Italian Drumbeat against EU Economic Policy

June 28, 2018 (EIRNS)—Speaking before the Senate yesterday, Italian Prime Minister Giuseppe Conte addressed the question of economic and budget policy, among other issues, and drew a couple of red lines against the EU.

Mentioning just-released new figures on increased poverty in Italy, Conte said that Italy cannot wait any longer for a shift in EU economic policy. He then laid a mine under the Emmanuel Macron/Angela Merkel roadmap.

“I will be very clear on our positions: If we want to prevent the decline of the Union and realize an economic Union which is perceived as really close to the citizen, this is the moment to advance risk sharing, which has been so far too slow. But beware: Those mechanisms of risk sharing shall not include conditionalities ... which, in the name of reducing risk, end up worsening ongoing processes with the result that a greater banking and financial instability is achieved—not so much in Italy, but rather in other member countries with smaller and more exposed economic systems.

“To be clear, we don’t want a European Monetary Fund which, instead of working for the end of [social] equity, ends up forcing some countries into predefined and automatic policies,” expropriating “the power to elaborate autonomous and effective economic policies. We are against any rigidity in the reform of the EMS, especially because new conditionalities in the process of debt-restructuring would increase rather than reduce financial instability.”

In the debate, Senators Bottici (M5S) and Bagnai (Lega) elaborated on Conte’s reference to financial instability. Bottici exposed the failure of EU regulators to prevent a new financial crisis, by their focussing on credit risk (non-performing loans) instead of worthless so-called assets. “In 2016, Level 2 and Level 3 assets and liabilities of large European banks amounted to a total of ‚Ǩ6.8 trillion, about 12 times the non-performing loans of all banks in the Eurozone,” Bottici said. Bagnai praised the fact that the Conte government has reintroduced into Italy a “healthy patriotic sentiment” which is the best antidote against nationalism. He then reminded Senators that through the European Central Bank policy, capital has fled to Germany, considered a safe haven.

“It happens that they have a bank [Deutsche Bank], the largest bank, which, because of the derivatives problem mentioned by my colleague Bottici, has lost 43% of its share value since the beginning of the year.”

The latest news as of this evening is that Conte vetoed a statement on the first part of the summit, which just concluded. Consequently, a press conference by the two stooges, EU Commission President Jean-Claude Juncker and European Council President Donald Tusk, was cancelled.

“As one Member reserved their position on the entire conclusions, no conclusions have been agreed on at this stage. For this reason, the press conference by the EU institutional representatives has been cancelled and will instead take place tomorrow after the end of the Euro Summit,” according to a statement from the European Council. Italy had said that it wanted to vote on the entire document tomorrow, including the immigration issue discussed today.