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Wednesday, August 15, 2012

Lega Nord steps anti-Euro rhetoric up by another notch

Italian Lega Nord party's opposition to the euro is clearly not limited to two nostalgic MPs organising a rally where the Italian lira is used as the official currency. Call it political opportunity, but since Lega Nord is no longer in government, it has stepped up its anti-euro rhetoric by several notches.

Roberto Maroni (see picture) - the party's recently appointed Secretary General and a former Italian Interior Minister - made some very interesting remarks in an interview with La Repubblica (available here).

He said,
“At the end of August, we will submit to the Court of Cassation [Italy’s supreme court] a citizens’ initiative for a legislative proposal to hold a consultative [i.e. not legally binding] referendum on the same day as the 2013 elections, in which Italian citizens can have their say on the euro. I want to collect millions of signatures, and I can guarantee that our initiative is not an isolated one in Europe.” 
“Listening to the people is no blasphemy. In any case, it would be a consultative referendum. My objective would be for such a referendum to be held in all [eurozone] member states before the 2014 European elections. This is why I am going to meet the euro-critics in other EU member states.” 
So what would happen if the ‘no’ camp were to win (which, according to recent opinion polls, looks unlikely at the moment)? This is Maroni’s thought-provoking idea,
“New scenarios would open up. What I would like to see is a new eurozone with Northern Italy in the euro. But in order to get there, a referendum is needed first. The most important thing is that democracy should decide, not bureaucracy.” 
However, Maroni’s position sounds rather confused. On the one hand, keeping only Northern Italy in a ‘new eurozone’ would entail splitting the country first (which, by the way, remains the primary aim of some Lega Nord members). On the other hand, Maroni also seems to suggest that Italy would not face mayhem outside the single currency. He argues,
“Great Britain taught us a great lesson with the Olympics. Someone must explain to me why that country is so strong outside the euro, whereas Italy outside the single currency would be a catastrophe…Anyway, our vision is not anti-European, but neo-European. And we are the only ones who have it.” 
On a more general note about the future of European integration, Maroni said,
“The analysis [Lega Nord] made more than ten years ago turned out to be correct. Europe has failed. We are not going towards the United States of Europe envisaged by Carlo Cattaneo and Altiero Spinelli, but rather towards a single state which has all the characteristics of Hobbes’ Leviathan.” 
“I agree with what the Bavarian Minister-President [Horst Seehofer, who also featured on our blog recently] has said. People don’t want a European super-state…One thing is certain: the political union supported by the élites has turned out to be a fantasy of poets [this expression should sound familiar to the readers of our daily press summary, see here], and a denial of democracy. This [happens] because the bureaucracies rule.”
Pretty strong words to say on the Ferragosto bank holiday, with many Italians (including Mario Monti) enjoying their summer break. It is too early to say how far Lega Nord can get with this initiative. According to the Italian constitution, 50,000 signatures are required to submit a citizens' initiative - a number Lega Nord should be able to collect easily. However, the draft bill then needs to get parliamentary approval to become law - which looks much more difficult to achieve.

Nonetheless, the initiative in itself is politically quite significant. Furthermore, it will be very interesting to see how many Italians will sign up to it - we can see the number going well beyond the legally required threshold of 50,000.


Rik said...

Splitting Italy (and Spain as well up) is imho a very good damage limitation excercise.

Not 2 big countries would have to leave the EZ, but 2 smaller/midsize ones (especially economically seen), next to Portugal and Greece and likely Cyprus and Slovenia.

Much less write off because of devaluated new currencies required. Much less contagion possibilities.

The North of Italy looks competitive enough the problem is its South. That never could stand on its own feet and may be not even tried because the money came from the North anyway.
Same in Spain, but a bit more difficult to split. But could be along region lines some in some out.

You create with each region or part of the country more budgetdiscipline (especially with the Sicilies and Andalusias, that could use a bit of those). And with that a labournmarket that is more flexible. People from say Andalusia will have to look for work (possibly in the North because of the language)as welfare will be poor as staterevenue there is low. Part of the concept of an optimal monetary union.

Likely Italy North could come up with a working businessplan (as could Catalunia for instance in Spain), that is acceptable to markets and these parts could return like Ireland to the markets.

Furthermore as is clearly shown here, the paying part likes it. They would rather join Austria or Switzerland or Germany than remain 'united' Italians.

Rik said...

Austerity fatique is an issue almost completely neglected in this crisis.
What eg IMF and Worldbank research shows is that roughly 2 years after austerity hits in this usually starts to play.

This is a major reason as well why the 'solutions' presented up to this date simply will not work.
Nearly all PIIGS plus Slovenia and Cyprus most likely need much longer to get their business together.

Another 'problem' is that 'normal austerity' is also already playing all over Europe. Heavy but necessary structural measures come on top of that (that: being the crisis seen as a normal dip in the businescycle and preparing the country already too late for especially aging and rising healthcare costs).
The crisis with cuts is already running for 4 years now. A lot of cuts have been implemented 2 years ago and likely were felt 1 year ago, plus the whole psychological climate that comes with it. Means that this 2 year period is most likely shorter than longer.

Also seen the fact that on a worldscale Europeans are simply a spoilt bunch. A lot of people know exactly what their rights are but the contribution to pay for it all is easily forgotton. The idea that first a step back has to be made to be able to move forward again is carried by a lot of the population.

Also the general dissatisfaction with traditional politics is an issue. This started already long before this crisis and effectively this is the bed in which the crisis from a political pov landed.
This is important imho because the leadership is simply not seen as leaders in this crisis, but more like chickens with their heads cut of who are living in their Euro-fairytale and donot have a clue what the solutions might be. At least by large parts of the population.
Plus there have been developing a lot of alternatives. Which are now simply established political parties and are seen as alternatives by a big part of the populations. So there is something else to vote for.
Not even mentioning the fact that these new parties simply force the traditional ones to take over their policies (often however in mitigated form).

We are talking democracies where every few years minimum people go to vote.

Anyway 10s% corrections have to be made and as we see now we go in say 2% annual steps. Basically indicating that the bottom (or fresh starting point) will first be reached in a decade minimum.

Rik said...

Seen all this it highly unlikely that there won't be a change in leadership in nearly all countries.
The max shelflife of even successful politicians like Blair is nowhere longer than the 10 years required at least to solve the crisis. And most European 'leaders' are hardly of the caliber of Blair (as a person that attracks voters).

Lega Nord is simply one of those parties.

The situation on the continent is also different from that in the UK. Mainly because of the British system, which effectively allows only 2 parties. And it is extremely difficult for a newcomer to become a new member of that group of 2. Best is to look at countries with a system that allows a lot of parties, say Holland (Belgium has a lot of parties as well but the language issue has a huge influence on that as well). Basically Holland shows that there is 40% dissatisfied electorate. Austria even more. The rest being in between these 2 extremes (Austria and Holland on one side the UK on the other).
And in this respect we are not even counting the traditional parties that have taken over certain views. Or already have traditionally an anti-austerity basis (like many left wing parties).

So in a nutshell a lot of basis and time for the austerity-fatique to start playing and with so many countries involved it almost certainly will. And subsequently will be leading to a few EZ exits.
Not even to mention the austerity fatique in the North. Seen your real income not rising or even falling to pay for troubles in the South (next to the increesed costs of healthcare and the aging effect plus low yields requiring higher pensionpremiums).

Imho likely it will hit in in the South when several of them have a primary surplus. Likely you need somthing like that to be able to go out. And even a few procent (to compensate a devaluation effect on your budget (stuff get more expensive to buy) and you need a buffer for the unexpected. Furthermore interest is income for your population at least partly this will fall away leading to less consumption and less tax revenue.

Bob Lagaaij said...

He's not quite an idiot, but please, don't forget: Italy is the cradle of the opera.