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Tuesday, August 14, 2012

The Lira is back (for a weekend)

Lega Nord has decided to treat its supporters to a bit of 'throw back' party, remembering the days when Italy used the lira as its currency. The party has organised a rally in Avio (north-eastern Italy, where else?) for this weekend, at which the lira will be used as the only official currency. Interestingly, the two Lega Nord MPs who promoted the rally - Maurizio Fugatti and Sergio Divina - have decided to officially invite Italian Prime Minister Mario Monti.

The two said in a joint statement,
“This will be the opportunity to show to the technocrats and the enlightened bureaucrats who built this Europe, including Prime Minister Mario Monti, the damages caused by the euro, which they decided to introduce sitting around a table without the people’s approval – the consequences of which the citizens are now paying every day in terms of cost of living. The need for a popular referendum is now evident, so that those who work and pay taxes can express their opinion on Europe and the euro.” 
It is the second time in only a couple of days that Italian politicians use the words 'euro' and 'referendum' in the same sentence. From the opposite side of the political spectrum, Italian comedian Beppe Grillo - whose Five Star Movement has been consistently polling at over 20% during the past few months - wrote on his blog recently,
“A referendum on the euro and the restructuring of [Italy’s public] debt is ever more necessary. See you in parliament...It will be a pleasure.” 
Neither of these parties is likely to be in government after next year's elections, and recent opinion polls suggest that a referendum on the euro would see a quite clear victory for the 'stay inside' camp. However, as we noted several times before (see here, here and here), such a change in rhetoric and the fact that cross-party support for the single currency can no longer be taken for granted in Italy is in itself very significant.


jirovec said...

Vivat Italia!

Rollo said...

Good show, Lega Norte. Good show, Beppe Grillo. It would be comic if it wasn't so funny.

Rik said...

1. One of the 2 big trends in European politics.

2. Since a decade or 2 politics has lost its relation with the voter (clients in marketing terms). People were merely voting the 'old' parties as there were no real alternatives.
Now alternatives are there old fashioned politics simply will see its 'clientbase' dry up for a big part. This is extremely worrying as the present alternatives, even in countries where these are established longer, simply have a rather weird mixture of unrealistic goals and have nearly no managementcapacity. I agree that the managentcapacity within the present traditional parties is also pretty poor, but I am afraid the new parties will bring it in another league (probably standards 2 leagues below the present imho).
Anyway if a company isnot able to adjust for 2 decades (as the traditional political parties with a few exceptions, like Blair (not in any way fond of his policies, but at least he had an idea who were his potential voter-base).
Also makes very clear what the general voter effectively thinks of traditional political parties if he/she goes for such an alternative: 'simply complete and utter rubbish'.

3. Another one is more nationalistic (aka selfish). The UK is a clear example for that.
Part of this is the fight for national financial selfinterest.
Like we see clearly in the EZ. The South wants the North to pay for its unsustainable lifestyle. The North donot want to pay. Outcome would be absolutely clear were it not for the Euro-sauce over it. Anyway even if a huge increase in North-South solidarity would come out of this (very unlikely), it will hardly be a stable situation. Simply bound to fall apart by the next occasion.

4. What we also are likely to see as the man in the street has effectively no clue, but the fast majority of votes is that a lot of countries will have 'French' (as in socialist and not working on the present situation) solutions for the financial problems at least to start with.
Read more tax especially for business and the so called rich (definition: everybody who is financially better off than yourself). As we however see in the UK that doesnot really work.

Next step likely being pushing the taxes down to the middleclasses. Since decades the only part of European society were it is possible to generate much tax revenue anyway. So basically we see that these parts first have to go to the streets until a solution for the present crisis will be on the table.

5. Another point. It becomes pretty clear that the basis of the traditional left wing parties were simply merely there for rather selfish financial reasons. If they have to kick all other forms of solidarity out of the window, except the ones they themselves benefit from, they are considerably more likely to do that than not. A reason to back that up is always easily found. Lazy... (immigrants, East Europeans, 3rd world, garlic eating soapophobics (French and worse etc. (soap as in washinggear not as half the stuff on TV).

6.But nevertheless this is the main basis for these trends. Most voters see their economic position under pressure and try to assure it. Not by working harder, but by putting the tab with somebody else. Likely leading to a smaller cake, but what the ...., as long as you get a bigger piece it is ok. Who do they think they are: bankers?

7. Also rather short term thinking in the 'recieving' and 'potential receiving' (like France) countries. If there is not enough solidarity in your own country, and not enough solidarity in the North to keep paying for all its own present stuff, how can any sane human being think that the Northern taxpayer will start paying and certainly keep paying for people who they think are dodgy and lazy Southeners. Completely wishful thinking.
Anyway imho as we see now however likely the first half of this game.
It will take a few years till the mainstream realises that harder working on things that actually make money might not be a bad idea.

Idris Francis said...

Public opinion in Italy will change markedly when the first country leaves the euro and enters recovery mode.

Bugsy said...

Rome, fiddle, burn.

Rik said...

Am not too sure about that. Will highly depend on which country leaves first.

Greece is the most likely candidate. Difficult to see them recovering because of leaving the Euro, certainly not quickly. The country is one big mess nobody will invest there if say Turkey and Bulgaria and Rumenia and Slovakia are alternatives.

Portugal similar problem. Too big gap and 'cut off' from the economic big world by Spain with all its own problems.

Spain no grip on the situation is another big problem.

Remains Italy and Ireland. Ireland unlikely to move. So Italy itself (also because its relatively low deficit).

But also there, like in the whole South, they have been sleeping while India, China and Co have been working and catching up. No way you can compete with those countries on wages that are 3,4,5 times higher. And educationlevels simply are not high enough to play in the big leagues.

Idris Francis said...

I agree that Greece is in a real economic mess, perhaps I should have written that in their case at least, when they leave, the position will at least improve, not that they would recover.

As Denis Heaaley's First Law of Holes states, "when you find yourself in a hole, stop digging". All the time Greece delays leaving they are digging a deeper hole from which to recover.

Rik said...

Indeed, the 'first law of holes' is clearly unknown in the South of Europe.

And not only with respect to the Euro. Countries that compete with the PIIGS keep pushing forward while the PIIGS are effectively moving back. Plus they get the reputation with international investors (financial and in real stuff) that they are a bananarepublic with very high wages and no growth.

And not only Greece the rest of the South might go through the same process before they see the light (possibly the morning sun in New Zealand if they keep digging in this pace and with this much success).