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Tuesday, 24 June 2014

How the EU and the Left Ruined Italy

High taxes in Italy increased prices and the cost of living


This is the second part of the article "The Looting of Italy" by Italian journalist Alessandra Nucci.

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How the Looting Works

I will venture to suggest that there must be a blue-print out there on how to manage a country after a revolutionary takeover, such as what has been done to Italy (and to Venezuela? Cuba? China? Russia?)

I would say that basically, after A) overwhelming the system (the Cloward-Piven strategy), the revolutionary leader will aim at B) impoverishing the middle class in order to prevent its every chance of rebelling. This can be done in various ways, which should include: 1) continuous price hikes in utilities, 2) a credit crunch, 3) tax-tax-tax, 4) media influence used to a) scare investors away b) deflect attention from what is really going on and c) create an iron-clad reputation for the revolutionary “good guys”, 5) sale of the nation’s property at bargain prices.

This sequence is coming full circle in Italy.

A. Overwhelming the system. In the years prior to 2011 the hard-working Italian people had been saddled with a bloated bureaucracy and progressively swelling taxes, due to the unquenchable demands imposed on our welfare system by competing leftist and populist parties, goaded on by trade unions with a finger in every pie. I think that the most telling examples of legislation foisted on the people were a law that was passed by another technocratic administration in 1992 (also unelected but at least concerted by the elected political parties) whereby immigrants over 65 were entitled to old-age pensions (whether or not they had paid into the pension funds), and a law of 2007, passed by ex-EU-Commission President Romano Prodi, whereby the old-age pensions were extended to the relatives of immigrants who joined them in Italy. In 2009 the Conservative government managed to limit this provision to relatives who could prove they had at least lived in Italy for ten years, but the burden on Italy’s budget remains enormous and climbing. It is estimated that in 2015 Italy's old-age pensioners coming from outside the EU will cost over €1.5 billion yearly.

Former EU Commissioner and Italy's Prime Minister Mario Monti


All this preceded Prime Minister Mario Monti [unelected, invited by President Giorgio Napolitano to form a new technocratic government in 2011], who was called in precisely to put a stop to it, lower the debt and put Italy back on course. But what he did was the exact opposite, in other words:

B. Adding taxes upon taxes, wiping out liquidity, scaring investors away, protecting certain privileges and playing the media with expertise. Very creative.

He then proceeded to the bargain sale of the family jewels.

It goes like this.

Italians, who are notoriously very attached to their offspring and grandchildren, were used to judiciously setting aside their savings, usually investing them in real estate. This was highly prized collateral that should have avoided all the pernicious alarmism about the national debt.

But the alarms were contrived (See this video where Monti states that crises are good events). Having set inordinately high property taxes, Monti crippled their prices, thereby reducing at the wave of the magic wand the value of Italy’s financial collateral.

Then Monti announces that Italy is all set to sell off huge amounts of prestigious state-owned real estate.

Funny, the Bank of Italy announced the very same thing more or less at the same time. Which means glutting the housing market with fine property from one moment to the next. The technocrats know that the glut will make the tax-depressed prices collapse even lower, but it will appear as if it were no one’s fault, apart from the usual culprit: the free market. This way they can sell off the family jewels at bargain prices to their foreign friends (the rest of us in Italy not having the liquidity left, as explained above).

This is a tragic déjà vu.

For the modern-day looting of Italy began back in June 1992, with the now notorious, but then super-secretive, meeting on the HMS Britannia, anchored off the shores of Latium, the region of Rome. The British royal family yacht had been lent for the occasion to a group of Anglo-American financiers. Among the guests was today’s President of the European Central Bank (ECB), Mario Draghi.

What did these invisible financiers want from Italy? Well, just as they do today, they wanted to get their hands on Italian banks and telephone and energy companies: the “family jewels”. Their main target is probably ENI [Ente Nazionale Idrocarburi, Italian large multinational] – but more about that later.

To go about this they had to speed up the changing of paradigm, making politics subordinate to the economy, and making the economy in turn to hinge on volatile finance.

In 1992, Italy’s IRI (Institute for the Reconstruction of Italy), the world’s largest state-run holding company, began to sell off its assets, at bargain prices, thereby starting the rush that has led to an avalanche of private industries to follow suit and seek a foreign buyer for their “Made in Italy” products in order to escape the combined stranglehold of bureaucracy and taxes. In the intervening 20 years, hundreds, if not thousands, of famous Italian brand names have been sold off to foreign companies.


The Attack in the Press

Reputation is everything, in a globalized market where traders encounter no restrictions to gambling with their own or other people’s money and are therefore in a position to cripple banks, currencies and entire countries. Demolishing investor confidence in a country can cost it millions, in the higher interest rates needed to attract buyers of its bonds. Disparagement by competitors is also a good way to increase investor interest in alternative bonds. In practice, as a piece in the Italian financial newspaper Il Sole 24 Ore put it, “the worse the reputations of Italy and Spain, the lower the interest rates on German bunds”.

Normally ignored in the general press, except to confirm uninformed clichés about things like the mafia and corruption, Italy started being described in the financial press as a basket case, hovering on the verge of disaster due to the size of its public debt, at the beginning of 2011. Despite its (then still) humming industries, mostly healthy banks and debt-free, educated, well-to-do population – conditions that are more than enough to guarantee secure payment of a country’s sovereign bonds - the press portrayed Italy’s condition as being desperate and placed the blame on the shoulders of the nation as a whole.

In actual fact, the situation was only desperate because of an uninformed international press pretending it is informed while choosing its sources only from among the “progressive” liberal press that mirrors their own biases. And the blame should actually be laid where it belongs, for example at the door of the decades-long unreasonable demands and manipulations of domineering communist parties and trade unions with a finger in every pie: a tale of warning that bears out the Cloward-Piven strategy of instigating the downfall of a capitalist society by overwhelming the system with massive demands. It could be a useful read for the U.S. before it finds itself winding up in the same spot.


Some Technical Notes, by Way of Explanation

Up until the single euro currency was invented, Germany was the “sick man of Europe”, mainly due to the fact that Western Germany had absorbed impoverished and backward Eastern Germany (Prussia) in one swallow, sharing with it the strong Deutschmark as its currency, with no adjustment. The Germans are still having to pay a tax for the support of ex-East Germany, but the common currency has enabled them to spread the burden onto all of the other members of the EU as well.

Since the introduction of the euro in 2001 German exports have soared, and every year there has been a surplus in Germany's accounts and a consequential mirror-image deficit in the accounts of the rest of the euro-zone countries.

There are many little details that have favored the image of Germany presented to the world as the most prosperous, honest, solid, upright and reliable country in the EU, or maybe the world. Things like the liabilities from the Kreditanstaltfurwiederaufbau which they don't include in the official accounts, so that they don’t come to bear on the total debt. Or the covert bailout they received when, as revealed by Bloomberg, Germany was allowed to spread its exposure to Greece onto all of the other EU countries. Most outrageous of all: the arms deals foisted on Greece, which in order to gain Germany’s assent to the bailouts was bullied into handing over a sizeable amount of said bailouts back to Germany itself, settling its debts for a purchase of submarines!


So Who Is Bailing Out Whom?

Bailouts are carried out in order to help a country’s creditors as much as the country itself. This is particularly obvious in the case of Greece, which Germany and France cynically compelled to use a considerable part of its bailout money (borrowed from the EU, at interest) to pay off previous purchases of German submarines and French helicopters. Percentage-wise, with respect to its exposure to Greek debt, Italy has contributed more than any other country to Greece’s bailout. But while the Greek government was forced to pay for German submarines (at least one of which doesn’t even stand up straight), as well as for French helicopters, it neatly rescinded its contract for Italian fighter planes, with no penalty attached .

Of the total €340 billion granted to Greece in official loans, only about 15 billion came directly from Germany, which corresponds to only 68.6% of Germany’s exposure in terms of the Greek bonds held by its banks. France, also imperilled by a possible Greek default, has contributed an even smaller proportion: 21% of its exposure. Conversely, Italy which, having relatively few Greek bonds, was one of the countries least at risk, has forked out 214.6% or more than double its exposure. According to some accounts, it was Berlusconi’s attempt to refuse this apportionment, balking at the Italian tradition of meekly accepting unfair conditions, that unleashed German fury against Italy, an account confirmed by ex-Spanish Premier Jose Zapatero who in his memoirs tells of the irritation against Italy's Prime Minister and the Economics Minister Giulio Tremonti at the G-20 meeting in Cannes, in September 2011, a little over a month and a half before their ouster.

Most unfair of all is the fact that, despite being lumped into the “PIIGS” [Portugal, Italy, Ireland, Greece, Spain] group, Italy, which has never received a penny of the 285 billion lent out to the other troubled countries, actually contributed a hefty 55 billion to bail-out Greece, Spain and Portugal. This is:

- money we must borrow at some 6% while getting a 3% interest in return.

- money that contributes to increasing not only the recipient countries’ debt, but also our own debt, for which we are fined by Brussels and reported on as profligate spenders!!


The Press: Conniving or Incompetent?

So which country do you think is being trumpeted by the international press as being the one and only magnanimous and put-upon benefactor of all things European? Italy, which is shouldering a share of the bailout which is wildly disproportionate to its exposure? Of course not. As always these days, when something is being meted out to enhance reputation and/or the economy, Germany is on the receiving end.

Here are some other examples of pernicious press incompetence.

On August 7th 2011 Fox News’s Shepard Smith suddenly came out with "A couple of weeks ago there was a run on the banks in Italy"... which was totally made up. Italy has had to cope with lots of problems but so far never any runs on banks! Who fed Fox News that lie?

When the “humanitarian” bombing of Libya was being carried out and the papers were dwelling on the situation in Northern Africa, The Washington Times wrote that Italy was "the former colonial power in Tunisia". Of course, Tunisia was a French colony, as were Algeria and Morocco. Of all the territories in North Africa, the only one that was a colony of Italy's was Libya, which it accrued in 1911, as the Ottoman Empire was starting to disintegrate, and held only until World War II. With all the North African autocrats suddenly being presented in their worst colors, singling out Italy, the least of the colonial powers, as the colonial power par excellence is particularly unfair.

Whether out of ignorance or interest, The Daily Telegraph wrote in a front-page headline in 2012 that “Spain and Italy are to be bailed out”, while it was Spain that was to be bailed out, with Italy shouldering 20% of the cost.

At the end of June 2012 an opening headline piece in The New York Times informed the public that our unelected, then Prime Minister Mario Monti had been doing wondrous things, and would do even better if it were not for those petulant little nuisances, the political parties, who are reluctant to let him take the tough decisions he would like.

Actually, things are the other way round! Monti enjoyed the unmitigated praise and support of an unprecedented majority of Parliament from both sides of the aisles. He was able to do whatever he pleased and they ratified, very few questions asked.

And unfortunately, what he did amounted to grinding the Italian economy to a halt, ruthlessly imposing punitive taxes on everyone and everything, giving our money away as if it were everyone else’s due, and pretending slow-motion to do something to help companies that were struggling not out of lack of business or readiness to work hard, but for want of liquidity. Not that the state coffers are empty, they’re not. Italy has the wherewithal to settle these overdue accounts, but can’t do it because of treaties such as the European Stability Pact which requires us to keep the money on hand. Businessmen have been committing suicide by the dozens, and one of the reasons was and is that they await payment for services rendered to the state, yet are required nonetheless to cough up income taxes immediately to that same inflexible state.

All this, and more, notwithstanding, The NYT certified that Monti was unquestionably competent and did more in his first six weeks in power than the entire political class had done in the preceding ten years!

In actual fact the Monti government did pitifully little, apart from eliminating some remaining early-retirement loopholes. Now Italians must stay at work (if they have it) until they are 67, while Germans retire earlier and the French only recently raised their retirement age from 60 to 62.



Read the two final parts of the article:

EU-Imposed Immigration Is Destroying Italy's Economy

Euro, Technocrats and Media Role in the Undoing of Italy





6 comments:

  1. The wicked IMPOVERISHMENT and STEALING of what belongs ONLY to Italians by Italian-hater ruling elites: "Immigrants over 65 were entitled to old-age pensions (whether or not they had paid into the pension funds). Old-age pensions were extended to the relatives of immigrants who joined them in Italy. in 2015 Italy's old-age pensioners coming from outside the EU will cost over €1.5 billion yearly.

    FINANCIAL STEALING of Italy's companies: "Italy’s IRI (Institute for the Reconstruction of Italy), the world’s largest state-run holding company, began to sell off its assets, at bargain prices. Hundreds, if not thousands, of famous Italian brand names have been sold off to foreign companies."

    I'm deeply shocked by the tremendous hate, lies and deception targeting Italy and Italians by other EU countries including the media and the despicable New York Times and Washington Times. It is a hate so twisted, so cruel and so evil it can only be described as demonic.

    What is it about Italy and Italians that is causing evil EU ruling elites to viciously attack Italy with such venom and hate?

    ReplyDelete
  2. "The “humanitarian” bombing of Libya". Western leaders call the US/NATO bombing of peaceful, defenseless people as humanitarian. Western leader barbarians who savagely attack innocents and call it 'humanitarian' are so evil they are capable of carrying out a genocide of millions, even the genocide of hundreds of millions of the world's innocents.

    http://www.wnd.com AUGUST 06, 2011
    Two U.S. sources currently in Tripoli told G2Bulletin that Deputy Foreign Minister Khaled Kaim, who is part of the embattled Gadhafi regime, told them that the Warfalla tribe – one of the largest in Libya – is being joined by other tribes to fight the rebels because of what is described as indiscriminate killing of civilians by Western alliance-backed troops.

    The sources said that Qatari troops, tanks and helicopters “are openly killing these unarmed tribal members. They have their Qatari tanks in the streets of Benghazi. They are actively shooting on unarmed civilians.”

    Repeated NATO bombings also have included hospitals, Ramadan food storage warehouses, the country’s main water distribution infrastructure, private homes and “more than 1,600 other civilian sites.”
    http://www.wnd.com/index.php?fa=PAGE.printable&pageId=330341

    ReplyDelete
  3. US/NATO waged a ruthless war in the stable country of Libya fighting on the side of Al Qaeda and other muslim terrorists against Gaddafi and the Libyan people. Gaddafi had made peace with the West and had his photo taken many times with Western leaders. Gaddafi was fighting AGAINST Al Qaeda! This was unacceptable to US/NATO. Gaddafi was highly popular with Libyans.

    The muslim terrorists that US/NATO supported committed genocide of blacks in Libya and perpetrated satanic atrocities against blacks. Black media in America reported on the genocide.
    Many of the black children who were captured by muslims were never seen ever again. It is believed the terrified children were sent to other countries as slaves. Blacks were safe under Gaddafi!

    As a human rights activist I attended a street demo in Harlem, New York City to protest the genocide. I held two signs protesting the genocide and protesting Islam taking Christians for slaves. The Nation of Islam (a different sect from regular muslims - made up of African-Americans) were there in suits. One of the Nation of Islam speakers blamed the White House for genocide of blacks, but color of skin trumps all and added that Obama was a "brother".

    http://www.wnd.com: AUGUST 06, 2011
    Two U.S. sources currently in Tripoli told G2Bulletin that Deputy Foreign Minister Khaled Kaim, who is part of the embattled Gadhafi regime, told them that the Warfalla tribe – one of the largest in Libya – is being joined by other tribes to fight the rebels because of what is described as indiscriminate killing of civilians by Western alliance-backed troops.

    The sources said that Qatari troops, tanks and helicopters “are openly killing these unarmed tribal members. They have their Qatari tanks in the streets of Benghazi. They are actively shooting on unarmed civilians.”

    Repeated NATO bombings also have included hospitals, Ramadan food storage warehouses, the country’s main water distribution infrastructure, private homes and “more than 1,600 other civilian sites.”
    http://www.wnd.com/index.php?fa=PAGE.printable&pageId=330341

    On the Day of Judgment, God, the Just Judge, will severely punish all who perpetrated atrocities and barbaric murders of innocents.

    ReplyDelete
  4. it is a fix organised by Germany who never have the probs of other nations, Merkel is a mere conwoman

    ReplyDelete
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