tag:blogger.com,1999:blog-36227136.post3114926215480190100..comments2024-01-16T08:40:53.682+00:00Comments on <a href="http://www.openeurope.org.uk">Open Europe</a>: Italy: Will Bersani have any luck in forming the new government?OEhttp://www.blogger.com/profile/00556463374230498875noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-36227136.post-10419362857656607372013-03-23T04:10:23.141+00:002013-03-23T04:10:23.141+00:00The issue in Italy is not so much if they can get ...The issue in Italy is not so much if they can get a government together but if they can finally start with the structural reforms urgently needed (do the full Monti).<br />With policies as is like now and in the 'best case' scenario if a government can be formed nothing will change.<br />Hard to see if either a minority Socialists or a Grand Coalition (including a new Monti) can do that job, you never get it through parliament.<br />The real Monti could hardly do anything constructive the second half of his 'reign'. Simply as there was no support. He took the gamble and the challenge of the election, probably the 'nice' thing to do and worth the try. But all it did was made more clear that Italy isnot ready for structural reforms.<br /><br />Also when Grillo comes to power that won't change his economic policies make Hollande look like economic Nobelprize material. It is not going to work only increase deficits and markets will dump it within a few weeks at best.<br />Unless of course he goes for radical change which will likley end Cypriotic (one big mess).<br /><br />Anyway Italy is running out of time Like the other PIIGS (excl Ireland). Bail out fatigue is hitting in. Looking at German elections and things like the SNS take over. It is completely unrealistic to assume PIIGS and PIIGSbanks will get a better deal than Dutch banks and its bondholders. Or German taxpayer with half the nett worth will bail out Italian ones (with double the nett worth). Why do you think these reports keep appearing, it is nearly as good as Russian oligarchs.<br /> <br />Difficult to see how only the ECB can hold this fort. There will not be massive shorting as it looks now. But the effect will simply be spread over a longer time ending up in the same situation. And as it looks all the time bought is there to be waisted the end result will be the same. Probably worse as precious time is waisted and debt levels further pumped up. Risk is moved from smart money to local bust banks that are doubling down or local pensionfunds. Nobody (hardly anybody) with a brain is in PIIGS except for trading (no way for longer term investments), they move out en messe with the first real trouble. Riknoreply@blogger.com