EU clashes with Rome over Italy’s budget plans, again

the daily stirrer
Picture: Deutsche Welle

You thought Brexit was the only problem the EU was struggling with at the moment? How wrong were you?

The EU Commission’s latest rejection of Italy’s budget is the first step in disciplinary procedures that, in typical schol bully stylem the bastards of Brussels threaten will lead to big fines and economic sanctions. The EU Commission said Italy has “seriously violated” EU budget rules when rejecting again Italy’s proposed budget on Wednesday.

The Commission confirmed its assessment that “Italy’s draft budget plan is in particularly serious non-compliance” with EU debt rules, Commission Vice President Valdis Dombrovskis said in Brussels. It is woth reminding ourselves here that when Italy, with its traditionally weak currency, was bullied into joining the European Single Currency System (the Euro) after the EU had ben its own rules to breaking point in a politically motivated move to force weaker economies into financial integration, thus advancing the Federal European Superstate agenda.

Dombrovskis said with the Italian government’s current plan “we see a risk of the country sleepwalking into instability.” (Well he’s Greek so he’d know.)

“We conclude that the opening of a debt-based excessive deficit procedure is warranted,” he added, referring to the EU’s disciplinary process against member states for over-spending, a policy which has impoverished millions of people in Greece, Spain, Portgal, Ireland and Italy as EU imposed austerity policies have destroyed the spending power of wages.

The Commission’s move is mandated for countries whose debt levels are above the Eurozone threshold and who are not doing enough to reduce borrowing. Unfortunately not all countries are as strong economically as Germany, and with their weak economies tied to the German industrial powerhouse they cannot operayte within the eU rules.

Italy’s government, led by a populist coalition of left leanin Five-Star Movement and the right-of-centre Lega, has remained largely defiant towards Brussels. On Wednesday, Matteo Salvini, Italy’s interior minister, deputy prime minister and de fact leader of the government, said any EU sanctions against Rome would be “disrespectful” towards Italians.

“We are convinced about the numbers in our budget. We will talk about it in a year’s time,” he told reporters. Rome and the EU Commission had been at odds for weeks over Italy’s budget after it had been rejected by the Commission a first time.

Last week Italy submitted a revised version of its budget with only minor adjustments that did not appease the Commission and EU member states.

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End Of EU? Italy defies Brussels sanctions threat today, refuses budget change

ITALY’S Eurosceptic government is showing its teeth by defying the European Commission’s order to submit a new budget after Brussels rejected its budget proposal. The Lega Nord / Five Star coalition Government will today present the same measures despite the threat of harsh sanctions.

will present its new budget proposal on Wednesday following a request by the European Commission to rethink some key economic measures non-compliant with European guidelines. Brussels demanded that Rome come up with a revised version within three weeks worthy could face fines up to £3billion (€3.4bn).

But Italy will not budge on its plan to increase its deficit to 2.4 percent, which contravenes EU fiscal rules that are designed to protect the Eurozone. Italy’s projected GDP for 2019 is expected to be £1.67trillion (€1.87trillion), according to Trading Economics. When the single currency system was created it was known than nations including Italy, Spain, Portugal and Greece could not possibly sturvive economically with such a restriction on their financial autonomy. Germany and France however, were were determined to push ahead with their plan to create The Fourth Reich, by unifying the EU’s member states politically they ignored all warnings of the consequences of financial integration.

If the Italians ignore Brussels and run their deficit of 2.4 percent then their deficit comes to £40.01billion (€44.88billion). But the eurosceptic Government coalition of Matteo Salvini’s Lega and Luigi Di Maio’s Five Star Movement is proving defiant and has announced it will not change its plans in order to put the interests of Italian people ahead of Germany’s Euromaster race ambitions.

The disputed budget includes a new basic income plan and the scrapping of a key Brussels enforced austerity law introduced in 2011.  These are very left wing ambitions for a government Brussels propagandists and mainstream media like to describe as far right.

In addition, the Government has promised tax cuts for self-employed professionals introducing a so-called Flat Tax of 15 percent for any registered self-employed citizen within a list of limited professions.

The tax cuts are aimed at increasing the personal spending of the country to avoid an increment of VAT proposed by previous Governments.

 

Drunkard Juncker says EU Cannot Survive Without Italy<

 

Is the EU planning to pick a fight with the olive oil business
Image: Paramount Pictures

Ignoring warnings from the European Commission, the ECB and the European Commission (as well as practically every other supranational organization in Europe), the populist-led Italian government managed to submit their draft budget to the Commission before a midnight deadline – an outcome that was cheered by BTP traders, who bought back into Italian bonds, once again compressing the spread to bunds, which has blown out in recent months.

But rather than representing a deescalation of tensions between Italy and Brussels, the game of fiscal chicken in which both sides are presently engaged is instead entering its most acute phase, as Brussels now has two weeks to review the budget proposal before it can either accept the plan, or send it back with requests for revisions. And anybody who has been paying even passing attention to the populist government’s denigration of EU budgetary guidelines over the past few months should already understand that Brussels won’t just sit back and accept the budget for what it is.

In fact, European Commissioner Jean-Claude Juncker hinted as much Tuesday morning when he told Italian reporters that accepting the budget would be tantamount to inviting an widespread revolt against the EU, per Italian newswire ANSA and the FT. Juncker also blasted Italy for abandoning the fiscal commitments it made when it joined the EU. However, though they have wavered from time to time, the Italians haven’t kept their intentions to press for a budget deficit equivalent to 2.4% of GDP a secret. Even Giovanni Tria, Italy’s economy minister, defended the draft budget, saying the deficit “would be considered normal in all Western democracies, not explosive.”

Undeterred by the fact that there’s absolutely no political will in the Italian government to back down from their budget stance, despite threats from the ECB to provoke a Greece-style banking crisis if the Italians don’t yield to EU rules.

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Italy Declares War On Merkel And The EU

Matteo Salvini promises Eurosceptic surge in 2019 EU elections
Matteo Salvini promises Eurosceptic surge in 2019 EU elections – Picture:www.express.co.uk

There was never any doubt that the leaders of the Euroskeptic coalition now governing Italy planned to challence the EU’s ruling bureaucracy over Italy’s proposed budget. Both Deputy Prime Ministers, Luigi Di Maio of Five Star Movement and Matteo Salvini of The League, were adamant about locking horns with European Union leadership over all issues of sovereignty between now and May’s European Parliamentary elections. This battle, coming as it does as Angeal Merkel’s fraile coalition faces another major setback, indicates that Germany’s domination of the EU, if not at an end, is looking very vulnerable.

The Italian budget proposes both tax cuts and universal income and has kicked into touch the EU budget limit of 2.0% of GDP, coming in at 2.4%. It has put their Finance Minister, Giovanni Tria, in a difficult position because Tria doesn’t want to negotiate this budget with Brussels, preferring a less confrontational, read more pro-EU, approach.

Salvini and Di Maio, however, have other plans. And since we began covering this story before the Italian election back in March, the imperative that Salvini force the issue of the Troika’s demands – (the EU, European Central Bank and the International Monetary Fund) – back down their throats on debt restructuring/forgiveness.

Salvini’s emergence as the leader of this fight, was that Italy, because they are more than technically insolvent, have all the leverage in the negotiations. The size of their outstanding debt and the liabilities existent on the balance sheets of banks across Europe, most notably the nearly $1 trillion in TARGET 2 liabilities, are something Juncker, Draghi, Merkel and Christine LaGarde at the IMF simply cannot ignore. The reason Italy’s debt problem, and those of other EU members in southern Europe are so intractable is the single currency, which was created for political reasons without regard for the sheer economic stupidity of tying economies like those of Italy, Greece, Spain and Portugal to the German economic powerhouse. This cut off the debtor nations from their traditional escape route, devaluation.

To successfully challenge EU financial diktat, Salvini and Luigi Di Maio, leader of Five Star have to make a serious effort to negotiate a good deal for Italy with Brussels, Berlin and the IMF. This is why the budget squeaked past the 2.0% limit and then they walked it back to 2.0% but with provisions they knew would anger the EU finance ministers.

The point of this is to provoke Brussels into a punitive reaction and then paint them as the bad guys to shift public sentiment back towards an Italeave position. Italy’s problems are not solvable with Germany holding the purse strings for all the EU countries.

With a big swing towards Euroscepticism and nationalism under way in Germany it looks as though the days of the Federal Europe project are truly numbered. With voting due tomorrow in Bravaria’s regional election, the CSU, sister party of Merkel’s CDU and traditional ruling party in the Bravarian provincial government and their main rivals the Social Democrats see their respective votes collapsing. Alternate for Germany (AfD)is now pushing up towards 20% nationally and looks likely to have a significant presence in the Bravarian assembly after the votes are counted, while centre left voters are turning to The Greens. If AfD out polls the Greens and denies the CSU a path to a coalition government without them then that could have spillover effects for Angela Merkel.

The latest polls have AfD averaging around 11% versus a strong push up to 18% by the Greens. Given recent shock results we must doubt the accuracy of these polls, but given the recent history of anti – establishment parties it would not be a surprise to see AfD outperform their polling numbers on Sunday.

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Why I voted for Brexit

I often get asked, As a Brexit supporter ca you give me one definite advantage of leaving the largest trading bloc in the world?

Well where do I start?

The question asks me to state the reasons why I voted the way I did but it is the wrong question all the same.

I voted for ‘leave’ but I didn’t vote to leave a trading bloc. I voted to leave because I had lost faith with the ability of the European Union to be able to successfully govern itself. There have been several tests of the EU governance model over the past decade or so and, in my opinion, the EU has failed almost all of them.

  1. The way that the EU treated Greece during their financial collapse was a salutary moment for me. I am not Greek, have never been there and don’t really have any intention to in the future, but the way that the EU put the interests of the German banks ahead of the outcome of the population was scandalous. A community of nations? Not a chance!
  2. The EU should never have allowed the Greeks to get themselves into the situation whereby their economy would go into free fall. Everyone knew the Greeks were fiddling the books, not paying taxes, running up huge pension liabilities etc, but nothing was done because the EU desperately wanted Greece in the single currency system and that political goal was more important that the welfare of the Greek population.
  3. Nothing ever is done to address real problems because the political goals (ever closer union, a single currency, an EU army etc. take priority, and that is the Achilles heel of the EU. Italy is in an equally parlous state: its banks are basically bust, tax avoidance is high and it has severe budgetary problems. Nothing will be done by the EU and they will do everything in their power to obstruct any action by the Eurosceptic government of Lega amd Five Star aimed at tacking the problem.
  4. The Southern European countries are all still suffering from a decade of zero growth Or negative growth), high unemployment and stagnation. I had a plethora of talented and skilled Italians, Spaniards, Portuguese, Greeks and Cypriots work for me in London. I know they are not coming to London for the weather or the food. They are coming because their economies have collapsed and they are unable to find work. A generation of youth has been failed.
  5. The failure to offer a coherent and viable approach to the migration issue of a few years ago was the final straw. Again the Southern European countries who had to deal with the huge influx received no meaningful assistance. They were (and still are) thrown under the proverbial bus.

These are just a few examples of some of the biggest failures of coherent governance within the EU and national governments. This is not sustainable in the long term, you cannot keep “kicking the can down the road”. Things need to fundamentally change but I do not have any faith the required political will is there.

Ultimately I took the view that the EU did not have the political will or capability to join too many disparate political views and requirements together. The Northern bloc, Southern bloc and Eastern bloc have economies and histories/cultural biases that will take generations to merge even if the political will is there. It isn’t. This doesn’t end well and I don’t want my children to be tied into an organisation that is not capable of running itself.

Now this is not to say that I think that life outside the EU will be easy for the UK. It won’t. I am also not saying that the governance model in the UK is exemplary. It isn’t and the London centric bias needs to be fundamentally reviewed. But I am taking the very long view and I think that when the day of reckoning comes for the EU, which it will unless the EU is able to fundamentally change the way it is run and operated, then the UK (and my children) will have built up a diversified and resilient trading capability with the whole world and not just the parochial view it currently has with the EU.

Clearly the above analysis is flawed if you think the EU is well governed and you feel that I have fundamentally misunderstood what has happened over the past decade.

 

EU Summit “Dealbreaker” Emerges Hours Before Decision On Merkel’s Fate

 

Suday July 1, 17:00 UK time

This week European leaders were meeting in a desperate bid to agree a common solution to the immigration crisis that is tearing apart the European Union both politically and socially. With Italy having promised to veto any deal to distribute illegal immigrants (bogus refuges and asylum seekers,) throughout member states the leaders were left wiyh few options to consider one of which was a form of detention center called “Disembarkation Platforms,” to be located in northern Africa, where newly arrived migrants could be taken initially for processing of asylum requests.

The intention was that a detailed plan would be agreed during the the major EU Summit meeting held in Brussels over the weekend. The leaders met all day Thursday and then long into the night, finally announcing an agreement at 4:30 am. However, the agreement had no more details than the original proposal, a typical EU get out of agreeing that something needs to be done without saying what can or will be done.

The agreement, an extract of which is reproduced below, confines itself to vague generalisations but says  nothing about how the Disembarkation Platforms would work:

5. In order to definitively break the business model of the smugglers, thus preventing tragic loss of life, it is necessary to eliminate the incentive to embark on perilous journeys. This requires a new approach based on shared or complementary actions among the Member States to the disembarkation of those who are saved in Search And Rescue operations. In that context, the European Council calls on the Council and the Commission to swiftly explore the concept of regional disembarkation platforms, in close cooperation with relevant third countries as well as UNHCR and IOM. Such platforms should operate distinguishing individual situations, in full respect of international law and without creating a pull factor.

That paragraph contains just over 100 words, and it manages to do so while saying absolutely nothing.

No country has volunteered to host a Disembarkation Platform. Algeria, Morocco, and Tunisia have explicitly refused, and a spokesman for one of the three governments in Libya also refused and said that he thought the other two governments would refuse as well. One concern that all of these countries have is that a Disembarkation Platform would encourage jihadist attacks.

But an even bigger political earthquake is about to hit the EU. As we reported the political future of German Chancellor Angela Merkel depended on her securing a deal which would appease members of her fragile governing coalition that have threatened to withdraw support over her failure to deal with the immigration crisis, which has hit Germany particularly hard.

Merkel is fighting for her political future today, Sunday, as conservative rebels in her ruling coalition threaten to withdraw support over immigration as a last minute veto by Visegrad group state throw the deal into doubt. If she cannot convince her main political ally, CSU leader Horst Seehofer, that the deal, which relies on the cooperation of north African states that have already dismissed the idea, will limit immigration into Germany, she faces a political crisis that could end her parliamentary majority and, potentially, her career.


Angela Merkel and Horst Seehofer not seeing eye to eye (Picture: http://www.DW.com )

With an ultimatum thrown down two weeks ago by the CSU to propose a policy on pushing back immigrants into Germany to their nations of origin, or accept the CSU proposal of restoring border controls set to expire tonight, Merkel’s centre-right CDU party and its conservative Bavarian CSU allies are holding separate meetings to weigh the results the EU summit. Seehofer has made his position on the influx of Muslims to his country quite plain.

Merkel had hoped that in the absence of a common solution to the problem, bilateral deals with European migrant discontents – mostly Italy which threatened to veto last week’s summit until the last minute – and German neighbors would be enough to deter Interior Minister and CSU leader Seehofer from overruling her policy decisions by using his authority to order border security to start turning away migrants already registered in other EU nations. Such a unilateral move would force her to fire him, prompting a CSU walkout that would cost her her majority in parliament.

According to a document sent to coalition partners, Merkel sought to assure anti – immigration hardliners in Germany by claiming deals were done with 16 other countries to return already-registered migrants if they reached Germany. The document suggested bilateral deals were “only possible because the chancellor enjoys respect and authority throughout Europe,” Germany’s EU Commissioner and CDU politician Guenther Oettinger said in an interview with the Frankfurter Allgemeine Sonntagszeitung weekly.

But the claimed EU deal looked close to collapse emerged when Italy  and several central European nations including Poland, Hungary, the Czech Republic and Slovakia denied they had agreed to accept returned migrants.

Not only did the news embarrass the German government as it showed Chancellor Merkel does not enjoy widespread respect throughout Europe, where in reality she is held personally responsible for creating the crisis, but false claims about deals not done also caused new conflict with its statement that 14 EU countries had made a “political commitment” to take back refugees who originally arrived on their soil but moved on to Germany. As a result, Germany’s ARD reported that the government leaders in the Czech Republic, Hungary and Poland denied having made any commitment at the summit.

This has prompted fears that a tentative deal could fall apart in the last minute: “Given the different statements from some EU member countries, one can doubt whether all of the decisions at the EU Council will become reality,” head of the CSU parliamentary group Alexander Dobrindt told Bild am Sonntag newspaper.

 

Germany’s DPA news agency reported today that, Seehofer was underwhelmed with Merkel’s achievements and said he was not happy with the results of EU summit which he said is not as effective as turning away unilaterally at Germany’s borders people who have registered already in another EU country. Seehofer also rejected so-called “anchor centres” within Germany.

It looks like the end for Angie Baby as even her own party are fed up of her showing more committment to immigrants than the concerns of German people

Italy hijacks EU conference; new government WREAKS HAVOC at first major summit

A Senior EU official has confirmed Rome is behind the stalled talks in the Belgian capital after a press conference, featuring Jean-Claude Juncker, Donald Tusk and Bulgarian Prime Minister Boyko Borissov.

Express.co.uk has learned Italian Prime Minister Giuseppe Conte has blocked all of the summit conclusions – not just those on migration, which has not even been discussed by leaders of the EU28.

The last time a European Council summit ended with no agreed conclusions was March 2017, which means leaders could be stuck in meetings until the early hours as they struggle to reach an agreement.

An EU diplomat said Rome is “putting a knife on the member states throat” over migration even before the subject is discussed by heads of state.

Italy’s populist government had previously threatened to veto the joint EU statement on migration as German Chancellor Angela Merkel fights to find a European-level solution to avoid a domestic crisis on the issue. The month-old government in Rome argued the words put on the paper were insufficient to address what could become a fresh migration crisis to replicate the summer of 2015.