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.