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Near-Bankrupt Rome Bailed Out As Italy Unemployment Rises To All Time High, Grows By Most On Record In 2013

Tyler Durden's picture




 

A few days ago, we reported that, seemingly out of the blue, the city of Rome was on the verge of a "Detroit-style bankruptcy." In the article, Guido Guidesi, a parliamentarian from the Northern League, was quoted as saying "It's time to stop the accounting tricks and declare Rome's default." Of course, that would be unthinkable: we said that if "if one stops the accounting tricks, not only Rome, but all of Europe, as well as the US and China would all be swept under a global bankruptcy tsunami. So it is safe to assume that the tricks will continue. Especially when one considers that as Mirko Coratti, head of Rome's city council said on Wednesday, "A default of Italy's capital city would trigger a chain reaction that could sweep across the national economy." Well we can't have that, especially not with everyone in Europe living with their head stuck in the sand of universal denial, assisted by the soothing lies of Mario Draghi and all the other European spin masters." And just as expected, yesterday Rome was bailed out.

As Reuters reported, Matteo Renzi's new Italian government on Friday approved an emergency decree to bail out Rome city council whose mayor had warned the capital would have to halt essential services unless it got financial help.

The decree transfers 570 million euros ($787 million) to the city to pay the salaries of municipal workers and ensure services such as public transport and garbage collection. Renzi, under pressure from critics who say Rome is getting favorable treatment, attached conditions to the bailout.

 

Rome must spell out how it will rein in its debt, justify its current levels of staff, seek more efficient ways of running its public services and sell off some of its real estate, the government decree said. Rome's finances have been in a parlous state for years and it has debts of almost 14 billion euros which it plans to pay off gradually by 2048.

...

 

The city has around 25,000 employees of its own with another 30,000 or so working for some 20 municipal companies providing services running from electricity to garbage collection. ATAC, which runs the city's loss-making buses and metros, employs more than 12,000 staff, almost as many as national airline Alitalia. Rome's administrators say it needs help with extra costs associated with housing the central government, such as ensuring public order for political demonstrations, and to provide services for millions of tourists.

Here is the punchline, about Rome's viability, not to mention Italy's and Europe's solvency:

The city of some 2.6 million people has been bailed out by the central government each year since 2008.

What is certain is that this year will not be the last one Rome is bailed out either. In fact, it will continue getting rescued for years to come because contrary to the propaganda, the Italian economy continues to get worse with every passing month, yields on Italian bonds notwithstanding.

Ansa reports that in January the Italian unemployment rate rose to a record 12.9%, and that "reducing Italy's "shocking" rate of unemployment must be the government's highest priority, Premier Matteo Renzi said Friday." How, by pretending everything is ok, kicking the Roman can and hoping things improve by bailing out anyone that is insolvent?

Youth unemployment is particularly vicious, with an average rate of 42.4% in January for people aged 15-24, the highest since 1977, Istat reported on Friday. Reflecting the hard times, Istat also reported that the number of people in Italy who have given up the search for work is still growing. The so-called "discouraged", who have surrendered to the idea that there is no hope of finding employment, reached an average of 1.79 million people in 2013, growing by 11.6% over the previous year.

Putting 2013 in perspective, this is the year when according to national statistical agency Istat, some 478,000 jobs were lost in Italy in 2013, the worst year since the global financial crisis of 2008-2009, with an average annual jobless rate of 12.2% last year. The new year got off to an even more dismal start, with the January jobless rate up 0.2 percentage points over December, Istat said.

Between 2008 and 2013, a total of 984,000 jobs in Italy were lost to the economic crisis - something that is "shocking," Renzi posted on his Twitter account during a meeting of his cabinet.

 

"Unemployment is at 12.9%. Shocking numbers, the highest for 35 years," tweeted Renzi, who has previously described Italy's unemployment rates as "merciless and devastating".

And then comes the hope and prayer of change:

"That's why the first measure will be the Jobs Act," which Renzi, who formed his executive only one week ago, proposed last month before the leader of the Democratic Party (PD) became premier. Earlier this week, Renzi said he would have his labour reforms and job-boosting measures, based on the Jobs Act, ready before a bilateral summit with German Chancellor Angela Merkel next month.

 

Fast action is needed promote business investment, improve labour market efficiency while cutting relevant taxes, Labour Minister Giuliano Poletti said after Friday's cabinet meeting.

 

One of the main aims of Renzi's Jobs Act would be to simplify Italy's labour system, eliminating many parts of the current myriad of work contracts and lay-off benefits. A key proposal of the package Renzi announced last month, before unseating his PD colleague Enrico Letta as premier and taking the helm of government, is to have a single employment contract with job protection measures growing with seniority.

 

At present, older workers with regular contracts tend to enjoy extremely high levels of job protection, while young people are often forced to accept temporary contracts or other forms of freelance employment that guarantee them few rights and little job security. The current system has been blamed for making firms reluctant to hire, as it is so hard to dismiss workers once they are on the books, and contributing to the high levels of joblessness, especially among the young. Making the task for Renzi's government more difficult are grim economic forecasts.

 

Earlier this week, the European Commission forecast growth in the Italian economy will be weaker this year than previously forecast and the country's debt as a percentage of gross domestic product will rise in 2014. The EC revised down Italy's 2014 growth forecast to 0.60% but said 2015 looks brighter, as stronger consumer confidence and external demand boost the economy. It also warned that the jobless rate this year will likely be worse than expected, lowering its forecast to an average 12.6% unemployment for 2014 due to weak labour market conditions and still sluggish demand.

Finally, if all of that fails, there is always war to grow insolvent economies in a Keynesian world. Such as the now annual attempt to stir conflit in the middla east, and, as of this week, Ukraine. Fingers crossed for Italy, and the rest of the "developed world" the Keynesian priests get what they have so long been hoping for.

 

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Sat, 03/01/2014 - 15:35 | 4494136 newsguy68
newsguy68's picture

3 Sandy Hook Victims Families Have Won Lottery Jackpots, Twice, While Others Have Also Received Free Homes

 

http://govtslaves.info/3-sandy-hook-victims-families-won-lottery-jackpot...

Sat, 03/01/2014 - 15:43 | 4494148 Independent
Independent's picture

What does this have to do with Rome being bailed out?  -1 for not staying on story topic lol

I hope Rome doesnt use up too much money some of it is needed for enslaving the Ukrainians

Sat, 03/01/2014 - 15:44 | 4494154 max2205
max2205's picture

What a financial shit hole. ..send in the lions....Detroit Lions

Sat, 03/01/2014 - 15:50 | 4494169 James_Cole
James_Cole's picture

The city of some 2.6 million people has been bailed out by the central government each year since 2008.

Can't argue with success. 

Sat, 03/01/2014 - 15:57 | 4494187 Silveramada
Silveramada's picture

honestly, we romans should just trow all the politicians into the colosseo, get all the wild animals from the giardino zoologico and enjoy the show...

Sat, 03/01/2014 - 16:53 | 4494416 superflex
superflex's picture

Maybe the Vatican can use some of their gold to help out.

Sat, 03/01/2014 - 20:20 | 4495169 negative rates
negative rates's picture

When?, huh??

Sat, 03/01/2014 - 16:26 | 4494261 CognacAndMencken
CognacAndMencken's picture

 

 

The end of this article seems to be indirectly accusing Obama of "military Kennesianism," whereby a country is ruled by war hawks, and military build-up is disguised as economic growth.    

But that's not what this chart is showing:

http://research.stlouisfed.org/fred2/series/FDEFX

Under Bush, the National Defense Consumption nearly doubled from $400B to almost $800B, as the US threatened everyone and even invaded the wrong country after 9/11.  The Bush Administration was the most obnoxious group of war hawks this country had ever known.  It took a few years for that trajectory of spending to scale back, but under Obama, the amount of money spent on war is finally reversing.  

Accusing Bush of being a military Keynesian makes sense.  But Obama?  Not according to the facts.  For some better perspective, take the above chart and remove the periods when we had a republican president.  

Sat, 03/01/2014 - 16:30 | 4494327 James_Cole
James_Cole's picture

Accusing Bush of being a military Keynesian makes sense.  But Obama?  Not according to the facts.  

Defence spending has gone up. 

http://www.usgovernmentspending.com/year_spending_2014USbn_15bs2n_300036...

Sat, 03/01/2014 - 17:04 | 4494474 CognacAndMencken
CognacAndMencken's picture

 

 

James, you dirty tramp...

Clicking on your link provides no relevant information; it hasn't been updated since 2011.  However, if I click around within that site, I eventually end up here:

http://www.usgovernmentspending.com/defense_chart_30.html

And it says exactly what I said: the initial trajectory was upwards, but now - under Obama - it's in decline.   

C'mon James, you're better than that....

 

Sat, 03/01/2014 - 17:13 | 4494514 nightshiftsucks
nightshiftsucks's picture

Shut up you fucking idiot,every period in history is different.

Sat, 03/01/2014 - 17:26 | 4494579 James_Cole
James_Cole's picture

Clicking on your link provides no relevant information; it hasn't been updated since 2011.

Huh? It's updated all the time. 

I don't have a dog in this fight. You could argue how a lot of it is legacy costs but military budgets have not actually taken a hit under obama (for all the whining you hear about it on tv). Point out which year Obama era spent less than Bush?

Sun, 03/02/2014 - 06:59 | 4496460 Urban Redneck
Urban Redneck's picture

They don't need to send in the Detroit Lions, they just need a garbage collection, police and carabinieri strike during a Roma v Lazio match and the ensuing Zombie Apocalypse would take care of it (and since both teams are based in Rome - no one else has to get hurt).

Sat, 03/01/2014 - 15:52 | 4494173 graneros
graneros's picture

What does Roman money have to do  with enslaving Ukranians? -1 for being a hypocrite.

Sat, 03/01/2014 - 15:59 | 4494192 Silveramada
Silveramada's picture

seriously...

Sat, 03/01/2014 - 15:43 | 4494151 Mad_max
Mad_max's picture

It's ok. They are socialist. They have a magic money tree. There are no consequences in socialist land.

Sat, 03/01/2014 - 15:58 | 4494180 James_Cole
James_Cole's picture

Not only are they obviously not socialist they are only tangentially a democracy, at least currently. 

http://www.politicalcompass.org/euchart

Sun, 03/02/2014 - 07:14 | 4496474 Urban Redneck
Urban Redneck's picture

They are socialist, tax dodging is the Italians' 2nd national pastime and it is enjoyed by both rich and poor alike, everyone contributes their "fair share" to the collective effort... But Italy isn't even "tangentially" democratic at this point, as long as King Giorgio and the ECB are running the show.

Sun, 03/02/2014 - 04:25 | 4496348 highly debtful
highly debtful's picture

These days, everybody seems to have a magic money tree. Looting the treasury is no longer the privilege of socialists, but of the entire political class. Maybe all the others just learnt from the best.

Sat, 03/01/2014 - 15:44 | 4494153 sixsigma cygnus...
sixsigma cygnusatratus's picture

Rome will do as they always have - blame it all on the Etruscans.

Sat, 03/01/2014 - 15:46 | 4494161 ebworthen
ebworthen's picture

The end run is a debt jubilee, including individuals and households (imagine that).

Sat, 03/01/2014 - 15:46 | 4494162 Angus McHugepenis
Angus McHugepenis's picture

Rome needs another bailout? Why don't they just start clipping coins again? Surely it's much easier to do these days when all their "coins" are now 0's and 1's on a computer?

Sat, 03/01/2014 - 15:49 | 4494168 Not Too Important
Not Too Important's picture

I thought G-S was going to buy the local power company, and some acreage with some old marble shit on it. Somebody's not going to be happy . . .

Sat, 03/01/2014 - 15:51 | 4494171 Jack Burton
Jack Burton's picture

Italy as a faithful EU member is now liable for their part of the 35 billion dollars Ukraine needs to avoid default. This obligation will be welcomed by the Italian unemployed as part of their brotherly duty to the EU. I don't see any problems here.

Sat, 03/01/2014 - 15:59 | 4494197 PontifexMaximus
PontifexMaximus's picture

Neither do I. Ukraine hookers are busy in Rome and elsewhere in Europe.

Sat, 03/01/2014 - 15:53 | 4494174 tenpanhandle
tenpanhandle's picture

The fall of Rome has become an annual event.  Maybe they could stage a re-enactment type event replete with a mob stabbing the PM in the back while Germnic tribes sack the city.  Might the general coffers fill.

Sat, 03/01/2014 - 16:14 | 4494176 PacOps
PacOps's picture

Meanwhile, back in Scotland:

Royal Bank of Scotland has lost all the money invested in it by the taxpayer six years ago when the lender came close to collapse.

The bank has confirmed its total losses since its bailout have now drawn level with the £46bn pumped into it in 2008 in return for an 81pc stake.

 

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10664372...

Its gone viral. /

Sat, 03/01/2014 - 17:55 | 4494684 shovelhead
shovelhead's picture

Despite, the loss RBS said it had put aside £576m to pay staff bonuses for 2013.

 

Gotta retain that high quality help.

Now you own 81% of a gaping asshole.

Sun, 03/02/2014 - 13:47 | 4497626 Colonel Walter ...
Colonel Walter E Kurtz's picture

I saw that also.

Bonuses! This crap get crazier every freaking day. I have to get myself on the government dole before it is too late.

 

Sat, 03/01/2014 - 15:58 | 4494191 PontifexMaximus
PontifexMaximus's picture

Salva Roma with EUR 570 Mio. passed, as expected, the first beauty contest of Matteo & cons. Nothing to worry about. As mentioned many times, parioli restaurants plentiful, still very high quality of life, what else do you want?

Sat, 03/01/2014 - 16:13 | 4494252 wuush
wuush's picture

Guys, why do you wanna stop this party?

Europe is fine, obviously

To the moon

Sat, 03/01/2014 - 16:28 | 4494321 Sparky_ZA
Sparky_ZA's picture

Europe,US etc. can go on for a long time.

I ive in a country of 50mil people. Only 10% earn enough to pay tax. 10% supporting the 90% and the politicians. Poor get free housing and subsidised everything.

My personal tax is about 34%, then there is 14% VAT on everything I buy and to add insult to injury there is a huge levy on feul and electricity.

Still a long way to go in the devoloped world. Just enjoy the ride.

See ya at the bottom!

Sat, 03/01/2014 - 16:42 | 4494375 falak pema
falak pema's picture

Having more and more people living on subsistance level is now the norm for the next generation in the West.

Until the world Oligarchy invents a new paradigm, or in the event they can't their world comes down in dire deflation.

This is the NEW norm of west : 0.01% super rich. 1% comfy, 19% middle class near minimum wage and 80% Paupers on hand outs.

Get used to it unless the young refuse and start a new revolution, 'cos our generation is too comfy to do that via constitutional reforms or to achieve peaceful transition.

Sad but true fact of life.

Sat, 03/01/2014 - 16:42 | 4494378 pupdog1
pupdog1's picture

Filthy fucking Goldman squids will end up owning the colosseum.

Sat, 03/01/2014 - 16:53 | 4494421 mendolover
mendolover's picture

Fuck Rome.  I want to see more Russian helicopter videos.

Sat, 03/01/2014 - 18:01 | 4494725 Silveramada
Silveramada's picture

RT on You Tube is just 1 click away...

Sat, 03/01/2014 - 17:17 | 4494537 PeeramidIdeologies
PeeramidIdeologies's picture

Randomly I happen to have a conversation with a friendly Italian woman this morning. She was really concerned with the fact that her mother has found herself financially entrapped in the country. Apparently if her mother was to sell her house, she would not be allowed to remove the proceeds from Italy. She also told me that if you wanted to withdrawal money from your own bank account you were subject to an inquiry from the bank, and possibly refusal!! ATM withdrawal limits have also been put in effect.

I had not heard of capital controls of this sort outside of Cyprus. It's pretty scary to consider these types of things could happen without the public being notified.

Sat, 03/01/2014 - 18:21 | 4494823 Silveramada
Silveramada's picture

Yep, thanks to M. Monti (ex GS douche) we have a limit of 1000 Euros for any cash transaction , higher amounts must be properly documented ...

Sat, 03/01/2014 - 20:18 | 4495160 Oldwood
Oldwood's picture

The public will always be the last to know....or at least told. If they pay attention they will always know, but no one really cares until its too late.

Sat, 03/01/2014 - 18:16 | 4494671 Radical Marijuana
Radical Marijuana's picture

I guess that as accelerating world events overtake the ability of words to keep up, the Tylers' scramble to pump out articles resulted in the last paragraph having two typos and some kind of grammatical error. Similarly, I thought that this short thread of comments is already one of the most incoherently scrambled of those that I have been looking systematically at for the last year or so ... It appears that nobody can keep up with how fast the world is becoming crazier and crazier, AS EVERY TIME SOME UNIT IS BAILED OUT WITH MORE DEBT, THE OVERALL GLOBAL DEBT INSANITIES GET BIGGER!

It seems to get more difficult to remain even slightly rational when one is looking at the on-coming "global bankruptcy tsunami" whose final SIZE constantly gets pumped up to be BIGGER every time another way to delay that hitting shore is found ... Somewhere, deeply buried under the bullshit accounting, is some sort of physical reality regarding the natural world. However, I, for one, can barely discern what that is, SINCE THE ACTUAL BASIS OF OUR ACCOUNTING SYSTEM WAS THE HISTORY OF THE ABILITY TO BACK UP LIES WITH VIOLENCE.

The city of Rome has now had its finances even more integrated into the globalized systems of electronic frauds, backed by atomic bombs. Truly, that is trillions of times more INSANE than anyone can now comprehend, and appears headed towards becoming quadrillions of times more INSANE. ... No wonder that neither the Tylers, nor most of the fools, like me, who bother to comment on these articles, can keep up, but rather appear more and more overwhelmed and scattered.

For those who have enough information, intelligence and imagination, the "global bankruptcy tsunami" IS SOMETHING REAL ON THE HORIZON OF HISTORY. Given the SIZE of that "global bankruptcy tsunami," which is constantly being pumped up bigger and bigger, by every action which temporarily postpones that, there are NO coherent plans regarding how to prepare for that, and even less coherent concepts about how it could be prevented.

Sat, 03/01/2014 - 20:03 | 4495122 MathWins
MathWins's picture

You nailed it!  I have been watching the coming tsunami since 2009, and I am continually amazed how they keep putting off the inevitable.  It's like watching a train wreck - you know how it's going to end, and it's not going to be good, but you can't stop watching.  Insanity for sure. I gave up warning my friends and family though; there are a few that agree with me and I'll talk to them about it, but the others think I'm nuts.  I never dreamed they could postpone dealing with reality this long, but it keeps going on and on..........

Sat, 03/01/2014 - 20:33 | 4495199 PeeramidIdeologies
PeeramidIdeologies's picture

Can't blame the Tyler's, lord knows they are doing more then their fair share to fight the good fight. Personally I find the whole "Internet information matrix" to be unnerving. As you have stated, with so much at stake, there is no telling what measures will be put in place to maintain the illusion.

Another good point raised in the lack of preparation or preventative action. The folly of keeping the majority out of the know, TPTB are effectively disarming mankind of it's greatest strength, that being of course, our ability to work together on a grand scale to solve large complex problems. It should be obvious to the elite at this point ( their actual intentions debatable) that they are incapable of working though this pending disaster by shuffling their electronic chips back and forth. People are starving, distraught and becoming increasing angry. It doesn't take a brain surgeon to figure out where this "energy" will be directed.

It seems to me that one of the obvious critical first steps to resolving this monetary issue is some good old fashioned honesty. Attempting to manipulated the minds of people with the media is only going to exacerbate the lack of trust and anger down the road. As we all know the the truth always comes out in the end.

Sat, 03/01/2014 - 18:33 | 4494868 Rising Sun
Rising Sun's picture

And the Euro keeps moving higher, because insolvency is obviously good for confidence in possessing that currency.

 

This upside down shit show just keeps getting better.

Sat, 03/01/2014 - 18:40 | 4494898 Peter Pan
Peter Pan's picture

Time for a joke except that this really happened in a conversation where some Greeks and Italians wrre present.

GREEK: It was us Greeks who invented sex

ITALIAN: Yeh, but it was the Romans who introduced it to womem.

Sat, 03/01/2014 - 19:55 | 4495102 itstippy
itstippy's picture

"Rome's administrators say it needs help with extra costs associated with housing the central government, such as ensuring public order for political demonstrations, and to provide services for millions of tourists."

Handled properly, hosting the central government and having millions of tourists each year is a good thing for municiple finances.  Who's running the place, Marion Barry?

Sat, 03/01/2014 - 22:07 | 4495356 spdrdr
spdrdr's picture

What have the Romans ever done for us?

 

https://www.youtube.com/watch?v=Qc7HmhrgTuQ

 

Sun, 03/02/2014 - 00:51 | 4496006 assistedliving
assistedliving's picture

See Mauldins piece about adding a grain of salt to existing 'fault lines'. 

http://www.mauldineconomics.com/frontlinethoughts/?utm_source=newsletter...

wonder what happens when u drop a boulder on it?

Sun, 03/02/2014 - 03:11 | 4496234 Kirk2NCC1701
Kirk2NCC1701's picture

Some aspects of the plan are simple and straight forward:  If you want to enslave a nation, you must enslave their governments by putting them into debt they cannot repay.

Even countries with a very healthy Debt/GDP ratio (<50%) are becoming targets.  Their govs and CBs are made to absorb vast amounts of toxic assets.  Those who refuse to, become targets of other means of compromising and attacking their regimes.

For info on debt-by-country, there are a number of sites that supply this info.  Even the CYA has public info on this:

1. Internal Debt = https://www.cia.gov/library/publications/the-world-factbook/rankorder/21...

2. External Debt = https://www.cia.gov/library/publications/the-world-factbook/rankorder/20...

Note that certain countries that have made recent headlines as to the 'solvency' have until recently been quite solvent -- even by CIA's own stats.  These include:  Argentina, Ukraine, Venzuela.

Anyone else troubled by this, or is the Normalcy Bias (or ther bias) strong enough to 'discount' these stats?

Sun, 03/02/2014 - 10:49 | 4496825 Let The Wurlitz...
Let The Wurlitzer Play's picture

All roads lead to Rome.

Do NOT follow this link or you will be banned from the site!