"Once A Liar, Always A Liar": The Incredible (Un)Truth About Italy, Greece, And The Birth Of The Euro

Tyler Durden's picture

The must read article from Spiegel.de:

Operation Self-Deceit: New Documents Shine Light on Euro Birth Defects
By Sven Böll, Christian Reiermann, Michael Sauga and Klaus Wiegrefe
Newly revealed German government documents reveal that many in Helmut Kohl's Chancellery had deep doubts about a European common currency when it was introduced in 1998. First and foremost, experts pointed to Italy as being the euro's weak link. The early shortcomings have yet to be corrected.


Many of the euro's problems can be traced to its birth defects. For political reasons, countries were included that weren't ready at the time. Furthermore, a common currency cannot survive on the long term if it is not backed by a political union. Even as the euro was being born, many experts warned that currency union members didn't belong together.

Pushing Ahead Regardless

But it wasn't just the experts. Documents from the Kohl administration, kept confidential until now, indicate that the euro's founding fathers were well aware of its deficits. And that they pushed ahead with the project regardless.


In response to a request by SPIEGEL, the German government has, for the first time, released hundreds of pages of documents from 1994 to 1998 on the introduction of the euro and the inclusion of Italy in the euro zone. They include reports from the German embassy in Rome, internal government memos and letters, and hand-written minutes of the chancellor's meetings.


The documents prove what was only assumed until now: Italy should never have been accepted into the common currency zone. The decision to invite Rome to join was based almost exclusively on political considerations at the expense of economic criteria. It also created a precedent for a much bigger mistake two years later, namely Greece's acceptance into the euro zone.




Of course, financial data doesn't play much of a role when it comes to war and peace. Italy became a perfect example of the steadfast belief of politicians that economic development would eventually conform to the visions of national leaders.


However, the Kohl administration cannot plead ignorance. In fact, the documents show that it was extremely well informed about the state of Italy's finances. Many austerity measures were merely window dressing -- either they were accounting tricks or were immediately dialed back when the political pressure subsided. It was a paradoxical situation. While Kohl pushed through the common currency against all resistance, his experts essentially confirmed the assessment of Gerhard Schröder, the center-left Social Democratic Party (SPD) candidate for the Chancellery at the time. Schröder called the euro a "sickly premature baby."

A Miraculous Cure

Operation "self-deception" began in December 1991, in an office building in the Dutch city of Maastricht, the capital of the southeastern province of Limburg. The European heads of state and government had come together to reach the decision of the century, namely to introduce the euro by 1999.




As luck would have it, Italy fulfilled all requirements as the date approached -- surprisingly so, given that it had acquired a reputation for notoriously imbalanced budgets. But the country had undergone a miraculous cure -- on paper at least.




A few months later Jürgen Stark, a state secretary in the German Finance Ministry, reported that the governments of Italy and Belgium had "exerted pressure on their central bank heads, contrary to the promised independence of the central banks." The top bankers were apparently supposed to ensure that the EMI's inspectors would "not take such a critical approach" to the debt levels of the two countries. In early 1998, the Italian treasury published such positive figures on the country's financial development that even a spokesman for the treasury described them as "astonishing."

Snail's Pace

In Maastricht, Kohl and other European leaders had agreed that the total debt of a euro candidate could be no more than 60 percent of its annual economic output, "unless the ratio is declining sufficiently and is rapidly approaching the reference value."


But Italy's debt level was twice that amount, and the country was only approaching the reference value at a snail's pace. Between 1994 and 1997, its debt ratio declined by all of three percentage points.


"A debt level of 120 percent meant that this convergence criterion could not be satisfied," says Stark today. "But the politically relevant question was: Can founding members of the European Economic Community be left out?"


Government experts had known the answer for a long time. "Until well into 1997, we at the Finance Ministry did not believe that Italy would be able to satisfy the convergence criteria," says Klaus Regling, at the time, the Director-General for European and International Financial Relations at the Finance Ministry. Currently, Regling is the chief executive of the temporary euro bailout fund, the European Financial Stability Facility (EFSF).


The skepticism is reflected in the documents. On Feb. 3, 1997, the German Finance Ministry noted that in Rome "important structural cost-saving measures were almost completely omitted, out of consideration for the social consensus." On April 22, speaker's notes for the chancellor stated that there was "almost no chance" that "Italy will fulfill the criteria." On June 5, the economics department of the Chancellery reported that Italy's growth outlook was "moderate" and that progress on consolidation was "overrated."



'Not Without the Italians'

Horst Köhler wrote to the chancellor in mid-March. Formerly the German chief negotiator in the Maastricht Treaty negotiations, Köhler had moved on to become the president of the German Savings Bank Association. Enclosed with his letter was a study by the Hamburg Institute of International Economics, which concluded that Italy had not fulfilled the conditions "for permanent and sustainable deficit and debt reduction," and that it posed "a special risk" to the euro.




At a European Union special summit in Brussels in early May 1998, Kohl felt the "weight of history" and, without further ado, provided his unreserved support. "Not without the Italians, please. That was the political motto," says Joachim Bitterlich, Kohl's foreign policy advisor.




The head of the economics division at the Chancellery, Sighart Nehring, noted in mid-March 1998 that "enormous risks" were associated with Italy's "high debt levels." The debt structure, Nehring added, was "unfavorable" and outlays would increase considerably if interest rates rose by only a small amount.

A Love for Italy

But the memo had no repercussions. The chancellor, it would seem, wasn't terribly interested in the details. There was a "built-in flexibility" among politicians when it came to the Maastricht criteria," says Dieter Kastrup, German ambassador to Italy at the time.


Italy, after all, was a founding member of the EU.



Tricks and Luck



In the end, the Italians formally fulfilled the Maastricht criteria with a combination of tricks and fortunate circumstances. The country benefited from historically low interest rates, and Ciampi proved to be a creative financial juggler. He introduced, for example, a "Europe tax" and carried out a clever accounting trick, which involved selling national gold reserves to the central bank and imposing a tax on the profits. The budget deficit shrank accordingly. Even though EU statisticians ultimately did not acknowledge this trickery, it symbolized the fundamental Italian problem: The budget was not structurally balanced, but in fact had benefited from special effects.




The general secretary of the Dutch prime minister and a state secretary from the finance ministry wanted to put pressure on Rome. "Without additional measures on the part of Italy to provide credible proof of the longevity of the consolidation, Italy's acceptance into the euro zone is currently unacceptable," the Dutch officials argued.

Germany's Growing Debt

Kohl, fearing for his most important project since German reunification, refused. He told the Dutch officials that the government in Paris had warned him that France would withdraw from the agreement if Italy were excluded.


The Germans were in a weak negotiating position.




The Chancellery was aware of the problem. "In contrast to Belgium and Italy, the German debt level has risen since 1994," they wrote in a March 24, 1998 memo to Kohl and Chief of Staff Friedrich Bohl. The consequences were unpleasant. "In our view, there is a legal problem in Germany's case, because the Maastricht Treaty only provides for an exception if the debt level is declining," the memo continues.




Still, the situation made it difficult for Germany to play judge, particularly given the lack of formal proof that Italy was in violation. In the spring of 1998, the statistical office of the European Union certified that the Italians had satisfied the deficit criteria of the Maastricht Treaty. This meant that there was "no longer any reason to bar the Italians accession to the euro," as Waigel recalls. After this hurdle had been removed for the Italians, "they had a sort of legal claim to be allowed to be part of the euro from the very beginning," Waigel's former top official Regling says today.


Italy Turns Away from Austerity

Many knew that the figures were sugarcoated, and that they hardly represented real debt reduction. But no one dared draw the consequences. Kohl trusted Ciampi's reassuring claims that the Italians would continue to pursue the "cammino virtuoso" ("virtuous path") they had embarked upon and would "be unrelenting in efforts to clean up the budget." The government in Rome predicted that its debt level would sink to 60 percent of GDP by no later than 2010.


Things didn't turn out that way. As early as April 1998 -- that is, prior to the official decision on which countries would be part of the euro -- there were growing indications that Prodi's coalition partners, the neo-communists, were just waiting to return to their old habits. On April 3, the German embassy in Rome warned that this risk should "not be ignored."



'A Qualitative Shift'



This didn't change after the election, either, no matter how many alarming messages Financial Attaché Stenglin sent to Bonn. On Oct. 1, he submitted a blunt analysis of the Italian fiscal policy, which he hid behind the harmless subject line "Italian Government Approves Draft for the 1999 Budget." Stenglin, who had been sent to Rome from his position at the Bundesbank, saw that the development in Italy was moving completely in the wrong direction. The Italian government's draft budget, he reported to Bonn, signified a "qualitative shift in budget policy."


According to Stenglin, the budget showed the lowest cost-cutting figures since the beginning of the consolidation course in the early 1990s. Additional tax revenues, he noted, would no longer be used solely to reduce the deficit, but also to pay for new spending, particularly on social programs.




When Prodi was replaced a short time later by former Communist Massimo d'Alema, the situation deteriorated even further. D'Alema proposed financing a European economic stimulus program through euro bonds and not factoring the associated expenditures into the national deficits.



The Maelstrom of Crisis

 A few weeks before the launch of the common European currency, Stenglin's assessment of the situation took on a dramatic undertone, when he wrote: "The question arises as to whether a country with an extremely high debt ratio doesn't risk gambling away the success of its consolidation efforts to date, thereby harming not only itself, but also the monetary union." It was a prophetic remark. In the fall of 2011, when the country was pulled into the maelstrom of the crisis, the debt ratio had risen above 120 percent of GDP once again.




Meanwhile, European leaders are trying to correct the defects of the founding phase of the euro. Austerity and reform measures are being implemented in large parts of Europe, and all countries support the idea of joint responsibility for the currency. Nevertheless, the new euro architecture doesn't differ all that much from the old one.



No Solution Yet

The government files from the founding phase of the monetary union reveal that this construct cannot function. The message the documents convey is that political opportunism will ultimately prevail. A monetary union amounts to more than shifting several billion euros back and forth. It is also a community of fate. Shared money requires shared policy and, in the end, shared institutions.


The euro is now in its 14th year, and after two years of ongoing crisis, there is a growing realization in Berlin and other capitals that the status quo cannot continue. All reform efforts still resemble small steps to nowhere, and yet politicians are beginning to think in terms of broader categories as they cope with the crisis.




All of these measures boil down to individual countries relinquishing more authority and the central government in Brussels acquiring more power in return.



Incredible! And yet investors and the media hang on every word from these self-deceiving political grab-baggers. Perhaps, just perhaps, the recent elections is the beginning of a slow realization by the public that they truly have been duped from the very beginning.

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l1b3rty's picture

There are dozens of countries in the Orwellian Eurozone that did not have the proper superstructure to unite with Germany and France, et cetera.  The entire Eurozone project is a farce perpetrated by illuminist internationalists seeking a homogenized, single system across the planet, a fusion of the soviet system and the western social-democracies, with no regard for culture or individuals, but only further control. Their house of cards must burn and their fiat deception must go extinct.

But, until then, we are in for it now as the world will bear witness to the propagandists up-on-high changing the war from Eurasia to Oceania to it-just-simply-doesn't-make-a-difference-anymore (it seems each week the fraud of Euro eligibility redirects its scopes from one country to the next) for, at the top, its all one - the total state-enterprise apparatus munches on the natural world and leaves behind a mechanical wasteland until civilization gets some real money instead of bank-turds of Fed Notes.


r00t61's picture

Whoa...politicians playing politics?  Throwing math to the winds for expediency?  Lying through their teeth at every turn?  Whocouldanode?

"I'm shocked, shocked to find gambling going on in here."

clones2's picture

They never saw it coming...

markmotive's picture

This is not a crisis of the EU. This is a crisis of civilization.

We cannot survive by repeating the status quo.


GetZeeGold's picture



We cannot survive by repeating the status quo. 


Liar! Get ahold of yourself. Listen to me man....we can AND WILL!!!




Manthong's picture

Omigosh.. They were lying and committing fraud all along!

Well, knock me over with a feather..   Golly gee whiz.

                   There should be a price to be paid for all of that.

4realmoney's picture

Everyone is saying "don't buy gold" but what else are you going to do with your money? This is a replay of 2008. The dominoes are falling, and it starts with Europe and will bleed over to the states. Deflation is coming. I'm with Richard Russell, I don't care if Gold is $1000/oz or $10,000/oz. What matters is what you can buy with it. I'm not keeping money in the banks.

Premiums are lower than they've been, but that will change when rush comes, and so will supply. Lots of good dealers, Tulving, Gainesville, Texas Precious Metals. TexMetals has a deal going on Gold Eagles for spot + $54, free shipping. https://www.texmetals.com/american-gold-eagle-coin-backdated.html

The situation is getting serious. Sheeple need to wake up!

Davalicious's picture

You can't trust banks following the re-hypothecation and MF global scandals. They are going to be wiped out in the event that Europe crashes.

Right, PMs will drop when people (a) sell them to cover margins (b) opportunistically make money on shorting them, knowing that JP Morgan backs this play (c) governments arrange for PMs to drop to stop people stampeding for the exits. So the price will drop. As you say, what else are you going to do with your Fiat money? In the short term you will lose. But there is a chance that your cash will be totally wiped out.

If the powers that be manage to keep things together. They must eventually inflate currencies. In the medium and long term PMs will increase in value.

That is my view. Firstly, that you are hedging against a fiat extinction event and, secondly, that PMs are a good longer term investment.

You can't time the markets, or guarantee that you will be able to get into PMs later, at a lower level. Paper precious metals may fall while the physical market disconnects. I am buying into PMs as they drop. I just wish that gold would drop a bit more!

Peter Pan's picture

In the case of a meltdown I doubt people will sell their precious metals to meet margin calls. I think they will actually hide them from view so that they may use them as back up for whatever else may arise. Precious metals will be the only assets that are both not tied down AND not dependent on paperwork for value.

Davalicious's picture

Sorry, I should have been specific and said I meant that people would sell their paper PM positions to make up margin. This will happen to them involuntarily if they get a margin squeeze anyway.

I agree that it would be silly to go out and sell your physical silver to push into falling equities markets.

machineh's picture

The old 'false alternatives' close: silver or equities?

As recently as yesterday, selling silver for FRNs would have been unsilly. Then one could have bought back more silver.

StychoKiller's picture

Latest article on the GoldenJackass site indicates another Au cartel member is being sucked dry (of its Au!) by China and friends.  How many are on the hit list?

jmcaule4's picture

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q99x2's picture

A late night thought.

Maybe. I was listening to KFI news in LA tonight and even they were anouncing that the recent underwear bomber was a CIA operative. There was also similar concerns aired on other mainstream media about the patsy speed freak kids and the bridge. Then there is RP and the delegates.

Might this be a setup against the FEDeral reserve and big banks by the CIA? In other words, the operations are turning the attention of the general public against the ruling Elites because the public generally assume the CIA is controlled by the banksters. Same thing in Europe.

A take down of the elite banking families by the military intelligence agencies.

Davalicious's picture

"A take down of the elite banking families by the military intelligence agencies."

That is something to hope for. Jooz are at the top of these agencies, and pulling the strings, but the majority of people in military, and civilian, intelligence agencies are not aligned to the elite. Many of them must be aware of what is happening. Together they may be able to wrestle control away from the zionists.

Advoc8tr's picture

I'm not so sure a military dictatorship would be 'better'? Especially when it is big enough to take on the rest of the world.  Careful what you wish for. It may just be wishful thinking that the key people in the military intelligence agencies are well intentioned.

MrNude's picture

One bunch of nutters trying to overthrow another bunch of nutters.


The miltary brass are probably getting squeaky bums over Iran, they know it is suicide. Even the gung ho harries realise there is no coming back from that one.

Dick Darlington's picture

Political utopia, nothing more, nothing less. The precious utopia endorsed by the eurofanatics has turned into dystopia with horrible consequences and i believe we've really seen nothing yet. The worst is still to come. Yet the unelected in Brussels and the fanatics in every country refuse to admit their grave mistakes and are pushing more of the same instead. It's time for change and unraveling the euro must happen.

agent default's picture

Go buy the dip in silver and fuck it.  Just do it, it will make sense later.

williambanzai7's picture

What is not mentioned is how the few who said this is a sham were put to ridicule and thrown out on their asses for not caving into a state of self delusion.

MrNude's picture

Indeed, those written of as conspiracy theorists and tin foil hat wearers at the time end up being proven right a decade later. While the snake oil salesmen who sold the great lie are slinking off into the shadows as the whole thing collapses.

williambanzai7's picture

A familiar pattern called normalcy.

Joe The Plumber's picture

The worst is yet to come. They have yet to go full retard.

Greece should give them an opportunity.

History first repeats as a tragedy. Then repeats again as a farce

Joe A's picture

Is it a coincidence that these documents are released now? Just like that, because Der Spiegel requested it? Is this part of a prelude of Germany leaving the Euro?

machineh's picture

Good thinking, Joe! 

If this Spiegel article stirs up enough outrage in Germany, it strengthens the hand of advocates for the Deutschemark.

dinastar2's picture

As an italian, I must say it was a terrible mistake to enter the Euro, we had a very strong industrial.exporting in the northern half of Italy, even better than Germany, and with the Euro we have been choked to death because of the stupid rate of exchange with the US $.

Our exchange rate Lira-Euro was extremely low, 1927 lira for one euro, when we expected 1,550.Thjis exchange rate was reflecting the true nature of our public finance, so your argument about the political sugarcoating of Kohl and the italian accounting tricks evaporates. We were severely punished by the Euro-lira exchange rate at the start in 2002.

Since then every italian government has increased the state spending regardless of the loss in productivity and the loss in competitivity, because of mere electoralist emergencies ( to please their voters and to keep their seats and the gravy train going along ).

So Euro is doomed , a little bit from the start, but mainly out of the reckless past 10 years of excessive public spending .I look for the Euro to split in two separate currencies in 2013.Euromark ( Germany Netherlands Finland Luxemburg ) and the rest ( France.Italy-Spain-Austria -Portugal-Greece ).If the federal Reserve refrain from QE 3 , then the Euro will go down to 1,20 $/ 1 euro this summer.


tim73's picture

Easy to blame euro when in reality you cannot just compete, regardless of currency exchange rate. Asian countries could still outbid your offers easily in manufacturing. Or you have to cut your wages by about 70 percent while your costs stay the same by devaluation.

falak pema's picture

I think the first world has to reassess its global competitive paradigm based on "international slave labour arbitrage à la Foxconn". 

Do you really sincerely feel this is the competitive Ricardian model of tomorrow; where the West is run by Oligarchy empire that outsources its "R&d/design/market/finance" elitist home construct, to hardware slave labour based Oligarchy surrogates and ensures all the while the "RM/commodity extractive empires", that have their buying centres in Caymans, thru closed-shop financial corpocracies also in Caymans? Like the Oil-Seven sisters and the MIC/CIA/world security corp legacy, they will continue in FUTURE to dictate the global flow of geo-strategic events, inspite of the 2008 crash, signal of capital market deflagration and global dystopia at the very heart of the system... Its the death of democracy at home and guaranteed debt serfdom to US/Euro zone citizens; aka Greece today.

This model is totally screwed in financialised disease to its crown jewelled intimate short hairs and now pollutes the mind sets of the developing world. Witness the Exxon Play in Kurdistan that will pour oil on the Baghdad/ Kurd divide around the Irak Oil patch. Does the world need this Oligarchy power play to further twist the already deadly situation in IRan/Syria/Israel standoff; all around this vital commodity lifeline war, so vital to the west?

Don't let the EURO disease, precurser like Japan today since 1990s, of system failure on global level of PAx Americana construct, distract your vision from the fundamental debate. We cannot continue along this route. A major reset is inevitable. The only questions are when and at what price to world community? Secondary issue : who comes out on top; obviously primary issue to Oligarchs but not to the 99%.

Davalicious's picture

I have a factory in India. People love Italian tools and machinery here. The stuff we get from China drops in quality every year. It is really hopeless. But Italian goods have an excellent repuation. The price is very good considering the quality.

I had no idea that Italian goods were of such high quality until I came here from Europe. I'd not bothered with them before. So I would say that the Italians can compete globally.

machineh's picture

Probably you are speaking of Italian textile machinery, a technology in which Italy indeed is a global leader. But in a different industry (metals finishing), I've seen China blow away Japan in quality and price.

Italy competes globally in certain specialty industries, most of them situated in the Torino-Milano-Veneto axis. Collectively, though, Italy trails Germany in productivity.

GeneMarchbanks's picture

If by 'productivity' you mean 'meaningless hyperactivity resembling slavery a little too closely' then yes.

The German people are no role model for anyone, especially in Europe.

Sandmann's picture

Ridiculous comment Gene. I have worked on the shopfloor of German engineering companies and in the boardroom. Germans work shorter hours than Japanese or Americans, they simply work morev effectively and are concentrated. German manufacturing systems are excellent and the workplace functions unlike the UK. German companies focus on high value-added products from a technically well-trained workforce which is the difference. I think terms like slavery are completely wacko. Many of those workers achieving high productivity are Turkish or Polish - especially in car factories.

GeneMarchbanks's picture

No question is more confused, in France, than the question of work. No relation is more disfigured than the one between the French and work. Go to Andalusia, to Algeria, to Naples. They despise work, profoundly. Go to Germany, to the United States, to Japan. They revere work. Things are changing, it’s true. There are plenty of otaku in Japan, frohe Arbeitslose in Germany and workaholics in Andalusia. But for the time being these are only curiosities. In France, we get down on all fours to climb the ladders of hierarchy, but privately flatter ourselves that we don’t really give a shit. We stay at work until ten o’clock in the evening when we’re swamped, but we’ve never had any scruples about stealing office supplies here and there, or carting off the inventory in order to resell it later. We hate bosses, but we want to be employed at any cost. To have a job is an honor, yet working is a sign of servility. --Coming Insurrection

Not my point Sandmann. Germans are not slaves in that sense. They have, however, come be the Gold standard of what the political economy wants from all Europeans under this horrendous new religion. You can believe as you please, but I can't say the current German construct is a 'free' one. 

Sandmann's picture

Actually Gene the Germans fear the Anglo-Saxon way of working - the de-skilling and hire and fire. They fear "McJobs" with low wages and insecurity - and have them - the 1 Euro Hartz IV Jobs.  Germany is not a pleasant society because of alien concepts such as "Shareholder Value" which means Boardroom Gluttony and Shopfloor Starvation. They have seen how it worked at Karstadt-Quelle with Sal Oppenheim and the Great Middelhoff Swindle.

Germans LIKE the fact they make PRODUCTS - they are simply terrified of becoming like Americans or British and being turned into Commidities to be traded and discarded as Marx predicted. That is why they loathe Private Equity Heuschrecken who destroy traditional German quality by using Chinese production under German names.

Germany may be a Gold Standard - it has more family-owned businesses than anywhere else in Europe - Britain has the fewest. Germany is full of technically-drive family-owned businesses - such as the Machine-Tool Industry or food production like Dr Oetker.

GeneMarchbanks's picture

'Actually Gene the Germans fear the Anglo-Saxon way of working - the de-skilling and hire and fire. They fear "McJobs" with low wages and insecurity - and have them - the 1 Euro Hartz IV Jobs.'

I sense that as well. The question is: can they offset the villianization coming from the anglo-media with some kind of political maneuvering? I don't see it. Will financialisation such them in like the rest? I can't say but the time is ripe for someone to stand their ground.

Cathartes Aura's picture

replying to your excellent quote "down here" Gene, so as not to get in the middle of a good exchange. . .

[...]In France, we get down on all fours to climb the ladders of hierarchy, but privately flatter ourselves that we don’t really give a shit. We stay at work until ten o’clock in the evening when we’re swamped, but we’ve never had any scruples about stealing office supplies here and there, or carting off the inventory in order to resell it later. We hate bosses, but we want to be employed at any cost. To have a job is an honor, yet working is a sign of servility. --Coming Insurrection

these words make me smirk in acknowledgement - as someone who was raised in the heart of capital-chasing amrka, with employee turnover as people chased the paper monies, then moved to the UK & Europe in early "working productive" years - THIS is the attitude towards having a jawb that I ran into time and again. . .

my own outcome was the deep repulsion of being anyone's employee, a desire to be free of petty dictators, and their jobsworths, a love of self-reliance. . . I've seen the bitterness and duplicity inherent (for some) in being employed in a hire- archy. . . I'd much rather work within a group of like-minded similars, or alone.

shovelhead's picture

Luciano Bosis does a pretty nice job in the metal finishing department.




Peter Pan's picture

Italy's mistake was that the productive northern part of Italy should have broken away from the unproductive and corrupt southern part before joing the Euro.

falak pema's picture

You want to resuscitate the Papal/ Emperor wars pre-Garibaldi in Italy, on a feudal city state basis?

Just read history, after a thousand years of being rich, divided and battleground for Empires and Popes, after the French/Imperial wars of 1500s, the Italian city states were SCREWED economically.

WHY? 'Cos the nation states of Europe having emerged, fighting industrial wars using cannons and muskets, on land and SEA, could no longer be FINANCED by city republics like Venice and Florence. It needed MASSIVE economies of scale that ONLY a nation state could provide, like France and Spain/Hapsburg Empire. Mechanised Wars had become TOO expensive relative to good ole feudal crusader days. Also, Turkey was now a rival Empire and the future economic and political growth lay in the Conquest of West and far-off lands like India. So the Mediterranean region became marginalised and Antwerp/Amsterdam became the hub of the Atlantic age.

Whence Garibaldi's post-industrial knee jerk to play catch up ball with northern Europe. 

And now you would like Italy to go back to those pre-Garibaldi days where southern Italy would just die and fester like a cancer on Europe's toe? Dangerous social play making Europe permanently part of THIRD WORLD. I would like to remind you the Berlin Wall came down in 1989 precisely to bring third world Sovietised Eastern Europe back into first world...

So the Europeans have every reason to be concerned about social construct in their own southern continental regions; if they don't want to hear the bells of regression toll for the whole continent, North and South! There are no frontiers in Europe. The Huns taught us that and now the German forrests have disappeared. Its autobahn all the way to Hamburg and to Vladivostock! Shoot, we are in the Internet age! And skin of colour is like chocolate cake! 


falak pema's picture

This whole Euro history brings to the forefront the issue of FEDERATION. If we follow the example of American History, the US FIRST federated and built up a interstate political/legal/social construct that was integrated BEFORE building a financial and FISCAL construct that allowed the same money to circulate between say New Jersey and Louisiana; one being an industrial Northern state construct, the other being an agrarian Southern state construct. 

The Euro deal went from Common Market to Common Money without going through Common political (defense/foreign policy/legal), social (Salary/Salary burden/medicare) and FISCAL federation.

You cannot have a common money without the intermediate step FIRST.

Now the nation states are paying the price for this cart before horse "short cut" integration on monetary front. 

And now time has run out for retro-fixing. And the BAby of European continental integration as a stable political/cultural federation in a Global world can be lost with the bath water of a phoney monetary construct. 

Sandmann's picture

You can only trust in NATIONALISED Banks because they are the last line

Ben Bermonkey's picture

Read the books of legendary Bruno Bandulet, he knew 10 years ago and wrote about this!

Rock the Casbah's picture

This is why everything must be privatized - education, highways, student loans and yes, the capital markets - even if it means creating monopolies.

Politicians will never be able to replace stockholders.

Advoc8tr's picture

widespread private ownership of everything only works when the ownership is .. wide spread. If we jumped to that model now a handful of oligarchs would own everything - I.e same as right now but without the illusion of freedom and democracy. 

riphowardkatz's picture

and yahoo and google and linux and facebook and pinterest and ibm and apple and ford and GM. and united and soutwest ...no precedent your making stuff up. the only time there is oligarchs is when they are installed by governments

Bahamas's picture

Italian business owners committing suicide every day