by Summary:
The first battle in the war between Brussels and Rome has thus been won by Brussels: I have little doubt that Mattarella was lobbied very strongly by EU figures to block Savona, because he is capable of developing the real weapon that Five Star/Northern League could bring to bear against the euro – the “mini-BOT.” Named in reference to Italy’s “buoni ordinario del tesoro,” which are short-term government bonds, these would be government-issued notes valued at between €1 and €500, which would be issued to people and companies owed tax refunds by the government. These, in turn, would be valid for paying taxes, buying train tickets, getting petrol at government-owned fuel stations, and so on. These sidestep the euro’s monopoly as legal tender in the eurozone because a vendor does not have
Topics:
Mike Norman considers the following as important: Italy, wynne godley
This could be interesting, too:
The first battle in the war between Brussels and Rome has thus been won by Brussels: I have little doubt that Mattarella was lobbied very strongly by EU figures to block Savona, because he is capable of developing the real weapon that Five Star/Northern League could bring to bear against the euro – the “mini-BOT.” Named in reference to Italy’s “buoni ordinario del tesoro,” which are short-term government bonds, these would be government-issued notes valued at between €1 and €500, which would be issued to people and companies owed tax refunds by the government. These, in turn, would be valid for paying taxes, buying train tickets, getting petrol at government-owned fuel stations, and so on. These sidestep the euro’s monopoly as legal tender in the eurozone because a vendor does not have
Topics:
Mike Norman considers the following as important: Italy, wynne godley
This could be interesting, too:
Robert Waldmann writes Italy Leading in Neo-Fascism and Anti-Fascism
Sergio Cesaratto writes The economic and social consequences of the war on Europe and Italy
WARREN MOSLER writes Europe’s debtors must pawn their gold for Eurobond Redemption
Sergio Cesaratto writes Maastricht: nessun prosecco
The first battle in the war between Brussels and Rome has thus been won by Brussels: I have little doubt that Mattarella was lobbied very strongly by EU figures to block Savona, because he is capable of developing the real weapon that Five Star/Northern League could bring to bear against the euro – the “mini-BOT.” Named in reference to Italy’s “buoni ordinario del tesoro,” which are short-term government bonds, these would be government-issued notes valued at between €1 and €500, which would be issued to people and companies owed tax refunds by the government. These, in turn, would be valid for paying taxes, buying train tickets, getting petrol at government-owned fuel stations, and so on.
These sidestep the euro’s monopoly as legal tender in the eurozone because a vendor does not have to accept these if they are tendered in an exchange. But they can be accepted, perhaps at a discount to face value, and thereby become an alternative means of payment to the euro.
This is a weapon that Greece prepared, but never used, because Yanis Varoufakis, in what he describes in Adults in the Room as “Mea Maxima Culpa” (“my most grievous fault”) decided to leave the decision to Alexis Tsipras. Tsipras demurred, and the result was a Greek tragedy.
An alternative-means-of-payment is a much more cogent weapon in Italy’s hands than it would have been in Greece’s. Italy’s economy is six times larger than Greece’s and average salaries are almost double (though per-capita income has fallen substantially since the global financial crisis); its economy, particularly in the north, is an industrial powerhouse; and its climate supports a huge range of agricultural products. Much more of what Italians need to buy can be purchased from other Italians than was ever feasible for Greece (the only categorical exception is oil). The mini-BOT could really free Italy from the stranglehold of the euro.…Much more. Worth a read.
Brussels will seek to blame the anti-euro rebels, but the real villains of this crisis are the euro itself and the Maastricht Treaty. As the rebel British economist Wynne Godley stated back in 1992 when the Treaty was signed:
“If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalization, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation.” (Wynne Godley, ‘Maastricht and All That’ London Review of Books, October 1992)Of course, another option is "populist" revolt. If a genuine left can't rise to the occasion, Mussolini anyone?
RT
Brussels-Rome war: EU holds back Italy’s anti-euro tide for now
Steve Keen | Professor and Head Of School Of Economics, History & Politics, Kingston University, London