soft-spoken diplomat and Democratic-Party ally of Renzi’s, stay in power until next year.

While an early vote would put an end to a legislature that already saw three governments in power amid palace coups and constitutional-referendum defeats, a proportional system runs the risk of producing a hung parliament. An election this year would come at a delicate time for Italy, with its banking woes unresolved and the budget law for 2018 still to be approved.

The proposed new law “would likely not facilitate an outright victory by one of the three major political groups” resulting in a hung parliament, said LC Macro Advisers Ltd. founder Lorenzo Codogno who sees the likelihood of early elections at 60 percent.

That deal fell and I can find no other recent references regarding early elections.

Left Crumbles

On June 26, the Guardian reported Italy’s Centre-Right Wins Big in Mayoral Elections as Left Crumbles

An alliance of Silvio Berlusconi’s Forza Italia party and the anti-immigrant Northern League won 55% of the votes in Genoa, the northern port city that was a leftwing stronghold but which the right will now govern for the first time in more than 50 years.

PD leader Matteo Renzi, 42, who has been seeking to make a comeback since stepping down as prime minister in December, was the clear loser in Sunday’s vote.

The centre-left has governed Italy for four years, during which time the economy grew by only half the eurozone average. Three different PD premiers have struggled to shore up a banking system strangled by bad loans, and to manage half a million migrants who came by boat from north Africa.

Sunday’s vote – the second round for cities where no one candidate won more than 50% two weeks ago – is one of the last before a general election due by the end of May 2018, but it may not be a reliable indicator of what will happen then. The first-past-the-post voting system used at the municipal level, which favours coalitions, may not be replicated at a national level, where a proportional system is now in place.

Genoa is the latest of a string of defeats in the PD’s traditional strongholds. Last year it lost Turin, Italy’s fourth-largest city, and the capital Rome, both to the Five Star Movement (M5S), which was founded only eight years ago.

M5S, which opinion polls say is slightly more popular than the PD nationwide, performed very badly in the first round of voting on 11 June and made the run-off in only one of the 25 largest cities. It added eight mayors to its modest tally.

“We now have 45 mayors, up from 37 before, which is an increase of 20%,” M5S founder Beppe Grillo said on his blog. “Every damned election we are growing and that is what counts.”

Two Things

M5S, NL, and FI appear likely top a combined 50%, perhaps easily. That does not necessarily mean a coalition will form.

The two things and possibly the only two things that unite the Five Star Movement, the Northern League, and Forza Italia are a desire to crush Matteo Renzi and a desire to get Italy off the Euro.

And when it comes to Berlusconi’s views on the euro, one has to question his sincerity. He has changed his position many times.

Why Every European Country Has A Trump Or Sanders Candidate

Authored by Richard Drake via TheAmericanConservative.com,

The suicide in the Friuli region of northern Italy earlier this year of a 30-year-old man, identified in the newspapers only as Michele, has become a symbol of the country’s unemployment tragedy, particularly as it affects young people.

Though much worse in the South, the country’s economic crisis also has had a blighting effect on the North. The national unemployment rate now stands at nearly 12 percent. A 40 percent youth unemployment rate nationwide, however, has people speaking of a generational apartheid in Italy. There is no work to be found for young people. In the workplace, comparatively speaking, they have been walled off from the rest of the population.

Friuli is a region of plain and mountain in the northeastern part of Italy, flush against borders to the north with Austria and the east with Slovenia. The annals of Friuli antedate by many centuries the arrival of the ancient Romans, who founded the colony of Aquileia there nearly two hundred years before Christ. The barbarian invasions swept over Friuli in the general wreckage of the Roman Empire. An Aquileian state arose in the Middle Ages, but was absorbed in the 15th century by the expanding Venetian empire. Then Friuli passed through French and Austrian phases of occupation and control before becoming part the newly founded Kingdom of Italy, in 1866.

The Friulani, a highly energetic and resourceful people steeped in the work ethic common to the peasant and artisanal cultures of traditional Europe, tilled the land and also gained a well-deserved reputation for their skill in specialty crafts and the building trades. Typically in such cultures, the work that a man did defined him. The modern world has changed those old ways of life, but the culture they generated persists. More recently, Friuli became renowned for its small businesses and factories, which played a vital role in the national economy. There was still hard work for the Friulani to do.

From his mother’s milk, Michele would have imbibed the work ethic of his native region. He would have thought of work as dignity and honor. In a suicide note, he claimed to be bereft of such things and of hope. “Desire has passed me by,” he wrote. Michele never had been able to find a meaningful job and had despaired of ever finding one. Contemplating his blank future, a sense of deep frustration had crushed his spirit. He hoped that his parents would forgive his dreadful act, but could not envisage a place for himself in a society without work.

No less than many other regions in the country, Friuli has been devastated by the economic crash of 2008 and its seemingly permanent aftermath. Hundreds of its small businesses and factories have closed, leaving many thousands unemployed. Michele’s father called his son’s death “the defeat of a moribund society.” What other way is there to describe a society unable to create work for its young people?

One of Italy’s rising political figures, Beppe Grillo of the politically eclectic Five-Star Movement, has proposed a guaranteed citizen income for all Italians. His reasoning appears to be that the Italians should be getting something from their government other than its slavish devotion to the corrupt oligarchy of the banks and corporations that rule the country.

There is a strong Bernie Sanders and Jill Stein component in the Five-Star Movement, as well as an admiration for the challenge that Hugo Chávez threw down to the multinationals in Venezuela. Grillo also has praised Ecuador’s Rafael Correa for his opposition to the International Monetary Fund, an institution that the Italian leader reviles as a battering ram of noxious austerity policies. Since the recent presidential election in the United States, Grillo has praised Trump as a much-needed change-of-air in world politics. Change of any kind, a powerful sentiment in the United States last fall, exerts the same kind of force in Italy now.

Even if a guaranteed citizen income initiative were to prevail and become law, the main problem underscored by Michele’s death would still remain. An allowance conjures up the image of juvenile dependence. A national welfare program for all citizens certainly is preferable to leaving ever rising numbers of them in want, but it would not solve in a socially edifying way the anterior problem of work. Michele was not asking for an allowance. He wanted work to do. This is a human need that societies deserving of survival are obliged to supply, a point raised by Thorstein Veblen in the book of his he valued most, The Instinct of Workmanship (1914). Human beings, he wrote, are called by nature to useful effort. It is not only the deprivations and frustrations associated with sex that undermine and subvert the human personality. He judged the men who live by moving money around to be the greatest peril of all to those who live by work.

The problem of work in Italy today belongs to the class of social consequences identified by Pier Paolo Pasolini in a famous Corriere della Sera article in 1974. “The Italians are no longer what they once were,” he observed. By this statement, Friuli’s greatest poet, filmmaker, and social critic meant that Italy’s traditional values had undergone an anthropological mutation. The country had abandoned its traditional way of life, which in its peasant culture had achieved a kind of poetic synthesis in the saying of Padron ‘Ntoni, novelist Giovanni Verga’s lead character in I Malavoglia (1881): “He is richest who has the fewest wants.” Pasolini feared that the new values of a hedonistic consumer society would be a poor substitute for Italy’s Christian and socialist ideals. What a debased fate for Italy, to come through the civilization-defining vicissitudes of its millennial history, only to end up ignobly aping American-style conspicuous consumption.

Pasolini had in mind a particular phase of the globalized economy, which since the 1970s has sped forward on the principle that money must be completely liberated to maximize profits for those who have it. It is immediately evident why this golden rule for today’s economy, though achieving its purpose of profit-maximization, has been a poor proposition for most of the working people of the Western world.

While rates of extreme poverty worldwide have declined in recent decades, the means to produce such a result have required an outsourcing of the West’s manufacturing base. The coincidental surge in profits made possible by the relocation of manufacturing jobs to countries unencumbered by high wages, labor unions, and environmental laws has with perfect justice sparked a political firestorm.

Nobel Prize-winning economist Joseph Stiglitz explained in Globalization and Its Discontents (2004) that the basic problem with the world’s current financial arrangement concerned the institutions and organizations commanding it. The International Monetary Fund, the World Bank, the World Trade Organization, the U.S. Treasury, and the European Monetary Union protect special interests, Wall Street most of all. Despite their lip-service in democratic argot, the very last thing seriously on the minds of the top financial policy makers is the well-being of ordinary people.

As a result of the methods used to promote globalization, the consequences for the West have been tragic. Work is becoming increasingly uncertain and insecure, or it is in the process of disappearing altogether. It would take Veblen’s talents for social satire, which are unsurpassed in all of American literature, to depict with the essential exactitude of artistic synthesis how far the United States has fallen away from democratic grace, the country’s dramatically widening gap between the haves and the have-nots being what it is. Clearly, we are on the wrong course. What the robotics revolution, now at an incipient stage, will do to further diminish opportunities for Western peoples to work can be easily imagined, if the economic imperative of corporate capitalism is the rule to go by.

The same desolating trends can be seen in Europe, where people increasingly regard the European Union as a Trojan horse. The economic elites and their political front-men responsible for this image-challenged contraption lose public support with each new poll. The people by and large blame the European Union and the other accessories of globalization for their worsening standard of living. When informed by the establishment media that thanks to globalization Europe has never been more prosperous and peaceful, Europeans in historic numbers are reacting with disbelief. Their deepening sense of betrayal propels the surge of populism that defines the politics of Europe today.

Arguments long-settled in favor of deregulation, liberalization, open borders, and other globalization watchwords have been reopened. The constituency is growing for a politics that puts the well-being of Europeans first. Political measures calling for the protection of European jobs and cultures have gained a following unforeseen prior to 2008.

In Italy, for example, 77 percent of the people questioned in a recent poll could see no advantage to them at all from the country’s membership in the European Union. Sixty-four percent of them expressed hostility toward it. Eight Italian businesses out of 10 can find nothing positive to say about the European Union. It is seen to be a creature of the banks and the big financial houses. As public relations disasters go, this one has unfolded on an epic scale as the underlying populations, long left out of consideration by the economic elites, have begun to sense the fate their masters have in store for them.

Leaving underlying populations out of consideration was a special feature of the planning that went into globalization. They have been voiceless. In America, Trump gave them a voice, and they responded to him with their political support. It did not matter that he came before them without a plan for their deliverance. That he came to them at all mattered. He understood the depth of the anger and alienation in America against a status quo personified by his opponent, Hillary Clinton, whose repeated and munificently rewarded speeches before the captains of finance on Wall Street effectively branded her as the safe candidate for all who wanted to leave existing economic arrangements fundamentally undisturbed.

Trump may go down in history as a president who was hopelessly out of his depth on all vital matters, but his presidential campaign will be studied for as long as historians have an interest in American politics. It was a masterpiece of intuition based on an uncannily correct judgment about the spirit of the times. Bernie Sanders had the same insight, but the Democratic Party turned out to be much more corrupt and vulnerable to manipulation than the Republicans, an astonishing feat. In possibly an even more flagrant instance of interference in the American democratic process than anything yet proven against Vladimir Putin, internal machinations weighted the primary process against Sanders. The Republicans tried to head off Trump, too, but a fiercely loyal base and a dearth of plausible opponents gave him an easy victory in the primaries.

At an academic conference in New York in May a year ago, I participated in a conversation among scholars, journalists, and government officials who generally thought that Trump would not even win 20 percent of the national vote. His ridiculous campaign surely would fall of its own dead weight. Professional pollsters, though not so far wrong as my conference colleagues in New York, also missed what appears to be the main story of the campaign: a loss of faith, unprecedented in its severity, by the American people in the rules of the game. There is no other way to explain the stunningly bizarre choice that they made for the man to lead them.

That Trump has rapt admirers and self-confessed imitators in Europe should come as no surprise because the mood he represents is an international phenomenon. Virtually every European country has a Trump candidate saying basically the same things that he did in his campaign against immigrants, globalization trade agreements, and the establishment media. Italy has two such candidates: Grillo and the leader of the xenophobic League Party, Matteo Salvini. They are riding a wave of anti-establishment outrage and in tandem are outpolling the two major mainstream parties, the center-left Democratic Party, now in internal disarray from schism, and the center-right Go Italy Party.

As Europe since the end of World War II has slipped ever more securely into the orbit of American military and economic power, it is only to be expected that the Atlantic Community will be increasingly homogeneous. The Italian case is most instructive about the fundamental meaning of America for Europe. Italy’s greatest postwar novelist, Cesare Pavese, explained in The Moon and the Bonfires (1950), “America is here already. We have our millionaires and people are dying of hunger.” Contemporary Italy, in keeping with Europe as a whole, is best understood as an example of America’s role as the prime mover in international affairs and economics, or of how the world works per necessità, in Machiavelli’s phrase, according to the dictates of those who hold irresistible power.

By outsourcing its manufacturing base in search of portfolio enhancement, the United States exercised a freedom for which liberty-loving European businessmen, bankers, and politicians hungered as well. Unable to compete with 50-cent per hour labor, the working classes in America and Europe would have to go to the wall, but while adjusting their blindfolds they could rest assured that in the fullness of time the wonder-working ways of the free market would redeem the world.

Such a promise held no meaning for Michele, and he left this world slamming the door. “I feel betrayed,” he wrote in his suicide note. Who can say which other factors drove him in those last desperate hours before he took his life? We do know what his stated reason was for doing it. Work was the final thought that he had. How else could a Friulano give a good account of himself in this life?

Italy's 5-Star Party Demands Immediate Elections After Failure Of Electoral Reform

Not everyone is satisfied with today"s news that Italy"s early elections will likely be pushed back. Italy"s anti-establishment 5-Star Movement called on Thursday for immediate national elections after the previously reported deal on electoral reform - which would have resulted in the next Italian elections taking place in September, at the same time as Germany"s - among the major parties unraveled.

"There is no chance of starting all over again. The legislature should end here and we should hold immediate elections," said Luigi Di Maio, who is widely expected to be the 5-Star"s candidate for prime minister. He spoke shortly after the lower house voted to send the electoral reform bill back to a cross-party commission for further discussion.

Today"s events have reintroduced confusion about the Italian political timeline: as Reuters adds, upping the pressure for an early election, the parliamentary party leader of the ruling Democratic Party, Ettore Rosato, told reporters he did not know how the coalition government could hold together following the rupture over the voting law.

Also moments ago founder of the Five Star Movement, Beppe Grillo, said in a post on his blog that the Democratic Party now wants to avoid early elections, and regrets that no agreement found on electoral law.

As a reminder, the Five Star (M5S) party has erased the PD"s lead over the past two years, and according to recent polls was neck and neck, if not leading in the polls.

The Ruling Democratic Party and the Anti-Establishment 5 Star Movement Are Polling Neck-and-Neck
Opinion polls on voting intentions at Italy"s general elections

Looking at Italian bonds, there has been a modest reaction to the latest news, although much of that may be a function of the ECB"s "dovish relent" earlier in the day, which has pushed European yields broadly lower.

If An Electorate Falls In The Forest, Is Their Voice Heard?

Authored by Danielle DiMartino Booth,

Quizzically-inclined quantum physicists quench their intellectuality by quoting philosophers first, then their fellow scientists.

It is in fact questionable whether quantum physics would have come into being if not for George Berkeley’s 1710, “A Treatise Concerning the Principles of Human Knowledge.” Berkeley’s most famous saying is, ‘esse est percipi,’ or, ‘to be is to be perceived.’ He elaborated using the following examples:

“The objects of sense exist only when they are perceived: the trees therefore are in the garden, or the chairs in the parlour, no longer than while there is some body by to perceive them.” So matters of matter exist only in our mind. It is critical to note that Berkeley never posed a question but rather he made a statement of the world view through his metaphysical personal prism.

It was not until the June 1883 publication of the magazine The Chautauquan that the question was put as such: “If a tree were to fall on an island where there were no human beings would there be any sound?” Rather than pause to ponder, the answer followed that, “No. Sound is the sensation excited in the ear when the air or other medium is set in motion.”

A vexatious debate has ensued ever since, one that eventually stumped the great Albert Einstein who finally declared “God does not play dice.” In recognizing this, Einstein also resolved himself to the quantum physics conclusion, that there is no way to precisely predict where individual electrons can be found – unless, that is, you’re Divine.

Odds are high that the establishment, which looks to ride away with upcoming European elections, is emboldened by quantum physics. The entrenched parties appear set to retain their power holds, in some cases by the thinnest of margins. What is it the French say about la plus ca change? Is it truly the case that the more things change the more they stay the same?

Is this state of stasis sustainable, you might be asking? Clearly the cushy assumption is that the voices of those whose votes will not result in change will be as good as uncast, unheard and unremarkable.

Except…and this is a big ‘except’ – time is on the side of the castigated and for one simple reason – they are young. Consider Great Britain’s majority decision to leave the European Union (EU). An un-astonishing 59 percent of pensioners voted to leave the EU while only 19 percent of those between the ages of 18 and 24 supported Brexit. The aged see the EU as a cash drain at just the wrong time, and for good reason while the young view those 28 member states as the land(s) of opportunities.

With the caveat that polling has been revealed to be anything but reliable, young voters in France see things a might bit differently. Nearly half of surveyed French youth say they will vote for far-right candidate Marie Le Pen. At the opposite end of the spectrum, the dark horse far-left candidate, Jean-Luc Melechon, has enjoyed a late-stage surge in the polls by vowing to increase wages and shorten workweeks. Both insurgent camps view the lead contender, former banker Emmanuel Macron as the epitome of elitism, their ‘Hillary.’

Polls show the initial round of voting, which takes place on April 23rd, will make Macron sweat, but that he will survive to stand as the strongest contender in the second round. The status quo thus prevails, which for many represents continued economic stagnation and evasion of fiscal reforms.

Now factor in the rising recognition of the fallibility and limitations of central bankers. Mario Draghi, encouraged shall we say by the Germans, looks set to begin tapping the brakes on Europe’s answer to quantitative easing. Let’s be clear. Draghi has made it plain that he won’t go down without a fight. Nonetheless, it appears monetary policy will slowly become less accommodating, dragging on growth in the peripheral countries.

And then there is the matter of the refugee crisis, the cost of which few in the United States fully appreciate. Faced with impossible living conditions and no access to work in Jordan, Turkey and Lebanon, hundreds of thousands have opted to risk the journey to Europe. In 2015, 1.3 million asylum seekers landed in Europe, half of whom traced their origins to Syria, Afghanistan and Iraq. That number plunged in 2016 to 364,000 owing mainly to a deal between the EU and Turkey which blocks the flow of migrants to Europe.

The cost, not surprisingly, is enormous. Europeans spend at least $30,000 for every refugee who lands on her shores. By some estimates, the cost would have been one-tenth that, as in $3,000 per refugee, had the journey to Europe NOT been made in the first place.

Of course, aid money helps cover the cost of the crisis. Some $15.4 billion, about 10 percent of global aid monies raised in 2016, was directed to hosting and processing migrants in developed countries last year. While charity lessens the burden, it can’t staunch anger at headline-grabbing statistics claiming that Chancellor Angela Merkel’s ‘failed migrant policy’ will cost German and EU taxpayers $46 billion in the two years ending 2017.

Fear thee not, the consensus is that September’s elections in Germany will come and go with little to no fanfare; pro-Europe candidates enjoy wide leads in the polls. Many macroeconomists expect the year to end with the strongest ties in generations between Germany and the rest of the eurozone, led by France. Bullish analysts expect the euro to shake its jitters and end the year above €1.10.

The biggest obstacle to a happy ending, for the time being at least, comes down to Italy. General elections must take place by May 2018 but an early vote remains a possibility if the current prime minister of the eurozone’s third-largest economy does not survive the year. Investors, for their part, yawn at the mention of Italy. As the Wall Street Journal pointed out in a recent story, numbness tends to set in after 44 governments have come and gone in the space of 50 years.

The most recent survey revealed a record one-in-three Italians would vote the Five-Star Movement into power if elections took place today. The rebellious, populist party has tapped the anxieties of Italians whose per capita economic output has suffered the most since the euro was formed in 1999. Even the Greeks can claim to have suffered less.

Is an Italian uprising in the cards? The bond market certainly doesn’t buy into the potential for major disruption, grazie Signore Draghi.

At some point demographics will start to matter. The situation in France is no doubt grave, with youth unemployment at nearly 24 percent. But that pales in comparison to Italy where 39 percent of its young workers don’t have jobs to go to, day in and day out. Older voters determined to keep the establishment intact will begin to die off. In their wake will be a growing majority of voters who are increasingly disenfranchised, disaffected and despondent.

If there’s one lesson Europeans can glean from their allies across the Atlantic, it’s that bullets can be dodged, but not indefinitely. As we are learning the hard way, necessary reforms are challenging to enact. Avoidance, though, will only succeed in feeding anger and despair. The longer the voices of the desperate go unheard, as just so many silently falling trees in the forest, the more piercing their cries will be in the end.

Italy Falls Out Of Love With The Euro: Beppe Grillo Resurgent In The Polls

Authored by Mike Shedlock via MishTalk.com,

Recent polls for Italian politicians supporting the eurozone and EU have collapsed.

Pro-Europe polls are highly likely to get worse as a  further splintering of Matteo Renzi’s PD party takes place.

It is not out of question for Beppe Grillo’s eurosceptic Five Star Movement (M5S) party to achieve an absolute majority in the next election. However, please note that 40% is the threshold for a “majority”.

The Financial Times reports Italy is Falling Out of Love with Europe.

Foreigners often underestimate Italy’s ability to sidestep calamity. That said, the stakes are higher now than in 1992. Solutions may prove harder to find. The reason lies in the radically different EU and Mediterranean contexts in which Italy finds itself.

Some of contemporary Italy’s challenges appear similar to those of the early 1990s. The party system is once again in fragments. The ruling centre-left Democratic party (PD) split last month. The right is divided. The most popular opposition party is the anti-establishment Five Star Movement. Since November 2011 four prime ministers have taken office not because voters chose them, but because of a financial emergency, factional squabble, party coup and failed constitutional reform.

Matteo Renzi, the former premier and PD leader, suffered a blow this month when it emerged that Tiziano Renzi, his father, and Luca Lotti, a close political ally, had been caught up in a judicial probe into suspected graft in public procurement.

The most disturbing comparison between 1992 and the present day concerns the Italian economy, which is projected this year to be the slowest-growing in the eurozone. Public debt is more than 132 percent of gross domestic product. Unemployment is almost 12 per cent; the youth jobless rate is over 37 percent.

As a consequence, ever more Italian politicians question the merits of eurozone membership. So do Italian voters. In a Eurobarometer poll published in December, 47 percent called the euro “a bad thing” for their country and only 41 percent “a good thing”. This is the big difference with 25 years ago.

As long as the moderate left or right governs Italy, it may be possible to contain this disenchantment with the EU and the euro. But the PD’s fissures are the latest sign that the party system is cracking under the strain. The Five Star Movement is waiting in the wings.

PD Suicide

Via email, Eurointelligence comments on the costs of Matteo Renzi’s PD’s suicide mission.

We have been saying it for a while – political parties that preoccupy themselves with their internal divisions are electorally doomed. It is happening to the Labour Party in the UK, and it is now happening to the Partito Democratico. This tendency is now being picked up by the polls, which show the Five Star Movement ahead of the PD by five points. We are now at the point where it becomes increasingly improbable for the PD to regain power after the next elections. They cannot do it on their own, and they do not have natural coalition partners to help them. Even a hypothetical alliance between Matteo Renzi and Silvio Berlusconi would not, on its own, meet the 40% majority threshold for a coalition, and there is no way the two parties would enter the election with a pre-arranged electoral pact in the first place.

The Five Star Movement is now only 6 points away from an absolute majority that would allow it to govern on its own – assuming that the present electoral law for the chamber of deputies forms the basis of a new electoral system for the Senate. If one adds up all the non-extremist parties (and let’s count Berlusconi’s Forza d’Italia among them for the sake of argument), one would get to just over 40% – with the PD, Forza Italia, and the New Centre Right of foreign minister Angelino Alfano which only gets 2.8%.

Worse for the PD, its support will fall even more after the split of the party becomes a reality – which it will before the elections. The poll puts the hypothetical support for PD dissidents at 7.1%, which would reduce the PD’s overall support to under 20%. The new left, together with the old left, would have the support of close to 10%. All this shows that there can be only two election outcomes: either a fragmented parliament, with unstable and shifting coalitions, or a majority reign of the Five Star Movement. The Five Star Movement promises not to enter coalitions, and it will be interesting to see whether the party maintains that position after the elections.

On the issue that interests us the most – Italy’s future in the EU, and in the eurozone in particular – the picture is even more grim. The only two parties that unconditionally support Italy’s membership of the eurozone are the PD and the New Centre Right. Forza Italia is toying with the idea of a parallel currency, while the Five Star Movement has pledged a consultative referendum on Italy’s future in the euro. While this referendum can legally not end Italy’s membership in the eurozone, it would send a devastating signal to the outside world.

The Five Star Movement has its own share of scandals – for example involving the new municipal government in Rome, and the party is in an internal state of war over the candidate for the mayoral elections in Genoa. But none of that seems to stick.

Our conclusion is that the Five Star Movement is rational to avoid alliances with other parties, as this approach is paying off electorally. With that strategy in place, they will either gain a sufficient majority (over 40%) at the next elections, or in the one after that.

Italian Polls

Eurointelligence referenced a specific Italian poll that has been since superseded.

However, support for PD is clearly on the wane. Let’s take a look at all of the recent Italian Election Polls.

In only one poll since March 9 (clearly an outlier) did Matteo Renzi’s PD party come in first place. Moreover, PD has not yet split for polling purposes but it will.

I fail to see how M5s was “6 points away from an absolute majority that would allow it to govern on its own” as Eurointelligence states, but a coalition of eurosceptic parties totaling over 50%  is easily at hand.

Support for M5S (Five Star Movement) + Fi (Forza Italia) + LN (Lega Nord), all eurosceptic parties, totals 54.5%in the most recent poll.

Forza Italia is former prime minister Silvio Berlusconi’s  party.

On March 9, Bloomberg reported  Enter Berlusconi: A Man, a Ban, and His Plan to Restore the Lira.

If elections were held today, eurosceptic parties would easily hit not only a 40% threshold but a 50% threshold as well.

Whether eurosceptic could agree to form a coalition is another matter, but I suspect they would, especially if the alternative was a minority government led by PD.

Italy Increasingly Likely To Abandon The Euro

Submitted by Mike Shedlock via MishTalk.com,

An analysis of the political setup in Italy shows eurosceptics are on the verge of taking control of the country.

The only missing ingredient is an early election. And early elections are now the odds-on favorite.

Let’s back up a bit to fill in the pieces as to how things got to this point.

1. Former prime minister Matteo Renzi stepped down in December after holding a referendum that failed miserably. See Renzi Resigns Following Crushing Referendum Defeat: Beppe Grillo, Marine le Pen, Matteo Salvina Tweets


2. Italy’s president, Sergio Mattarella, appointed Paolo Gentiloni as the new prime minister after Renzi resigned. See Meet Paolo Gentiloni, 4th Consecutive Italian Technocrat Appointed Prime Minister: Renzi Not Vanquished Yet


3. The president said he would not hold new elections until differences between how the lower house of parliament assigned seats.


4. Point number three has been resolved. Both houses of Parliament are back on a proportional system.

New Elections

• New elections are possible now but the next scheduled elections are not until 2018.


• Matteo Renzi wants new elections in June. Even though he resigned, he wants back in. Renzi wants new elections this year because PD may oust him if he waits.


• Beppe Grillo wants elections as soon as possible because he believes he will win, and also because FI leader Silvio Berlusconi cannot run for prime minister until 2018 because of a tax fraud conviction.


• Berlusconi does not want early elections, but he is in the minority.

It is up to the president to call new elections, and there is pressure form at least two fronts for him to do so.

Election Polls

Chart from Opinion polling for the next Italian general election.

The situation for Renzi is actually way worse than it appears. Not only do polls tend to over-play support for PD, the party is about to splinter. Via email, Eurointelligence explains …

Whatever Happens in Italy, Grillo is Winning

Our pessimism about the political outlook for Italy was confirmed once more this morning with reports that the PD is now very likely heading for a split – the trigger being disagreement over the election date. Pier Luigi Bersani, Renzi’s predecessor as general secretary of the party, came out strongly against early election in June saying that the PD would be finished as a party if Renzi were to go ahead.

Renzi could assemble a majority in the Italian parliament in favour of a new electoral law and early elections, so this is technically doable. The question is, at what cost? Beppe Grillo’s Five Star Movement officially supports early elections, but Renzi probably has a point when he says that another year of political chaos in the PD would drive even more voters to Grillo, whose party thrives on the chaos in the country. In other words, Grillo wins both ways, and the likely design of the electoral law will also be favourable to his party. So much for the theories that there would be a technical stitch-up to keep the Five Star Movement out of power. The Italian establishment is not sufficiently united to be able to do this.

Massimo D’Alema, Renzi’s fiercest oponent within the PD, says he has done research on the potential electoral support for a party to the left of the PD which could count on 11-14% of the vote. With a weak centre-right and a fragmented left, the probability of a victory by the Five Star Movement, perhaps in alliance with other radical forces, must now be considered very high.

Wrong Five Ways

The don’t worry, it will never happen crowd said …

1. Renzi would win the referendum – Wrong


2. Renzi would not resign if he lost – Wrong


3. Renzi would gracefully step aside after he resigned – Wrong


4. PD would not splinter – Wrong


5. The other parties would pass legislation making it impossible for M5S to gain control – Wrong

That same don’t worry, it will never happen crowd also proposed

1. An alliance between Grillo and other parties won’t happen


2. If an alliance does happen, parliament will not approve a referendum on the Euro


3. If there is a referendum on the Euro, people will vote against leaving


4. It still requires a constitutional amendment

Point number 6 is in the works right now. And if such an alliance does form and win (both are highly likely in my opinion), then all that is left to stop “Italeave” is fearmongering and points 8 and 9.

Beppe Grillo: "The Amateurs Are Conquering The World Because The 'Experts' Destroyed It"

Despite Italian Prime Minister Mateo Renzi"s solemn denials that he will resign when, not if, the Italian constitutional referendum fails on December 4, it is now obvious that the Italian government is on the verge of collapse. And in yet another U-turn Renzi admitted as much himself, when according to La Repubblica, he told his entourage this weekend that the government would fall if he loses Dec. 4 constitutional referendum. “It’s very simple: if I lose the referendum this government falls. At that point we’ll see who is capable of reaching an agreement for another administration,” Renzi was quoted as saying

Well, one person who may or may not be capable, but is certainly waiting for his opportunity is Beppe Grillo, leader of Italy’s Five Star Movement, who has launched an assault against the government in Rome. The battle, which he says he will soon win, is taking place in Brussels, the city where he marched against Chinese steel dumping and in favour of the European steel industry.

While Grillo made the daily front pages in 2013, when his M5S, Five Star movement won the second most popular votes for the Italian Chamber of Debputies (but obtained just 109 deputies out of 630 due to an electoral system which favoured parties running in coalition), he has since faded from the spotlight. So, with just two weeks until Grillo is back with a bang, here is a fascinating interview with Grillo courtesy of Euronews, which serves as an opportunity for readers to get reacquainted with his ideology, especially now in the aftermth of Brexit and Trump, when many of his policy points have been validated by the voting public.

Perhaps the most notable point brouth up by Grillo is his answer whether he would govern Italy if given the opportunity, after the failure of Renzi. This is what he said:

We want to govern, but we don’t want to simply change the power by replacing it with our own. We want a change within civilisation, a change of world vision. We’re talking about dematerialised industry, an end to working for money, the start of working for other payment, a universal citizens revenue. If our society is founded on work, what will happen if work disappears? What will we do with millions of people in flux? We have to organise and manage all that.

From our side, we want to give the tools to the citizens. We have an operating system called Rousseau, to which every Italian citizen can subscribe for free. There they can vote in regional and local elections and check what their local MPs are proposing. Absolutely any citizen can even suggest laws in their own name. This is something never before directly seen in democracy and neither Tsipras nor Podemos have done it.

If that is Grillo"s checklist of conditions he needs to take charge, he may find more appropriate career choices elsewhere, unless of course he merely wants to be constantly "in the running", without actually ever winning.

Whatever the reason, we agree with the next point he makes, namely the overthrow of "experts" by amateurs.

euronews: “Do you think appealing to people’s emotions is enough to get elected? Is that a political project?”

Beppe Grillo: "This information never ceases to make the rounds: you don’t have a political project, you’re not capable, you’re imbeciles, amateurs… And yet, the amateurs are the ones conquering the world and I’m rejoicing in it because the professionals are the ones who have reduced the world to this state. Hillary Clinton, Obama and all the rest have destroyed democracy and their international policies. If that’s the case, it signifies that the experts, economists and intellectuals have completely misunderstood everything, especially if the situation is the way it is. If the EU is what we have today, it means the European dream has evaporated. Brexit and Trump are signs of a huge change. If we manage to understand that, we’ll also get to face it.”

Bingo, or as Nassim Taleb put its, the "Intellectual-Yet-Idiot" class. It is the elimination of these so-called "experts", most of whom have PhDs or other letters next to their name to cover their insecurity, and who drown every possible medium with their endless, hollow, and constantly wrong chatter, desperate to create a self-congratulatory echo chamber in which their errors are diluted with the errors of their "expert" peers, that will be the biggest challenge for the world as it seeks to break away from the legacy of a fake "expert class" which has brought the entire world to its knees, and has unleashed the biggest political tsunami in modern history.

One thing is certain: the "experts" won"t go quietly as the "amateurs" try to retake what is rightfully theirs.

Full must see interview below:

* * *

And here are the translated and transcribed key excerpts.

Gardenia Trezzini, euronews
“Beppe Grillo, our meeting takes place at a time that, without undue exaggeration, can be labelled ‘historic’. That’s to say, the election of Donald Trump to the presidency of the United States. What’s your take on that?”

Beppe Grillo, Leader of the Five Star Movement
“It’s an extraordinary turning point. This corn cob – we can also call Trump that in a nice way – doesn’t have particularly outstanding qualities. He was such a target for the media, with such terrifying accusations of sexism and racism, as well as being harassed by the establishment – such as the New York Times – but, in the end, he won.

“That is a symbol of the tragedy and the apocalypse of traditional information. The television and newspapers are always late and they relay old information. They no longer anticipate anything and they’re only just understanding that idiots, the disadvantaged, those who are marginalised – and there are millions of them – use alternative media, such as the Internet, which passes under the radar of television, a medium people no longer use.

“With Trump, exactly the same thing has happened as with my Five Star Movement, which was born of the Internet: the media were taken aback and asked us where we were before. We gathered millions of people in public squares and they marvelled. We became the biggest movement in Italy and journalists and philosophers continued to say that we were benefitting from people’s dissatisfaction. We’ll get into government and they’ll ask themselves how we did it.”

euronews
“There is a gap between giving populist speeches and governing a nation.”

Beppe Grillo
“We want to govern, but we don’t want to simply change the power by replacing it with our own. We want a change within civilisation, a change of world vision.

“We’re talking about dematerialised industry, an end to working for money, the start of working for other payment, a universal citizens revenue. If our society is founded on work, what will happen if work disappears? What will we do with millions of people in flux? We have to organise and manage all that.”

euronews
“Do you think appealing to people’s emotions is enough to get elected? Is that a political project?”

Beppe Grillo
“This information never ceases to make the rounds: you don’t have a political project, you’re not capable, you’re imbeciles, amateurs…

“And yet, the amateurs are the ones conquering the world and I’m rejoicing in it because the professionals are the ones who have reduced the world to this state. Hillary Clinton, Obama and all the rest have destroyed democracy and their international policies.

“If that’s the case, it signifies that the experts, economists and intellectuals have completely misunderstood everything, especially if the situation is the way it is. If the EU is what we have today, it means the European dream has evaporated. Brexit and Trump are signs of a huge change. If we manage to understand that, we’ll also get to face it.”

euronews
“Until now, these anti-establishment movements have come face-to-face with their own limits: as soon as they come to power they seem to lose their capabilities and reason for being. Alexis Tsipras, in Greece, for example…”

Beppe Grillo
“Yes, I agree.”

euronews
“Let’s take the example of Podemos in Spain. They came within reach of power, then had to backtrack. Why?”

Beppe Grillo
“Because there’s an outdated way of thinking. Because they think power is managed by forming coalitions or by making agreements with others.

“From our side, we want to give the tools to the citizens. We have an operating system called Rousseau, to which every Italian citizen can subscribe for free. There they can vote in regional and local elections and check what their local MPs are proposing. Absolutely any citizen can even suggest laws in their own name.

“This is something never before directly seen in democracy and neither Tsipras nor Podemos have done it.”

euronews
“You said that you’re not interested in breaking up the European Union, but rather in profoundly changing it. What can a small group of MEPs do to put into motion such great change?”

Beppe Grillo
“The little group of MEPs is making its voice heard, but there are complications… In parliament, there are lobby groups and commissions. Parliament decides, but at the same time doesn’t decide.

“We do what we can, in line with our vision of a world based on a circular economy. We put forward the idea of a circular economy as the energy of the future and the proposal has been adopted by the European parliament.”

euronews

“One hot topic at the Commission at the moment is the problem of the conflicts of interest concerning certain politicians.

“President Juncker suggested modifying the code of ethics and lengthening the period of abstinence from any private work for former Commission members to three years. Is that enough?”

Beppe Grillo

“I have serious doubts about a potential change in the code of ethics being made by a former minister of a tax haven.”

euronews
“You don’t think the Commission is legitimate?”

Beppe Grillo
“Absolutely not. Particularly because it’s a Commission that no one has actually elected. That’s what brought us closer to Nigel Farage: a democracy coming from the people.”

euronews
“You don’t regret being allied with Farage?”

Beppe Grillo
"It was an alliance of convenience, made to give us enough support to enter parliament. We’ve always maintained this idea of total autonomy in decision-making, but we united over the common idea of a different Europe, a mosaic of autonomies and sovereignties.

“I’m not against Europe, but I am against the single currency. Conversely, I am for the idea of a common currency. The words are important: ‘common’ and ‘single’ are two different concepts.

“In any case, the UK has demonstrated something that we in Italy couldn’t even dream of: organising a clear ‘yes-no’ referendum.”

euronews
“That is ‘clear’ in terms of the result and not its consequences. In reality, the population is torn. Many people’s views have done u-turns.”

Beppe Grillo
“Whatever happens, the responsibility returns entirely to the British. They made the decision.”

euronews
“Doesn’t it bother you that Italy’s Prime Minister Matteo Renzi is playing the spoilsport in Europe? Criticising European institutions was your battle horse and now he is flexing his muscles in Brussels.”

Beppe Grillo
“Renzi has to do that. But he’s just copying me and in doing so, strengthens the original.”

euronews
“Whatever it may be, his position at the head of the government can get him results.”

Beppe Grillo
“Very well. If he wants to hold a referendum on the euro, he’ll have our support. If he wants to leave the Fiscal Stability Treaty – the so-called Fiscal Compact – which was one of our battles, we’ll be there.”

euronews
“In the quarrel over the flexibility of public accounts due to the earthquake and immigration, who are you supporting?”

Beppe Grillo
“On that, I share Renzi’s position. I have nothing against projects and ideas. I have preconceptions about him. For me, he is completely undeserving of confidence.”

euronews
“Renzi’s negotiating power will also depend on the outcome of the constitutional referendum in December. We’ll see whether he sinks or swims.”

Beppe Grillo
“It’s already lost for him.”

euronews
“If he doesn’t win, will you ask for early elections?”

Beppe Grillo
“Whatever happens, we want elections because the government as it stands is not legitimate and, as a consequence, neither are we.

“From this point onwards, the government moves forward simply by approving laws based on how urgent they are. And 90 percent of laws are approved using this method. So what good will it do to reform the Senate to make the process quicker?”

euronews
“Can you see yourself at the head of the Italian government?”

Beppe Grillo
“No, no. I was never in the race. Never.”

euronews
“So, Beppe Grillo is not even a candidate to become prime minister or to take on another official role, if one day the Five Star Movement was to win the elections?”

Beppe Grillo
“The time is fast approaching.”

euronews
“Really? A projection?”

Beppe Grillo
“People just need to go and vote. We’re sure to win.”