FT Reports Italian Government On Brink Of Collapse

Tyler Durden's picture

Certainly not helping European sentiment is the report from the FT that "Silvio Berlusconi’s centre-right coalition government in Italy appears in danger of collapsing over European Union demands for a demonstration of concrete action on economic reform by Wednesday’s summit of eurozone leaders. The EU ultimatum delivered to Mr Berlusconi in Brussels on Sunday risks breaking his coalition instead of giving it an external impetus to move ahead on measures to cut Italy’s debt and promote economic growth." So you mean that extending the retirement age by a few hours is not credible reform? That surely is news to Bunga Bunga. And after all, remember the dedication with which Italy promised it would promptly enforce austerity after it was admitted to the SMP bond monetization program, only to completely forget all promises 48 hours later? It seems Europe, which has had enough of being humiliated by the corrupt pederast, has remembered: "The ultimatum was delivered as part of efforts to resolve the eurozone sovereign debt crisis, but the Italians’ failure to reach agreement on reform threatens EU leaders’ stated goal of finalising at Wednesday’s summit a comprehensive solution to the crisis." So the question is: how long before The Guardian refutes all FT speculation that Italy is scuttled with a well-timed rumor at 3:45pm?


Talks on Tuesday morning between Mr Berlusconi and his Northern League coalition partners failed to resolve the deadlock – centred on proposed pension reforms – after negotiations into Monday night made little progress.


“The government is at risk,” Umberto Bossi, leader of the fiercely eurosceptic and federalist Northern League, told reporters in Rome. “The situation is difficult, very dangerous. This is a dramatic moment,” he was quoted as saying.


Commentators said the crisis was the most serious facing Mr Berlusconi since his election victory in 2008, recalling memories of 1994 when the Northern League brought down his first government after just a few months.


The prime minister’s People of Liberty party has proposed that the pension age be raised to 67 years from 65 in line with increasing life expectancy, and that the system of length-of-service pensions also be modified. The Northern League is opposed and La Padania, its party newspaper, on Tuesday attacked what it called “euro-tyranny”.


Altero Matteoli, a PDL minister, said a collapse of the government was a “hypothesis”. He also noted that talks were continuing and that a compromise with the Northern League was still possible.

In other news, it appears that the spin which is so far keeping the Euro from collapsing on tomorrow's now disclosed EcoFin meeting cancellation is that even though Europe's finance ministers can not agree, 24 hours ahead of the deadline, on the formulation of the most complex SPV ever conceived, somehow the Eurozone leaders will succeed...

Just wow.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
GeneMarchbanks's picture

Yentervention?! Is that what you wish for the holidays?

FranSix's picture

I see the ¥ going 1:1 with the Rupee!

ratso's picture

Berlusconi , who has always had his own version of reality, is not going to accept the fact that he has personally destroyed the Italian economy with his grandiosity 

Ghordius's picture

blablabla "singlehandedly" & "destroyed"

Bossi and Berlusconi are now repeating the same procrastination show as Merkel and Sarkozy

even if the gov would fall - nothing new for Italians, used to have 7 govs a year in the past: President Napolitano (who is a fierce post-communist pro-european constitutionalist) would appoint Berlusconi for ad-interim with a technical cabinet stuffed with pro-europeans, i.e. without the Lega Nord...

eureka's picture

So you mean that nothing is new in the world...

- as in "xtending the retirement age by a few hours is not credible reform..."

 - and then we can conclude that mankind does NOT evolve, and that technology and robotization does not make for better lives for human beings, but rather only for the small elite who owns the machones, the banks, the politicans and the "security"-military and spy agencies apparatus?

IF - these facts are the case - then what do we do?

Care only about ourselves, become all bohemian hedonists - or - revolve...?

Ghordius's picture

France and Germany have both soon elections

it's simply not time for reforms

politicians are usually not afraid of making mistakes - see exibit A: war

politicians are usually very afraid of being blamed for a mistake before elections

Djirk's picture

British media are scared of Burli mans media empire.....UK calling out Italy on debt....look who is talking

GeneMarchbanks's picture

Collapse: a word to be repeated with increasing frequency as the Great Unwind continues.

Yamaha's picture

Call the f----- Pope for the world bank plan. Any money left at the Vatican after paying out the children?

qussl3's picture

And the EUR is up on this?

Bizzaro world.

HelluvaEngineer's picture

Yup.  The selloff just ended.  That was it.  Back to vapor volume melt-up.

letitgo's picture

Instead of just saying its bizarre that the EUR is going up on such news, we don't we try to understand why?

I'm becoming convinced that all these political issues in Europe are actually what is keeping the currency up relatively high in a crisis.  If there was more US-style relative political functionality they might have the agreement to throw the money printers at the problem by now and then you'd have your EUR collapsing against everythning.

It may be possible in light of this that European political deadlock means that the Euro will outperform everything but unmanipulated risk-off currencies as the currency union falls apart.

I know this seems counter-intuitive, but does anyone see where I'm coming from?


HelluvaEngineer's picture

I think someone is printing dollars, buying Euros, and giving them to European banks to keep the lights on.  All on the up and up.

GeneMarchbanks's picture

'I think someone is printing dollars'

Yes who could that be now?

letitgo's picture

Not a bad theory.  Would fit with the idea that the TPTB who can control the monetary system (those in the US unlike those in the EZ) are actively working to help the market, help banks and help debase their own currency -- all of which seem to have been their key financial policy priorities over the last couple of years.

Ultimately this won't help the big German export companies controlling the governing coalition though.  German and US financial war, bitchez!


LawsofPhysics's picture

currency and trade wars have been discussed at length on ZH and yes they are getting hotter by the day.  Duh.  Got physical?

letitgo's picture

You all seem to assume that there's a binary world of owning either USD or physical PMs.  The point I am trying to make is that there are factors at play which might help other assets (like the EUR) as much as or more in terms of USD than PMs.

If there's an uneven currency war going on in which the US can debase and the EZ can't, I'd prefer to hold my CHF and EUR, not buy PMs with them -- please don't always assume that everyone is stuck only in USD.

Ghordius's picture

I believe you are right

"market manipulation", IMHO, is to keep the Dollar stronger for a while - nearly all here assume the other way round

I get the distinct impression that several MegaBanks are "banking" on EURUSD at 1.30 by the end of the year and have lots of bets on it

a lot of partecipants to the comments seem to forget that for some 300 million Europeans the EUR is the unit of accounting

I prefer CHF/PMs/EUR

Spanish Lizard's picture

Yep, someone in the EU picked up the Red Bennie Phone they keep in the bottom desk drawer and asked for help....

Global Hunter's picture

Yes I thought something similar to you, however in the last week or so TD has proposed that EUR strength is a function of insolvent Euro banks selling USD assets and repatriation of assets to EUR.  However in theory if the Euro clowns can't organize a money printing operation then it would outperform the USD.  Whether that is what is actually happening or driving the markets right now I haven't got a clue!

letitgo's picture

Yes, presumably to raise the capital that Merkozy want them to raise.  But if the repatriation of US assets by European banks was affecting EURUSD, then surely it would also have affected the US assets they were selling. Raising capital implies selling risk assets under Basel rules, doesn't it? Given what's been happening on the USD risk markets recently, I can't see what would be the corollary effect of EURUSD going up because European banks are repatriating risking USD assets into EUR cash.

qussl3's picture

You make a good point.

The US would print willy nilly to keep the party going, and as long as there isnt hyperinflation and American Idol is on the masses will continue to circulate the USD as the medium of exchange and implicitly accept it as a store of value, all while bitching about rising prices.

The EUR may strengthen now simply because its undergoing deflation, but the problem is that the EZ has reached the debt event horizon where there isnt enough real growth to service the interest on the existing debt pile.

The ECB must monetize or some external party must play the white knight, else there would not be much of an EZ bank system left when the unwind occurs.

The sovereigns can no longer backstop the banks.

Perhaps they will find a way to call mulligan and it'll all be roses and unicorns but i doubt it.

Ghordius's picture

you are implying that we live on a planet where sovereigns cannot default

this goes against all lessons from history: that eventually all sovereigns default, either straight or by monetization/inflation

the EZ ist trying hard to find a way to get Greece to default straight - and the banking system is trying to stop them

riley martini's picture

The FT does anyone still believe rumors from the FT ?

Quintus's picture

"...how long before The Guardian refutes all FT speculation that Italy is scuttled with a well-timed rumor at 3:45pm?"

Well, since it's now 10:30am, I would say about 5 hours and 15 minutes?  Just a guess.

sultan_selim's picture

LOL - this week is shaping up to be even better than the crap-show that was this last weekend's summit. Good stuff.

Elias Soprano's picture

Berlusconi should make merkel into one of his sex slave

Falcon15's picture

I think it'll be the other way around. Italy absolutely needs Germany.

hedgeless_horseman's picture

Merkel has already made Berlusconi into one of her scapegoats.

eurogold's picture

No Merkel and the German public have been the sex slave of Europe for far too long already (by paying and insuring the future of this whole Europe experiment). Angie should use a strap-on and give it to greece and Berlusconi....without lubrication!

HITMAN56's picture


kito's picture


Irish66's picture

End of quarter...must stay positive

Belarus's picture

Oh....that's why the machines are ramping the EUR/USD; it all makes perfect fucking sense! Go HFT's, because if you keep it up you will ruin even Benny's plans. 

Uncle Sam's picture

Who's to say the Central Banks don't have control over a significant number of HFT algos? That there isn't a coordinated effort to control world markets through massive HFT manipulation?

Isn't that why there has never been a government investigation of any HFT trading since it was first implemented? Because financial regulators don't have the "tools" to investigate HFT's? No regulator can hire a few math PhDs?


Ghordius's picture

dear Uncle Sam

don't get the propaganda to your head - ok, ok, "End the Fed", I'm fine with it but

the Central Banks are helpless without other goons doing the dirty work first

no Central Bank can, for example, just inflate like mad without the affiliated Treasury first printing bonds like there is no tomorrow.

and no Treasury can print big bonds volumes without having a gov deficit first

and no deficit money is wasted unless you buy a lot of crap like weapons and other idiotic things with it - hell, even just giving it to the citizens for free would not have a complete negative effect

and no Central Bank "controls the HFT algos", they are in the hands of the MegaBanks

Where is Central Bank idiocy? really low interest rates (ECB) and incredibly low interest rates (FED)

danger close here's picture

Up 2400% on my nflx 100 put, risked 2400$ on 10 contracts; profit of 24k.

Belarus's picture

Don't just be up on the paper trade: lock it in. 

danger close here's picture

Put in a order for 6 100oz silver bars just now.

HelluvaEngineer's picture

Awesome.  What's your home address again?

tmosley's picture

Well done.

I don't like paper, but it's nice to see some people accumulate real capital by doing what you are doing.

pasttense's picture

100 ounce bars are too big; get 10 ounce or less sized pieces (100 ounce bars are less liquid at small time local dealers; and are also worth counterfeiting).

Cassandra Syndrome's picture

Strange this blackswan of an FT roumour doesn't cause markets to tank....

Peter K's picture

If I said it once, I will say it a thousand times, Silvios problem is that his squeezes were young, good looking and paid for. Unlike our home grown bunga bunga bubba:)

YesWeKahn's picture

I just hope that those finance ministers have a degree in finance and know how to use a calculator.