Following Tremonti Speech In Parliament, Serial Halts Of Italian Banks Resume

Tyler Durden's picture

Not even an hour after Tremonti addressed parliament discussing the various ways Italy would have to reform in order to meet European demands for austerity, the now traditional serial collapse of Italian banks resume, with the halt of the unholy trinity Unicredit, Intesa, Banca dei Monte Pasci, as well as Mediobank ensuing. Concurrently the same Italian weakness appears to have spread to France where BNP falls over 5% and SocGen down over 6%, affecting financials across the Eurozone, and sparking visions of a repeat of yesterday's collapse in European markets led by the fins. And while there is the usual plethora of rumors as to what may be responsible for this renewed weakness for now it is best not to speculate for fear of black helicopters, what is certain is that Italy's main opposition leader is setting the stage for a rerun of Greek daily strikes, by objecting to the balanced-budget plan at the heart of the Italian deficit cutting program. As Reuters reports, Italian opposition leader Pierluigi Bersani on Thursday rejected proposals for a blanket constitutional rule forbidding budget deficits but said his party was ready to support rules for greater budget discipline. Bersani said his party was ready to support measures to reinforce discipline in public finances but said it made no sense to impose unrealistic constraints on policy. "First, let's not talk about things that don't exist in any place in the world," Bersani said during a hearing of the parliamentary constitutional committee. "Balancing the budget in the constitution -- well, we don't intend to castrate ourselves for centuries from any possible economic policy." "So let's find a solution that has flexibility." Translation: we now have at best a few weeks before the strike (and riot) cam moves from Syntagma Square to Piaza Navona. As for Italian (and French) bank halts: our advice - don't exhale or the entire thing will collapse, and the smallest rumor will bring the European financial sector to a screeching halt yet again.

Reuters on Tremonti's speech:

Italy is ready to act following European requests for labour market reform and privatisations to spur growth as well as other measures to balance its budget by 2013, Italian Economy Minister Giulio Tremonti told parliament on Thursday.


A letter from the European Central Bank last week asked for large-scale privatisation of local services, pension reform and greater flexibility in the labour market, Tremonti said.


Tremonti said Italy needed stronger austerity measures to meet its target of balancing its budget by 2013, and pledged stronger action to fight tax evasion and abuse of fixed-term employment contracts.

And the contextual interpretation:

Economy Minister Giulio Tremonti appeared in parliament on Thursday to discuss the government's response to the euro zone debt crisis amid increasing criticism of its failure to provide any detail of austerity plans.


Prime Minister Silvio Berlusconi told unions and employers on Wednesday that the cabinet would approve an emergency decree with deficit reduction measures by August 18 but provided no concrete proposals.


With tense financial markets hungry for detail of government plans to fast track some 20 billion euros of austerity measures to balance the budget by 2013, Tremonti addressed the parliamentary constitutional affairs committee.


Pierluigi Bersani, leader of the centre-left opposition Democratic Party, said the extreme turbulence on financial markets over recent weeks showed that more urgency was needed.


"The government didn't say anything to the unions and employers yesterday, that's the point, just as they didn't say anything in parliament 10 days ago," he told state television. "I hope Tremonti comes with some more detail today," he said.


Berlusconi has made a handful of statements on the escalating markets crisis since the beginning of the month, addressing parliament last week and giving a news conference on Friday when he pledged to fast-track reform measures.


But there has been widespread criticism that the government has not been clear enough about its plans to repair public finances in the face of a collapse in market confidence.


"European bourses, in their disastrous fall, cannot wait until Aug. 18," the respected daily Corriere della Sera said in a front page editorial, adding that so far no credible proposals had been offered.

At least now we have a date (one week from now) when we can add Italian daily strikes to the roster of daily entertainment. And with the FTSE MIB already so fragile a mere whisper an ocean away halts the market, we can't wait to see what antics those pranksters at the CONSOB come up with to prevent this latest house of cards from dropping terminally.

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doomandbloom's picture

"Italy is not France, is not Greece, is not US " T-shirts on sale

Fazzie's picture

Atright!! The perfect match for my Dennis Kneale autographed Dow 10000 hat!!

oobrien's picture

Brothers and sisters!

Fuck it all in the ass.

We should open the American Markets with The Bernanke Song:

My advice?

Tune in, turn on, and drop out.

But what the fuck do I know?

achmachat's picture

main event at the next olympic games:

Quintus's picture

I wonder if there will be an Arial can-kicking event involving the use of helicopters?

Fazzie's picture

Now that would make a funny modern day Monty Python skit. The central bankers in an olympic can-kick.

ZeroPower's picture

Tyler news all over SG possibly BNPP will be fucked for liquidity over coming days - big Asian funders cutting funding to them.

Silver Dreamer's picture

"For to win one hundred victories in one hundred battles is not the acme of skill. To subdue the enemy without fighting is the acme of skill." --Sun Tzu

Our enemies must be snickering themselves to sleep at night.

Catullus's picture

The Swiss are considering pegging the franc to the euro? This euro thing goes beyond just currency. Too many people have staked their political lives on it.

Sudden Debt's picture

Italians.... why can't they act like the US and do spending cuts in 3 or 4 or 5 years.... or a decade from now.... or a century from now.... I mean, it isn't really that concrete like Obama's austerity programm now does it?


supermaxedout's picture

You know what Im wondering about?

Where does the ECB have the money from to buy Iralian and Spanish bonds. Having the following in mind:

1) To my knowledge the capital of the ECB is limited and they have only a relative small amount of liquidity left.

2) The ECB is not aloud to print money

3) No EU memeber is injecting fresh cash into the ECB.

So where does the money come from for example for this action:

Italy raises6.5bn in bills sale - The Irish Times - Wed, Aug 10 ...

My idea is, that the Chinese are buying these bonds via the ECB. They use their US Dollars for buying these bonds instead. This would fit to the official news that China is going to support Europe and wants to minimize its exposition to the US Dollar via treasuries,.

I believe the thinbking of the Chinese is, that Italian bonds are better than US treasuries in so far, that the expected reovery rate is higher. That is not difficult to predict because of the US printing press always in full action. While the Italian do not have one. Its that simple.



ZeroPower's picture

CN are buying bonds, but a lot more evidently, are the reason the EURUSD is still at these levels. The FX desk constantly has asian names buying huge lots at points of the day.

Remember last summer when stuff was only partially as bad as now and EURUSD was hitting on 1.20s. By that logic, we'd see around 110s or 100s now on that rate. But the PBoC is diversifying out of USD

supermaxedout's picture

That makes perfect sense. It is also my opinion that without CN intervention the Euro would be under extreme pressure.

Its a battle of the titans and they are all turning on the biggest wheel, the currency exchange rates. The US in one direction and China in the other.

entendance's picture

ZEROHEDGE better leaves the fake Bersani's opposition alone and tunes its attention up to the real and only serious nightmare for all these corrupt italian caste: Beppe Grillo and its 5 stars movement



Fazzie's picture

The rock will hit the hard place in spite of the central bankers and politicians of the world throwing the working class in between them to soften the blow.

 Austerity (not that it will ever hapen voluntarily) kills the economies because all that wasteful spending is a large part of these bankrupt nations economy.

 Non-Austerity kills em as well and is in progress.

 Empty promises, bailouts,QE, and such kicks the can but the can has been kicked until it has disintegrated.


PontifexMaximus's picture

I told you before, Italy is the 800 lbs gorilla in the room. The casta politica don't care a dime about the future of the bel paese - only for their personal wallet. And they will suck the country till the last drop of blood. But inbetween you wil have riots, because the italian unions are powerful and extremely aggressive. They will never fix it. And in the end, der Deutsche Michel wird der Zahlmeister sein. But Germany unfortunately didn't realize that yet. There is no other solution, Thanks to the Chinese, that they give a hand keeping the EUR on decent levels...

chinawholesaler's picture

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