Italy in troubles with banks because of... Italy

Governments didn't act when they could, and current rules where agreed  by Italian administrations. Short summary of a useless European debate

by Emanuele Bonini

Italy and the banking sector, a long never-ending story started many and many years ago. It is difficult to establish when exactly everything had origin and started, but it can be said (and it must be) that when there was the possibility to act, Italy didn't. What are talking about? Italy has a problem with non-performing loans, which means Italian banks have debtors not able to repay the loans or in conditions close to impossibility of repaying. In other words, the Italian banking sector has been experiencing an exposure to a liquidity crisis. 
This is something not new, and the European Commission in its latest Country Specific Recommendations (CSR) pointed out that «the stock of non-performing loans remains at a very high level» in Italy, asking the Italian authorities to «accelerate the reduction in the stock of non-performing loans». Currently this amount is approximately 200 billion Euro or 12% of Italy’s GDP. Already in the 2015 CSR the EU Commission warned that «since the end of 2008, the non-performing loan ratio of the Italian banking sector has sharply increased, mainly in relation to banks’ corporate exposure», asking Italy to «accelerate the broad-based reduction of non-performing loans». This shows the debate over banks in Italy is not a new one.

Having said that, let enter more into detail regarding the Merkel-Renzi confrontation. During the first ever European Council meeting without a British leader, the German chancellor was asked about the banking sector of Italy, where the Italian prime minister Matteo Renzi is reasoning on the possibility to freeze the European rules on «bail-in». Current rules don't allow public direct interventions, which means governments can't pump liquidity in the banking sector. Merkel clearly said that «we cannot renegotiate every two years the rules of the banking sector». What does this declaration mean? In 2014 new rules on banks where agreed under the so called BRRD directive, the European directive on bank recovery and resolution. According to these rules, approved by all the EU Member States, the «bail-out» era is over. What does «bail-out» mean? It means that in case banks are in difficulty or crisis, government can intervene by recapitalizing the bank with public money. New rules introduce, on the contrary, the idea of a «bail-in», which basically means that in case of banking turmoil it's up to private (bondholders, and depositors) repay the liabilities of the bank in order to recapitalize the affected institution.

Brexit, further considerations

The British disaster is due to lack of leadership and fully-aware voters. Some lessons to learn from the oversea mediocrity

by Emanuele Bonini

Some considerations on Brexit have been already done, but what is going on in the United Kingdom opens the doors to further reflections. Participation in democratic process and awareness of voters are part of this unprecedented situation. Despite the president of the European Council, Donald Tusk, said this is no time for hysteria, the chaotic post-vote behaviour of British people is disavowing Mr. Tusk. Apparently the traditional British «keep calm and carry on» approach was smashed out by popular will. Here what can be said in addiction to the preliminary consideration on the British referendum.

Misinformation (citizens): When voters collect signatures in order to call for a new referendum the day after a referendum on the same topic, clearly there is something wrong in democracy. In 48 hours over three million people asked to repeat the referendum. What Brits are saying is basically «we are sorry, we made a mistake, please let us find a remedy to our foolishness». Which basically makes the situation even more fool, but that's it and that's where we are. Voters underestimated the consequences of their decision, and this because they basically had no any idea of what they voted for. Only after the end of the referendum British people finally realised what they did, when it was too late by now. People with voting right got a superficial approach in dealing with a vital question for their own, before general national interest.

Democracy: this British affair started the debate over democracy. Can the voting right apply for everybody? Giving the possibility to vote only to aware people, would be the right and best thing to do? These questions are becoming key. Having a look at the ongoing debates on social media is enough to understand how the basic democratic principles are now at stake. No all votes are equal. Unaware choice is harmful for the collectivity, so why should misinformed people be left free of voting? It is time to use the British epic-fail to re-discuss and reshape the rule of the democratic game. Granting the voting right to those who pass a pre-electoral exam should be the right way to move ahead.

Brexit, some preliminary considerations

What does «leave» mean? Nobody still knows, but it is possible to say what could be after the British referendum

by Emanuele Bonini

Finally the United Kingdom took a decision. Voters preferred to choose the «No, thanks» option forcing their country to leave di EU. So, it was Brexit at last. What about now nobody still know. Europe has to deal with an unprecedented situation, to be determined on the basis of the EU law and its possible interpretation. The only thing clear is that according to the treaties of the EU there is a two year time to establish how the Member State should leave. Negotiations will be crucial to shape the future, and now it is just a question of time and of agreements to be found. In time of unexplored scenarios it is not easy to say what it can be, although some considerations are possible.

- EU: This is not a defeat for Europe, unless the new EU at 27 Member State won't be able to use this opportunity to face euro-criticism and build up a real political union. The United Kingdom gave the opportunity to lead everybody to a reflection on Europe. British weren't ready for a real integration. Now it is time to see, frankly and in a decisive manner, who is really engaged in doing so. Those who are not, can join the United Kingdom. A strong European Commission now has to show the determination to stop any national whim, starting to be inflexible (severity was used only for fiscal policies, and that was a mistake) in front of any leader asking for less Europe. The Slovak rotating presidency of the EU comes in a moment which can be the right one only at the condition of a sound management of the political process. Slovakia is perhaps even more euro-skeptic than the UK, and a resolute Commission - freed by British blackmails - can start acting as guardian of the treaties asking to step up from anti-European approach. In is in - with all the rules it means - and out is out - with all it means. That has to be the approach. Europe failed because of its nature, that was essentially and only economic. A more federal Europe is the only possibility to relaunch the project, and the Brexit is the historic moment to do so.

Why Bremain is not a victory

It is against the idea of having the United States of Europe, and that's why Brexit could be the best result for all those (still) believe in integration

Opinions

Keeping the United Kingdom on board is not the solution, so Europe had to wish in a Brexit. Although it can be a paradox, it is not. All the pro-European palyers in the EU have called the British citizens to vote in favour of a staying in the Union. Call it «Bremain» if you really like, do as you wish! But Bremain is not a victory for Europe, on the contrary is a defeat. It is an happy ending only for the banking sector and the stock exchange, for the rest Bremain means the end of the political process in the EU. With a country - the United Kingdom - asking for less integration, the idea of the United States of Europe is gone. Forget about, because it will be an amazing idea just for a dream book. Brits will be there just to stop Europe, living in the idea of having a Great Britain in a small and weak union. They are wrong, as they are those who believe that having avoided a Brexit now everything is safe. Europe wasted the only chance history gave to be stronger and different, instead of carrying on with division, rivalry and blind, egoist national views.
On the contrary Brexit could be the opportunity to push away all those don't want a federal Europe, not only beyond the sea. The continent is plenty of governments, especially in the east, ready to put in question the European Union and call their own referendum at the first occasion. Having the UK outside could be the moment to restart the construction of Europe, by setting new rules valid for everybody, applicable to everybody, and putting an end once and for all to the «opt-out» era. Opt-in should be the only valid rule applicable to all the Member States, and Brexit could offer the opportunity to impose this principle. But Brexit is exactly what the banking sector and the stock exchanged wouldn't appreciate so much, and that's the reason why the majority of the stakeholders (meaning governments, businessmen, enterprises, economists) where pushing for a Remain. The latter is nothing but an illusion everything will be all right. Totally untrue. Europe is over, and the real challenge is to understand what about its future.



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Europe to lose anyway in front of British issue

The Arab-Israeli conflict is there to stay

The presidents of both sides paid visit to the EU institutions, asking for different kind of support and showing lack of conditions for political dialogue

Opinions

Which future for the Arab-Israeli conflict? A future of conflict. Neither the president of Israel nor that one of the Palestinian National Authority (PNA) were able to give Europe assurances for the times to come. On the contrary, the made clear peace is not an option on the table, because there is not even a table where sit around. Revlen Rivlin blamed the Palestinians, Mahmoud Abbas did the same with Israelis. After their contemporary visit to the EU institutions, the two leader made only clear the international community can forget about a solution of the Arab-Israel issue. «A permanent agreement for peace between us and Palestinians cannot be achieved», said Rivlin yesterday addressing the Plenary of the European Parliament. He basically said Hamas «is political and ideological busy in annihilating Israel», which makes impossible having the right environment to negotiate anything since the conditions needed for a peace agreement «are failing to materialise». The same said Mahmoud Abbas today, giving all responsibilities to the Jewish State. «We made progress at international level, we didn't move any step forward with Israel», said the leader of the PNA in his speech at the European Parliament plenary session. «Israel refuse to respect all the commitments». Both sides offered the same version of the story, basically repeating history. It is clear there is no political will to go ahead. The situation is more and more deteriorated, that is the truth. Rivlin come to Brussels calling Europe to don't interfere with Israeli policy, which are the result of «our democratic process». Once again Israel and Palestine played the game of passing the buck, blaming each other and asking Europe two different irreconcilables requests: respecting the Israeli «considerations» on one hand, listening to the Palestinians claims on the other hand. Rivlin and Abbas didn't meet, they prefer conducting their diplomatic battle separately. At the end of two days, it was clear conditions are not in place to see and end for a never-ending story. Guessing about future, it is easy to imagine a future of new conflict. Abbas made it clear. «The non-existence of the State of Palestine will continue the conflict». Israeli leadership is not ready to recognize such a State. After decades the Arab-Israeli conflict is still there, and is there to stay.

About democracy

An extract of dialogue take from the movie "The Majestic". In times where the US authorities declared war to all «non patriots», it appeared clear what democracy is: a regime where only those who stand with the majority's and/or leading class' thought are accepted. The alternative is persecution. Here there are is the spirit of the so called democracy explained in a lucid and brutal way:

«It's their game. You play by their rules, or they'll destroy you».
«I thought this was a democracy».
«The Declaration of Independence? The Constitution? Just pieces of paper with signatures on them. And you know what a signed paper is? A contract. Something that can be renegotiated at any time».

Quotes

«Democracy is not only about parliamentary majority, democracy is about civil society».
(Jean Claude Juncker, president of the European Commission, 1st of June 2016)

Gianni Agnelli's lawyer against Italy Constitution change

Franzo Grande Stevens critic over the way of proposing such a review. «Common rules of everybody life are decided together». Renzi? «An aspiring dictator»

Franzo Grande Stevens (centre)

by Emanuele Bonini

Certain statements by certain people make things not generic. In the case of Italy, please take note Mr. Franzo Grande Stevens decided to express his personal opinion on the constitutional reform proposed by the current government. Before going on, it is better to recall who Franzo Grande Stevens is and, as consequence, who he was. He is an Italian lawyer, famous for being the lawyer of the Agnelli family. He has been a personal consultant of Gianni Agnelli, the president of FIAT. He is not a person like all the others, for sure. It appears clear Franzo Grande Stevens contributed to write an important part of the country, and his opinion can't remain unheard. «I will vote for "no", I fight against this aspiring dictator», he said in an interview to Fatto Quotidiano, referring to the Italian prime minister Matteo Renzi and his idea of reforming the constitution. The proposal itself poses all the risks such a proposal can pose, but according to mr. Grande Stevens «the worst thing is a prime minister who threatens the electorate». Matteo Renzi is giving the referendum a test nature for the government he leads. He basically said "in case voters won't opt for 'yes', there will be a government crisis. «Who says something like that does not really have the sense of democracy», argued Gianni Agnelli's former lawyer. To him «the Constitution, the basic rules of coexistence that hold together the national community, are done decided all together». When the endorsement of democratic rules comes from an environment considered as "aristocratic", maybe there is something not working. In the supposed government of citizens, maybe?