Italy's Technocratic Government Coming To An End: Goldman's Mark-To-Mario Gambit

Tyler Durden's picture

In what is the day's most overhyped piece of non-news, we go to Italy to learn what many already knew on Thursday, namely that with the loss of support of Berlusconi's PDL party, Mario Monti's technocratic government, which correctly "feels" it lost its parliamentary support, is coming to an end and after a two hour meeting between the former Goldman advisor and Italian president Napolitano, Monti announced he "intends to resign after checking to see if parliament can pass next year's budget law, President Giorgio Napolitano's office said on Saturday... If the budget law can be passed "quickly", Monti said he would immediately confirm his resignation. Monti's announcement came after a two-hour meeting with Napolitano, who has the power to dissolve parliament." The reason this is non-news is that Monti government's tenure is ending in a few months anyway, and general elections are coming in Q1 regardless. In other words, it may take weeks or months for the budget law to pass, or not, at which point it will be time for new elections anyway.

Continuing with the non-news, is Berlusconi's latest attempt to remain relevant, by announcing, again, that he intends to run for Prime Minister.

Silvio Berlusconi said on Saturday he will stand to lead Italy for a fifth time, challenging the leftist frontrunner a year after being forced to resign amid a sex scandal and a debt crisis.


The 76-year-old media tycoon, facing possible jail time for tax fraud and a trial for having sex with an underage prostitute, had hinted for months he might make a comeback in an election in about three months' time. He accuses technocrat Prime Minister Mario Monti of bringing the third-biggest euro zone economy to "the edge of an abyss" with austerity policies.


"I race to win," Berlusconi told reporters at the practice field for AC Milan, the soccer club he controls, after repeating criticism of Monti's handling of the economy over the past year.


"To win, everyone said there had to be a tested leader. It's not that we did not look for one. We did, and how! But there isn't one... I'm doing it out of a sense of responsibility."

Considering this news was first floated in July, it is surprising the media is making such a big deal out of this development. The development is made particularly irrelevant considering that the popularity of Berlusconi's PDL is so low he has no chance of winning the election.

Italy's center-left Democratic Party has slightly increased its opinion poll lead, according to a survey conducted just before a political crisis threatened to end Prime Minister Mario Monti's term early.


Elections are expected to be held early next year,


The poll by the SWG institute for RAI television showed the Democratic Party (PD) on 30.3 percent, up from 30 percent a week earlier, ahead of the anti-establishment 5-Star Movement of comic Beppe Grillo on 19.7 percent.


Silvio Berlusconi's center-right PDL party, which triggered instability on Thursday by withholding its support for Monti's technocrat government in two parliamentary confidence votes, saw a slight drop to 13.8 percent from 14.3 percent a week earlier.

In other words, any political relevant Berlusconi may have will be not as a PM, but as a balancing force in a new coalition government. He only open question is how much of a political variable Bunga's return to politics will mean to capital markets and to Italian bond prices which have recovered substantially since hitting near record lows in the days before the ECB did everything in its power to force Berlusconi out in November 2011.

His move may unsettle financial markets, whose loss of faith in Berlusconi's guidance of the economy pushed the country to the edge of a Greek-style debt crisis last year and prompted President Giorgio Napolitano to ask the former European commissioner Monti to step in to restore confidence.


With the support of a right-left coalition including the PDL, Monti imposed austerity measures to bring borrowing costs under control, but Berlusconi said on Wednesday that the economic professor's policies had left Italy facing a "recessive spiral without end".


The PDL withdrew parliamentary support for Monti on Thursday, raising the specter of a snap election and driving up the difference between German and Italian benchmark bonds by about 30 basis points.

One thing appears sure: the eye of the Hurricane, in which various European technocratic governments got a blank check from the population to run programs which continue to be incorrectly classified as "austerity", is shifting as these same populations demand a return to the old status quo, in which Europe reveled for decades before the arrival of Goldman Sachs as global hegemon.

Which however does beg the question: is Goldman so confident in its foothold of European the monetary mechanism with the "surprising" arrival of Goldmanite Mark Carney to head the Bank of England, in effect handing all of Europe over to statist monetary interests, that the vampire squid is willing to hand over the illusion that political muppets are relevant, back to the people.

Said otherwise: was 2012 the year in which Goldman remarked Europe on a Mark-To-Mario basis?

It remains yet to be seen if this will be a very short-sighted move, now that attention will shift back once more to Italy.

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Mr Lennon Hendrix's picture

Monti needed to learn how to Bunga Bunga.

Yen Cross's picture

Mario Monti has over stayed his (technocratic internship) of Italy...

debtor of last resort's picture

Well, Hollande in France, Berlusconi in Italy, Morsi on a plane to his virgins. Like i said, carrier decks are useful to grow beans.

DCon's picture

The Squid control the man who controls the printing Press.


Why would they care about an insignificant country?


They might have actually told Monti to walk .


Rari Nantes In Gurgite Vasto's picture

Insignificant country? Perhaps if your concept of World goes from Magic Mountains to Disneyland. 

However not so insignificant for any financial institution,  if only because of the size of its public debt, whether or not such institution where to held any of its debt on their books.

A default of Italy can not be easily absorbed or sterilized

Better take note of a long list of insignificant countries, with large public debt not entirely held domestically a la' Japan.... 

Motorhead's picture

Putin needs his Italian buddy back in power.

BTW, Monti wasn't elected by the Italian peeps, was he?  (Not that an election matters anymore.)

dannyboy's picture

He was appointed by the man that does god's work. That's democratic enough right? God couldn't be wrong.

lizzy36's picture

Rainbows on unicorns, and money on trees....

These are a few of eurocrats favorite things....

Bunga on bunga and buggering on underage girls.....

These are a few of EU politicians favorite things....

Now if only DSK can make a comeback ;)

Dareconomics's picture

Wouldn't you like to hang out with DSK and Bunga for a night?

Dareconomics's picture

Bunga is Back! He has very little chance of becoming PM again, but he is smart enough to understand that the PIIGS hold all the cards. He would threaten to default in exchange for concessions rather than submitting to the troika.

bank guy in Brussels's picture

Not clear to me that Berlusconi won't be back in power, despite the poll figures given above

Italian electorate is volatile ... if Berlusconi runs a campaign on giving Italians their sovereign rights back, leaving the euro, and becoming an economic success like Iceland, he could rocket upwards ... and Berlusconi could do a deal with Beppe Grillo's party

Italy would be as strong in exports in Germany with their own currency, the only thing holding them back is the euro ... Italy has the strongest case for success on leaving the euro, and Berlusconi may be sharp enough to get that message through to Italians

Berlusconi could be the black swan of 2013 ... getting into power, taking Italy out of the euro, breaking up the euro-zone ... euro-zone bond market freezes and bank holiday, big reset ...

Berlusconi has already described the euro as a 'scam' in terms of the euro policy toward the Mediterranean countries ... Should Berlusconi take Italy out of the euro and end this 'austerity' debt-slavery agony of many tens of millions of people ... he yet may go into the books as a personally flawed (bunga bunga) but great bold politician of early 21st century Europe

Banksters's picture

It seems that somehow, someway, whether it has to do with annulling referendums,  installing 'technocratic' governments, or abolishing freedom of information, the mother fucking banksters always get their way.   Waiting...

tooriskytoinvest's picture

Europe Is Officially Doomed: The Entire Economy Is Imploding, Severe Austerity Measures Are Spreading Rapidly, The Growth Rebound Failed To Materialise, Wages Continue To Plummet, And Poverty And Homelessness Rates Are Surging. Time To Write Off Europe for the Next Decade?

HoaX's picture

You rather have us behave like the Fed and BoE and just press the CTRL-P button ad infinitum instead huh?

I will take Merkels austerity any day above those "proven" politics.

tsuki's picture

No, I'd rather you acted like Iceland.

HoaX's picture

Haha, true I guess. That would be kinda classic.

And I agree that this austerity right now is basically ripping off the plebs to support the corporate welfare for the banksters. Just pressing CTRL-P is hardly a proper solution though.

At least the European people are hitting the streets and let their voices be heard. It will be pretty hard to surpress 500 million people.

In the USA pretty much nothing is happening at the moment, Occupy Wall Street has been disbanded and arrested by your Fed private police force (pretty sick they have one by the way), London had its "riots" and slapped 17yo kids with 7 month jail sentences for nicking a bottle of soda. While the ones truly stealing on a massive scale got to be named Lords. Maybe it has to do with the fact the City of London has it´s own police force as well (creatively named City of London Police) to tackle "financial crimes".

Yen Cross's picture

That huge drop in equity markets, last November/ Ugly January.

Wile-E-Coyote's picture

The bastard knows the collapse is coming, running of to Bransons Island.

HoaX's picture

England is more and more irrelevant when it comes to Europe or the EU. We on the continent are just waiting for them to get their referendum and bugger off. In that respect, let alone the fact the UK doesn´t even use the Euro but the pound, the appointment of any BoE president is completely insignificant.

Britain might make a lot of fuss about leaving the EU, but more and more the EU is just leaving England.

HoaX's picture

Double post deleted.

hugovanderbubble's picture

Sell off ITalian Equities and Bonds....


SPITALY Back to 13000


and Italian bonds to 10%

Mario55's picture

Do not discard Berlusconi too quickly. Sure Monti has helped lower the 10 year BTP yield, but using the easy way that is to say: sharp increase of taxes (up to the subtle level which is seen as sustainable by the market vene though it is not), austerity bla bla leading people to pay either with money (taxes) or with the loss of their job.

Growth with his Nº2, Mr Passera in charge, is nowhere to be seen. 

If Monti leaves now he will prove a good surfer and before the economic situation sours, may make homself ready to become the President of Italy next year, a much less stressing, however prestigious, job than the executive role of Prime Minister! 

q99x2's picture

I'm badly in need of a bunga bunga party.