Berlusconi Screws Over The Wrong Person: ECB Shake Up Imminent Following Big French-Italian Relations SNAFU?

Tyler Durden's picture

Just when one thought the Italian PM could not possibly come up with yet another massive SNAFU, he does it once again. This time however he may have screwed over the wrong (non-underage) person. Last night, after the FT had previously leaked (incorrectly once again) that the Italian head would pick ECB executive Lorenzo Bini Smaghi to head the Bank of Italy following Mario Draghi's departure to head the ECB, Berlusconi instead chose a relatively unknown Ignazio Visco to head the Italian Central Bank. The move, while largely symbolic as it hardly matters who is in charge of the Italian bank but is of great import from a "national pride" perspective, managed to infuriate French leader Nicholas Sarkozy, who had previously made it clear he would advance his support of incoming ECB head, former Goldmanite and current Bank of Italy head, Mario Draghi, only if Bini Smaghi would be pulled and his seat would be vacated to allow a Frenchman to enter the ECB. That did not happen. So with the latest faux pas out of Berlusconi, he is now poised to destabilize not only Italian-French relations, but the percevied stability of the ECB if the Frenchman decides to make it an issue vis-a-vis his support of the incoming President. All in all, this is yet another reminder of the total and utter chaos that dominates Europe every single day. And somehow the broad public is supposed to believe that Europe can come up with a solution to an insolvable math problem...

The Telegraph explains in detail:

Silvio Berlusconi can expect an awkward encounter with Nicholas Sarkozy, the French president, on Sunday after snubbing him with a surprise choice over who will be the next head of the Bank of Italy.


The looming spat will only heighten tensions between eurozone leaders as they meet in Brussels for a crucial summit on the debt crisis.


Italy's embattled prime minister had been expected to nominate Lorenzo Bini Smaghi, an Italian who sits on the executive board of the European Central Bank, as the next head of the Bank of Italy.


Mr Smaghi's appointment would have freed up a place on the ECB board and made way for a Frenchman to take the post.


Mr Sarkozy had made that a key condition of his support for Mario Draghi, the former head of the Bank of Italy, to replace Jean-Claude Trichet as president of the ECB at the end of this month.

But instead Mr Berlusconi on Thursday night unexpectedly chose Ignazio Visco, a 30-year veteran of the Bank of Italy, to lead the institution, to the fury of the French. 


That means that Italy will have two members on the ECB's board but France will have none. Mr Bini Smaghi's refusal to resign from the board of the ECB until the end of
his term in 2013 leaves almost no wriggle room on the issue for Mr

This also means that we can now expect a firestorm of media-based outrage in France which will now perceive itself as snubbed by a country that it is risking its sarcosanct AAA rating to bail out. Alternatively, the Italian is also stuck:

While Mr Berlusconi's decision will anger president Sarkozy, in Italy it was broadly welcomed by the media, the banking sector and employers' federations, who had said that appointing Mr Bini Smaghi would have been a humiliating concession to France.


With his approval rating at a record low and daily predictions that his government will not see out its term to 2013, Mr Berlusconi seems to have calculated that keeping domestic critics sweet was more important than fostering good relations with Paris.

Alas only a complete idiot would make that conclusion at a time when it is of paramount importance to at least retain the perception that things in Europe are calm, cool and collected. Instead, we get... this.

The fall out of this comedy, as Europe's two biggest drama queen engage head on will be one for the ages.

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redpill's picture

Indeed math is very stubborn.  I think we need a formal investigation into mathematicians for potentially criminal speculative conduct.

In fact, we might as well just BAN MATH, like Euro financial institution short-selling.  It's just a nasty and unhelpful concept.  We need SOLUTIONS for Europe, not petty, obstructionist mathematics.

Hephasteus's picture

We need a good rumor about mysterious alchamathmeticians that know how to solve the p does not = p + i formula.

redpill's picture

We don't need formulas, and why do people keep saying this is all unaffordable?  Why why why?  Just stop!  Why can't we just say it IS affordable, and then we will live our lives knowing it is affordable and it will BE affordable.  You see?  Math and formulas are impeding this successful process.

Fukushima Sam's picture

Sarkozy is frantic, on the phone with NATO trying to figure out how they can bomb Italy and make it look like rebels.

Hephasteus's picture

How big of a hooker bunker does he have in the underground missile (hide out from the pissed off slaves chamber).

Larry Darrell's picture

This cover story is really quite simple.

It doesn't have to be rebels.

The false flag can be blamed on those who supported Gadaffi as retaliation for his assassination.  Retaliation against Italy instead of France simply because it is geograpically closer, so easier to attack.

AcidRastaHead's picture

Damn, I knew I should have played and frolicked that one summer instead of taking calculus in summer school.

Pegasus Muse's picture

You see that photo?  Berlusconi is a University of Texas fan. 

Hook'em Horns, Berli! 

Deadpool's picture

Archduke Ferdinand will set things right again...Oh, right. Not good.

sqz's picture

Epic Nepotism Battles of History #195583

gojam's picture


Too big headed to fail ??

Unprepared's picture

Sarkastick would be even more pissed off when he discovers that Buralesque has also planted an undercover agent in the French presidential bed

kaiserhoff's picture

Seenayourayeh ,  I'va splain to you again and again..., You donna fuck with the froggie, hezza little boy, or hezza goat, until AFTER  you getta alla hez MONEY.

Manthong's picture

So the spaghetti slinging Chianti chuggers fart in the general direction of the cheese eating surrender monkeys..

That's OK.. the kraut and sardine slobberers from the north will pay for the whole feast.

redpill's picture

Yes!  And the defacto Kings and Queens of Europe shall dine on the backs of the peasantry once again, just like the old days.  Huzzah!  Serving wench, bring us more mead!

earleflorida's picture

hard wired fool's i say,... unadulterated incest gone wild! 

Ahmeexnal's picture

Berlusconi fathered Carla Bruni's child??
Sarkozy must be enraged!
This means war.

macholatte's picture

Does this mean Goldman Sachs is out? If yes, then here's a green arrow for Berlusconi!

Nicholas Sarkozy, who had previously made it clear he would advance his support of incoming ECB head, former Goldmanite and current Bank of Italy head, Mario Draghi


from Wiki:

Draghi was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005). A controversy existed on his duties while employed at Goldman Sachs. Pascal Canfin (MEP) asserted Draghi was involved in swaps for European governments, namely Greece, trying to disguise their countries' economic status. Draghi responded that the deals were "undertaken before my joining Goldman Sachs [and] I had nothing to do with" them, in the 2011 European Parliament nomination hearings.[4][5]




Nascent_Variable's picture

Zay must prezerf membership stabeeleetee.

SwingForce's picture


jdelano's picture

No, it's an effin Fellini film

sushi's picture

Where is Mrs Teasdale when you need her?

Deadpool's picture

this may be the most ludicrous policy making era of all time. France wants Germany to pay more to save themselves, Germany wants to pay less to protect themselves and Italy wants them both to go to hell and it's all over Greece and Spain (WWII was more easily settled). it's flippin' hilarious. Al Quida must be laughing their collective asses off. And this while Q-daffy, Mubarak and Assad fall. Thank God America is separated by an ocean (of water and dollars)...for now.

agent default's picture

France wants to tangle Germany into a levered mechanism so that Germany cannot one day get up and leave the Euro.  One debt to bind them all.

redpill's picture

Of course, and I'm sure there are some of the German elite who don't mind that because it will give them more political "pull" in the overarching EU structure.  The one stubborn sticking point is the German people, who for some reason don't want to be totally fucked over.  So the trick is, we have to make this bailout scheme so goddamn complicated that no one really understands it anymore.  Because if it was understandable, the German people would never go for it.

sockcutter motorforker's picture

hes probably going to use those seats at the ECB to secure more bunga bunga

AldoHux_IV's picture

Put 'em in the octogon.

NotApplicable's picture

When two tribes go to war, one is all that you can score.

101 years and counting's picture

LOVE IT!  Italy knows they have france and germany by the short and curlies and is making it known.  Bail US out or YOUR banks fail.  Why Greece doesnt do the same...I HAVE NO IDEA.

Andrew Jackson epitaph's picture

European financial mess. Monty Python's style. Vostfr

the iD's picture

its not delivery, its DiGiorno.

Wolferl's picture

Bravo, cavaliere. Tell this frogeating dwarf what an a$$hole he is. Sometimes, very rarley, i really like what Silvio is doing.   

drider's picture

That was a really slick move that Berlusconi pulled. Kudos to him!

Temporalist's picture

Isn't Snafu the name of one of the bunga bunga girls?

Money 4 Nothing's picture

No, no no.. Her name is Snatch Fu, she was the Oriental one from the last December get together.

spastic_colon's picture it possible we are paying TOO much attention to Europe?  I know we should be, but it could also be a bit of a smokescreen to the below........From the ECRI, and not that it is a surprise...........

U.S. Economy Tipping into Recession

Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.

ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”

Last year, amid the double-dip hysteria, we definitively ruled out an imminent recession based on leading indexes that began to turn up before QE2 was announced. Today, the key is that cyclical weakness is spreading widely from economic indicator to indicator in a telltale recessionary fashion.

Why should ECRI’s recession call be heeded? Perhaps because, as The Economist has noted, we’ve correctly called three recessions without any false alarms in-between. In contrast, most of those who’ve accurately predicted a recession or two have also been guilty of crying wolf – in 2010, 2005, 2003, 1998, 1995, or 1987.

A new recession isn’t simply a statistical event. It’s a vicious cycle that, once started, must run its course. Under certain circumstances, a drop in sales, for instance, lowers production, which results in declining employment and income, which in turn weakens sales further, all the while spreading like wildfire from industry to industry, region to region, and indicator to indicator. That’s what a recession is all about.

But how can we have a new recession just a couple of years after the last one officially ended? Isn’t this too short for an economic expansion?

More than three years ago, before the Lehman debacle, we were already warning of a longstanding pattern of slowing growth: at least since the 1970s, the pace of U.S. growth – especially in GDP and jobs – has been stair-stepping down in successive economic expansions. We expected this pattern to persist in the new economic expansion after the recession ended, and it certainly did. We also pointed out – months before the recession ended – that because the “Great Moderation” of business cycles (from about 1985 to 2007) was now history, the resulting combination of higher cyclical volatility and lower trend growth would virtually dictate an era of more frequent recessions.

So it comes as no surprise to us that, with the latest expansion only a couple of years old, we’re already facing a new recession. Actually, such short expansions are hardly unheard of. From 1799 to 1929, nearly 90% of U.S. expansions lasted three years or less, as did two of the three expansions between 1970 and 1981. In other words, such short expansions are unusual only with respect to recent decades.

It’s important to understand that recession doesn’t mean a bad economy – we’ve had that for years now. It means an economy that keeps worsening, because it’s locked into a vicious cycle. It means that the jobless rate, already above 9%, will go much higher, and the federal budget deficit, already above a trillion dollars, will soar.

Here’s what ECRI’s recession call really says: if you think this is a bad economy, you haven’t seen anything yet. And that has profound implications for both Main Street and Wall Street.

aaannny who...............

jdelano's picture

sssssshhhhhh!!! you're scaring baby Michael  (Murphy)

spastic_colon's picture

Thanks.........I guess the ECRI's reports are no longer the darlings of the MSM and talking heads etc.  Today's report got no respect.  They has become the Tom Cruise of indicators............apologies for the OT posting

Wolferl's picture

Off topic but a good posting.

High Plains Drifter's picture

what does it mean when someone makes a hand sign like that?  ron paul makes that sign too...........hmmmm

SpeakerFTD's picture

ron paul makes that sign too...


...when Texas plays Oklahoma

Conax's picture

it means Hail Satan, I'm your boy!

(or it's just a gang sign, like "we bad" or something.)

mahalopamala's picture

Me thinks he is signaling all his freemason buddies.


Money 4 Nothing's picture

Me thinks he is signaling how many legitimate marriages are in his family..

Use of Weapons's picture

The intarweb has four main theories:

#1 It is the universal sign of the Lucifarian cabal bent on bringing the world into Satan's grasp and/or Bohemian grove Illuminati, favoured by politicians [thumb extended?]

#2 It is the universal sign of rock & roll, favoured by Kiss and so forth [no thumb extended]

#3 It is the sign of a Southern US sports team, most likely with a name related to bovines [thumb unknown]

#4 It is the Italian way of saying "your wife is cheating you, probably with your best friend" [no thumb extended] ( for an old Naples guy explaining them all - look to the last couple of minutes)


Someone above understood it, thus the comments about fathering Sarkozy's newborn daughter... It has been commented on previously that the Big Bunga was signalling his clear intention to his detractors, Europe and the world in general that he wasn't playing the game. Coupled with his "Italy is shit" comments, the old fox does it again.


Wow, bizarre world - sign language lessons on a financial blog