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Draghi's Termination Of Berlusconi Explained: Sylvio Threatened To Leave Euro

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Ex-ECB insider Lorenzo Bini-Smaghi has once again proved that conspiracy 'theory' in the new normal is the same a conspiracy 'fact'. As The Telegraph's Ambrose Evans-Pritchard notes, Bini-Smaghi's new book details Silvio Berlusconi seriously floated plans to pull Italy out of the euro in October/November 2011, precipitating his immediate removal from office and decapitation by EMU policy gendarmes. Specifically, he discussed (threatened?) Italian withdrawal from the euro in private meetings with other EMU governments, presumably with Chancellor Angela Merkel and France's Nicolas Sarkozy. Bini-0Smaghi's tell-all goes further, noting that Merkel continued to think that Greece could be thrown out of the euro safely as late as the early autumn of 2012. It appears - just as we have always believed - that all is not well under the surface in Europe and that Dragji is in charge.

 

It seems the market was starting to discount Berlusconi's views...

 

Via The Telegraph,

So, we now know: Silvio Berlusconi seriously floated plans to pull Italy out of the euro in October/November 2011, precipitating his immediate removal from office and decapitation by EMU policy gendarmes.

 

Ex-ECB insider Lorenzo Bini-Smaghi has quietly dropped a few bombshells in his new book Morire di Austerita (Dying of Austerity), worth a read if you know Italian.

 

Mr Bini-Smaghi – until recently on the ECB's six-man executive council, and for many years Italy's man in Frankfurt – states that Silvio Berlusconi was toppled as Italian premier in November 2011 as soon as he began to rattle the EMU cage in earnest.

 

Specifically, he discussed (threatened?) Italian withdrawal from the euro in private meetings with other EMU governments, presumably with Chancellor Angela Merkel and France's Nicolas Sarkozy, since he does not negotiate with underlings. ("L'ipotesi d'uscita dall euro era stata ventilata in colloqui privati con i governi degli altri paesi dell'euro").

 

We have long suspected this. Now it is confirmed.

 

Mr Bini-Smaghi also reveals that Merkel continued to think that Greece could be thrown out of the euro safely as late as the early autumn of 2012, when the Pfennig finally dropped that all hell would break lose, with chain reactions engulfing the whole system. She then switched tack abruptly, rushing to Athens to praise the new government for its heroic efforts. "Merkel l'ha capito sole nell' Autunno del 2012".

 

He confirms that Germany is indeed on the hook for €574bn of credits from the Bundesbank to the central banks of Greece, Portugal, Ireland, Italy, Cyprus, and Slovenia.

 

We have always been assured that the so-called Target2 credits within the ECB's internal payments system is a technical adjustment, without significant risk.

 

Mr Bini-Smaghi states that any EMU state leaving the euro would face likely default on external obligations. "The national central bank would not be able to repay liabilities accumulated in relation to other members of the euro system, which are registered in the internal payments system of the Union (known as Target2). The insolvency would provoke substantial losses for counter-parties in other eurozone countries, including central banks and states."

 

German voters may wish to know this before the elections on Sunday week, since they are told otherwise by their own leaders.

 

Read more here...

 


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