Mark Weisbrot — The Deep Economic Roots of Italy’s Political Troubles

In one important sense there are similarities between the rise of Trump and the fall of Renzi. Both are the result of the long-term failure of neoliberal policies implemented by the major political actors. In both cases, the center-left lost a big part of its working and middle-class base because it was jointly responsible for this failure.

In the US, the neoliberal era was launched “big league” by Ronald Reagan, but Bill Clinton became a co-owner by bringing us NAFTA, the WTO, financial deregulation, and other neoliberal structural reforms that have done permanent damage.

In Italy there have also been neoliberal reforms since the 1980s, but the most devastating was adopting the euro in 1999. Now you might think that nothing could be worse than having to say the words “President Trump,” but adopting the euro put Italians in an even worse jam. They lost control over their most important macroeconomic policies (monetary, fiscal, and exchange rate), and gave it to some really wrong people in the European Commission, the European Central Bank (ECB), the Eurogroup of Finance Ministers, and the IMF.

Counterpunch

The Deep Economic Roots of Italy’s Political Troubles

Mark Weisbrot

Stratfor — Italy After the Referendum. What comes next?

Stratfor analysis.

Fabius Maximus
Stratfor: Italy After the Referendum. What comes next?

Domenico Viola — Italy is Hungry for Expansionary Fiscal Policy

In a meeting with Angela Merkel and Francois Hollande on August 22, the Italian President Matteo Renzi proudly announced that Italy has the lowest public deficit of the last 10 years, and will continue with structural reforms to reduce it further. Monti has long aimed to “restore credibility” by cutting the public deficit, and now enjoys praise on his achievement of a deficit as small as 2.4% of GDP. The FED (Financial and Economic Document) goes so far as say this makes Italy “among the most virtuous countries in the Eurozone.”

A closer look at Italy’s economy, however, shows this “virtuosity” has no basis in reality. In 2015, 1.5 million households lived in absolute poverty. Another 4.5 million individuals saw stagnant incomes. The situation has not been this bad since 2005. It is clear that Italy is stuck in a deep depression. And it’s not alone. Many other euro countries are suffering the same fate. Cutting public spending cannot help them recover. We turn to Keynes to see why it cannot, and consult the work of Minsky and Wynne Godley to see what can.

The Minskys
Italy is Hungry for Expansionary Fiscal Policy
Domenico Viola, UMKC

Dan Steinbock — Italy at the Brink: From Renzi’s Referendum to Italexit?

The next shoe to drop?

EconoMonitor
Italy at the Brink: From Renzi’s Referendum to Italexit?
Dan Steinbock

Tom Winter — Erdogan attacks in all directions: US, EU, Italy...

Turkey is a geopolitical pivot point. Feeling betrayed, the president of Turkey can say what he wants to. Erdogan is on the warpath.

Fort Russ
Erdogan attacks in all directions: US, EU, Italy...
Tom Winter

Alex Christoforou — More EU Trouble. Deutsche Bank Chief Economist Wants €150 Billion Bailout For EU Banks

Systemic risk.

Italy’s Prime Minister, Matteo Renzi, fired shots at Germany’s financial EU hegemony when, during a joint news conference with Swedish Prime Minister Stefan Lofven, said:

“If this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to one hundred.”

Renzi was referring to the massive, trillions of derivatives Deutsche Bank is carrying on its books. According to Renzi, Italy may have issues, but “other” European banks have much bigger problems.…

The Duran
More EU Trouble. Deutsche Bank Chief Economist Wants €150 Billion Bailout For EU Banks
Alex Christoforou

Bill Mitchell — Italian government is walking into the trap it set itself

On September 19, 2015, the Italian Prime Minister, Matteo Renzi and the Minister of the Economy and Finance, Pier Carlo Padoan presented to the Italian cabinet (Consiglio dei Ministri) an updated fiscal (‘budget’) document – Nota di Aggiornamento del Documento di Economia e Finanza 2015 – which has received widespread attention in the media. The response to the update can be summarised in two statements: (a) the Italian government is abandoning austerity in the coming year and running an expansionary fiscal policy; and (b) the European Commission through the Ecofin (Committee of Finance Ministers) is showing admirable flexibility in allowing the Italian government to ‘relax’ their previous fiscal adjustment plan in order to safeguard economic growth. However, some commentators have challenged the notion that the September changes are indeed expansionary, pointing out that the fiscal deficit projected for 2016 might be higher than the earlier projections but is still smaller than the 2015 outcome. What should we make of all that? Well, neither assessment conveys what is actually happening.…

Bill Mitchell – billy blog
Italian government is walking into the trap it set itself
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Yanis Varoufakis — Schäuble’s Gathering Storm

[French Economy Minister Emmanuel ] Macron is very different from [Italian Prime Minister Matteo] Renzi in both style and substance. A banker-turned-politician, he is President François Hollande’s only minister who combines a serious understanding of France’s and Europe’s macroeconomic challenges with a reputation in Germany as a reformer and skillful interlocutor. So when he speaks of an impending religious war in Europe, between the Calvinist German-dominated northeast and the largely Catholic periphery, it is time to take notice.…

Exasperated by Schäuble’s backtracking from his own plan for political union, Macron recently vented his frustration: “The Calvinists want to make others pay until the end of their life,” he complained. “They want reforms with no contributions toward any solidarity.”

Here we go again.

Replay of the Thirty Years War and Peace of Westphalia, which established the principle of national sovereignty as fundamental in international relations? (Russia and China are relying on Westphalia in their counter to unipolarism.)

If Yanis is correct, the euro is toast.

Nothing short of macroeconomically significant institutional reforms will stabilize Europe. And only a pan-European democratic alliance of citizens can generate the groundswell needed for such reforms to take root.

That's not in the offing given either current or foreseeable conditions. 

Project Syndicate
Schäuble’s Gathering Storm
Yanis Varoufakis, a former finance minister of Greece, is Professor of Economics at the University of Athens.

Nikolay Starikov — Pipelines and geopolitics - the real reason behind Putin's visit to Italy

To summarize:

• Again, as a few years ago, world politics is concentrated on the web of pipelines.
• The battle is very intense and its outcome is difficult to predict. We have no less chances to win than our rivals.
• Our President is forced to take the initiative in the most difficult times and act as heavy artillery to "break through" enemy's positions.

Fort Russ
Pipelines and geopolitics - the real reason behind Putin's visit to Italy
Nikolay Starikov
Translated by Kristina Rus

Marshall Auerback — The Continuing Sorrows Of Matteo Renzi

Update on Italy.

Macrobits by Marshall Auerback
The Continuing Sorrows Of Matteo Renzi
Marshall Auerback