ITALIA POVERA – POOR OL’ ITALY!

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Almost partly inhabitable – the house that is Italy?

Today I am very pleased to welcome Nic Mudie as a guest blogger. Nic has been living in Italy since the mid-nineties and is a keen follower of local and national politics as well as the Italian economy – and has a slight bent towards satire. So I was very interested in hearing – and sharing – his take on what the hell is going on in the country. This morning’s paper has reported that Berlusconi is on the verge of withdrawing his support of the government if Enrico Letta doesn’t revoke the property tax post haste. Thus I must get this report out to my readers before it becomes redundant! For the benefit of the uninitiated (including myself), I have added “translations” of some of Nic’s nick-names in parentheses. Let’s give Nic the floor!

Ok, where have we got to in the land of the lotus beaters – i.e.  makers of Ferraris?

Beppe Grillo (head of the Five Star Movement protest party that collected 25% of vote in election) had to be told, and he was, by me in Italian and English, that he was behaving like a dickhead and that even the soporific self-serving Italian electorate would recognise a poltroon when they saw one.

Consequently, he is losing weight in the polls and, this least Plautian, if not least  plausible, of comics  is allowing Burly Boy (Silvio Berlusconi) somewhere near the levers of power. The latter  is getting his garden gnome (Renato Brunetta) to push hard for his chairmanship of a commission that is  about to be set up to re-think a constitution that should have been consigned to the bin years ago. (Try this last remark on anyone in the nation that had Seneca but eschewed democracy for lunacy and you’d think you’d put cigarette ash in the butter).

Grillo won’t give anyone a vote of confidence – which we all know is only the ref’s whistle at kick off. This self-imposed principle is, as a matter of history, not worth a light – but mountebanks of his ilk are not those to let the effing facts destroy a good argument.

So, I will. Since 1945 Italy has had  65 governments – one lasted 9 days, two eleven and two the eternity that is twelve – so we can conclude that votes of confidence  in ‘das Land wo die Zitronen blumen’ (the country where lemons bloom) obviously carry the commitment of Don Giovanni on Viagra.

The electoral law that allowed the broad left with 25.9% of the vote (Burly’s + Burlesques took 25.4% but Grillo on his own 25%) to take 55% of the seats in the lower house has resulted in a government headed by a youngish left-leaning ex-Christian democrat (Letta)  looking for support from Burly and the rest. The main bone of contention at the moment is Burly’s promise to withdraw the property tax and Letta is tempted.

However, yet again, the facts are of no importance. The average family pays 140 Euros p.a. (somewhat less than two fill-ups of a nano-Fiat), but this brings in some 1.5 billion p.a. that’s going to go missing in a moment. Meanwhile, what we would call unemployment pay is running out and is likely to start costing the Italian government about 2 billion p.a. extra in about 4 nanoseconds.

This explains Letta’s precipitous visit to the Teutonic sphere – no, I don’t mean Auntie Angie (Angela Merkel), (t’was purely a dislocation of the digit squire, honest) followed by a mea culpa to two monuments to incompetence – one Roll out the Barrel (no idea….), whom I wouldn’t put in charge of a drunken orgy in the Douro – let alone a Portuguese Parish council, and Olli Reindeer (Olli Rehn, EU Commissioner for Economic Affairs) who, despite all evidence to the contrary, still thinks he ‘s a postilion to Father Christmas. These two luminaries have agreed to let Italy out of the Brussels’ observation room because it showed a primary surplus (more tax in than government spending out BEFORE interest payment on government debt) for two years running. Well done lads! Your reputation for ineffectiveness remains unsullied.

A) The observation room disgrace means not a light, as France and Germany were the first to break the Maastricht rules (3% annual deficit 60% total government debt as  %age of GDP) and remained unpunished, and…

B) Italy’s GDP is dropping like stone so the ratios get worse even with no extra spending and, remember, real interest rates are historically ridiculously low.

When the Japanese insurance companies inter alia stop buying European bonds and the European banks are completely stuffed, interest rates will go up and Italy will have to default. Government debt this year will be about 132%, to which you can add about half again in unpaid bills to suppliers.

I didn’t mention Rumpy Pumpy (Herman van Rompuy, EU Council President) because he’s not worth mentioning. As the Euro high priest he’s perfectly placed to dismiss science as not worth believing in when you’ve got religion.

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5 Comments

Filed under Beginnings, Endings, Italy, Politics

5 responses to “ITALIA POVERA – POOR OL’ ITALY!

  1. Raymond Gann

    You are very lucky to be able to employ hired guns like Nic.Hugely enjoyable. I guess Barrell is Barroso.

    • YES!!! Of course: Jose Manuel BARROSO, president of the EU Commission. Thanks for the enlightenment, Sunray. Or may I just call you Sunny? I do consider myself lucky to have been able to twist Nic’s arm and get him to write a post for this most modest blog. Watch out though, the time may come when your number is up! dch

  2. I entirely concur with your view that the sell by date of this jejeunest of régimes is probably shorter than a Ratner inspired prawn sandwich.

    The terrifying thing about Hannibal Letta’s crew is that the maths keep shifting. I’m now reliably informed this morning that total abolition of the property tax would create a relatively inconsequential 8 bn hole ( if you’e Burly Boy) in the budget. When I last wrote it was 1.2bn then last night’s telly gave 4bn. Do I see 10 in the corner? Yes you madam with the short green jacket . Going , Going , Andato! And also Andreotti . The devil wrest his sole achievement, which was to personify all that is lovely in the Italian polity.

    When the dust has settled, and if we get past June , then probably a new, no NEW, improved version of the property tax will appear to make it marginally more progressive. You know the kind of thing. Little old lady in mansion gets single person income related discount.

    The other little number to keep an eye on is the proposed increase in value added tax from 21 to 22%. For the fiscally fixated among you this particular lavatory wall has already come out in paperback . CF Nic mudie Economist in Google ‘ Who will be Italy’s next prime minister’ Oct 13th 2012. This has been built in to this year’s budget and probably will not happen. So the dosh coming in looks thinner by the day but the as yet not really heavy demand for unmployement pay has not hit the extractor. The reason is dead simple if excremental by our standards. I can do no better than quote my finest sparring partner one Milovan Djilas:

    There are no real unemployment benefits in Italy. What we have is a very active Temporary Lay-Off Fund for those who HAVE jobs. Those without a job, the chronically unemployed, get nothing.
    Total expense for the Cassa Integrazione last year was around 4 billion – 0.25% of gdp at a moment when our unemployment is at the highest level in almost 20 years.

    The only thing to add is what he means by ‘HAVE jobs’ is permanent jobs; not the the plethora of proletariat lumpen,or otherwise, stuck in ‘precarious’ twice renewable 6 month contracts.

    I’m following AfD and they look interesting since the efforts to besmirch them as a racist rabble don’t really hold water and they might just give your FDP a run for their Duro. Meanwhile the state of Mediteranean Europe in which I include France seems to be bringing some fairly unsavoury chaps out of the sewer. The sort that most of us would not have to dinner. Just in case something goes wrong for the sons of Aeneas set this one to either Rossini or Sullivan. Their music is really almost of the same order but Gilbert’s lyrics are in a different league – mine are but a pale imitation.
    Povera Italia

    Povera Italia’s not really in Club Med
    We need brace of colonels to tuck us up in bed.
    Post war Portugal was ruined by Salazar
    And Spain had general Franco in el alcazar.
    Les frogs ont eu putain ! Pètain and Gen de Gaulle
    A bloody bunch of Balkans were marshalled by Tito.
    The Greeks had hoi colonels who couldn’t bear to go
    And Turkey’s still not sure if the army’s gone at all.

    The Gippos had Col. Nasser and dam it all! Aswan
    The Libyans Col. Ghadaffi and the folks all cheered as one.
    Harkis, pieds noirs, Touaregs and dhobi wallahs all
    Had to lift the yoke, no joke, but helped by Gen. de Gaulle.
    So poor Italy’s not really in club Med.
    We haven’t had the colonels to tuck us up in bed.

    Garibaldi took the biscuit splitting Africa in two
    But the politicos we got made Zimbabwe look well run.
    We’ve got soldiers dressed as coppers to guard our constitution.
    Mezzanotte’s struck, here’s hoping that that knocking is by the boys in blue.

    The fool on the hill

  3. Toerags in Togas
    In the course of at least one hundred years of assiduously lifting every flat stone and emptying every sewer Italy, has found lots of politicians but never a statesman. Nature abhors a vacuum so an even more dangerous caste actually wields the power – but of course being self- elected and able to drift in and out of politics the better to refurbish its armoury of vile ineffectiveness its governance just hinders but in no way helps the honest citizen . Signore , Signori in the dock I give you the magistrates.

    Charge1) Italy has the lowest level of foreign direct investment in the EU as the result of a legal system that can take 10 yrs to resolve civil disputes. Ten years is way beyond most companies’ investment horizons. This is pretty frightening when the remaining multinationals, including our own FIAT, who elsewhere absorb graduate output and give them modern management skills, are all making for the exit. It’s equally symptomatic that the FMC’s sold in Italy’s supermarkets can be the likes of Colgate Palmolive products made in dysfunctional Greece of all places – rather than here. A halfway efficient legal system would probably add at least 2% to GDP per annum.

    Charge 2) You may remember a bent brief called Mills – bejowelled and for political convenience no longer officially connected to the Blair Babe Tessa. He organised the ring of offshore Co’s to take the profits from a nice little transfer pricing operation for films shown on Burly Boy’s TV stations. This all came to light before 2000. Despite losing the second appeal which carries a 4 year sentence ( no jail as he might be Bunga 80 but he’s over 70) and more importantly a 5 yr ban on any public office he’s still at large ‘cos there’s still another hoop; the cassation court. Now in his anxiety to get back to Bunga 10 Clowning St. he has succeeded in getting one of his placemen on the all important parliamentary judicial committee. So we shall see. Break out the sick bags

    Charge 3 ) Two nights ago in Geneva the Joly Nero ran into the control tower killing a number of operatives . Instead of keeping quiet and letting the technical experts decide what went wrong these bewigged botchers who know even less about fluid dynamics than most dipsomaniacs and, unlike them, probably can’t tell port from starboard are flying around like headless chickens bringing charges that range from culpable homicide to sabotage via sedition. This from the rabble that hasn’t yet managed a proper trial for the doughty captain who ran his ship aground on Giglio and left the hapless passengers and heroic ( no sarcasm at all, they were unsung) domestic staff to get on with it.

    Charge 4 ) If you thought they were a tad tardy in the Burly Boy case – and indeed one of his idiotic supporters thought that yesterday’s 3rd trial was brought in indecent haste – try this one. Yesterday a self confessed killer of his girlfriend and father of her one month baby walked free after 12 months because our togaed toerags couldn’t find five minutes in 365 days to set a date for his trial

    No wonder Beethoven changed his dedication in the Eroica. The ghastly little corporal from Corsica in playing soldiers not only killed one in five Frenchmen born between 1790 and 1795 but tried his hand at the law and left us this mess upon which the Italian black vultures have shat most copiously. The only good thing is that by their own rules , they, like everyone else, are guilty till proved innocent. I do not rest my case.

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