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Italy’s crisis and the crisis of democracy in Europe

Shades of Greece as Italy’s pro-EU President has set a democratic election aside by preventing anti-EU parties from forming a government.

Alexander Mercouris

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Originally published in The Duran.
Before analyzing what has just happened in Italy and discussing its likely consequences, it is necessary to say something about the fact of what has just happened.
Italy is supposed to be a parliamentary republic with the Prime Minister and the government accountable to the parliament.
As in other parliamentary republics the Italian President is supposed to be a figure above politics, whose primary function is to safeguard the constitution, which he is sworn to uphold. He is not supposed to meddle in day to day politics or to take on himself the leadership of the country.
Italy recently had parliamentary elections, which parties which can be broadly defined as “anti-EU” decisively won.
Italy’s most prominent pro-EU party, the Democratic Party, saw its vote fall to 19 percent of the vote.  By contrast the leftist but anti-EU Five Star Movement won 32 percent of the vote, whilst the right wing but even more anti-EU Northern League won 17.7 percent of the vote.
After complex and protracted discussions of a sort which are by no means unusual in Italy, the Five Star Movement and the Northern League agreed to form a coalition government together.
That coalition government would have represented the two anti-EU parties which together won almost 50 percent of the vote in the parliamentary elections, and which have a majority in the lower house of the Italian Parliament the Chamber of Deputies.
There was no obvious constitutional or legal reason why that government, which represents the parties which won the parliamentary elections, should not have been allowed to take office.
In any event, that is not what was permitted to happen.
The strongly pro-EU Italian President Sergio Mattarella – who is not directly elected, but is elected by an electoral college made up of the two chambers of the Italian parliament and of representatives of Italy’s regions – to the surprise of some (including me) appeared to agree to the coalition’s suggestion that its nominee Giuseppe Conte should be Italy’s new Prime Minister.
However, in what I strongly suspect was a prearranged move, he then vetoed the coalition’s nominee for Finance Minister, Paolo Savona.
This is despite the fact that Savona is an experienced banker and an internationally recognized economist, who has headed several of Italy’s banks and who has previously held ministerial office.
In vetoing Savona’s appointment, Mattarella did not question Savona’s qualifications for the Finance Ministry post or question his general competence. Savona’s record makes that impossible.
Nor did Mattarella say that Savona was unfit to hold office because, for example, he suffers from ill health or has a criminal record.
Instead Mattarella vetoed Savona’s appointment because of Savona’s known skepticism about Italy’s membership of the Eurozone, with which Mattarella happens to disagree.
Mattarella has dressed this up by talking of the negative reaction to Savona’s appointment by the financial markets, and of his “duty” to protect Italy’s savers.
As to the first, that subordinates the will of the Italian people as expressed in a democratic election to the opinion of the financial markets; as to the second, that is purely Mattarella’s opinion, whilst the nature of his “duty” to “protect” Italy’s savers is unknown to me.
I would add that it also seems to be a case of “protecting” Italy’s savers by setting aside their votes.
In either case these seem to me to be strange reasons for a President to give for, in effect, refusing to confirm in office a Finance Minister selected by a government which had just been democratically elected by the people.
In reality, I suspect that Mattarella never intended the coalition to take power. He did not reject Conte because that would have been too obvious a rejection of the outcome of the election, so he rejected Savona instead, knowing that that would be unacceptable to the coalition, and would cause it to return its mandate to form a government.
In that way Mattarella is now able to say that the coalition’s failure to form a government is its fault, and deny that he has set the verdict of the election aside.
In fact this is a straightforward case of the European political establishment – of which Mattarella is very much a part – setting the result of a democratic election which it doesn’t like aside. Moreover, it is not the first time the European political establishment has done this, though it has not done this previously in quite so flagrant a way.
Thus back in November 2011 the Italian Presidency was also used to help engineer the resignation of Italy’s then-Prime Minister, Silvio Berlusconi, who also had by this time become something of a bête noire for the European political establishment.
Berlusconi says this was because he refused to apply for a loan to the IMF, which would have required him to impose swingeing austerity measures on Italy. Spain’s former Prime Minister José Luis Rodríguez Zapatero says that’s true.
As happened after Berlusconi was forced to resign, the Italian Presidency is now moving to appoint a rigidly orthodox pro-EU technocrat to run what is sometimes called a “technical government” in place of a government democratically accountable to the parliament.
In 2011 this was the former EU Commissioner Mario Monti. This time it is the former IMF economist Carlo Cottarelli.
This is despite the fact that Giuseppe Conte – the coalition’s Prime Minister designate whose appointment the President has effectively blocked – commands a majority in the Chamber of Deputies, which Cottarelli of course does not.
Cottarelli in fact embodies and is committed to implementing precisely the mix of policies – fiscal orthodoxy, “supply side reforms” and unending austerity inside the Eurozone – which Italian voters rejected in the elections in March.
There is an old British quip that if voting changed anything it would be abolished. That is not true in Britain. In Italy however, the Italian people have just been given a lesson that voting changes nothing.
Back in November 2011, whilst the plotting against Berlusconi was still underway but shortly after the European political establishment had engineered the resignation of Greek Prime Minister George Papandreou, I wrote the following on my personal blog:

If the European Union collapses as a result of this crisis this will be the moment when that collapse begins. The European Union is supposed to be a union of democracies yet faced by the greatest crisis in its history its response is to impose its decisions by arranging the removal of the government that is supposed to be accountable to the people affected by those decisions whilst denying those same people a say. Moreover it seems that Greece is only the start. Steps are apparently already underway to engineer through the Italian Presidency the overthrow of the democratically elected government of Italy so that it can be replaced with a new government that is more amenable to the wishes of the French and German governments and to those of the central European institutions.
Acting in a democracy to deny the people the right to a say in the way they are governed amounts to a coup d’etat. This is so regardless of whether this coup is carried out legally or not. The political crisis in Germany in the early 1930s was precipitated by the perfectly legal and constitutional step of forming technocratic governments that had not been elected and which were not accountable to the German parliament the Reichstag, which sought to use Presidential powers to impose by decree austerity measures the German people had not voted for. The result was a crisis of legitimacy that ended in dictatorship.
I do not think that this time things will go this far but no one should be under any illusions about the momentous nature of the events that are now starting to unfold. Europe is on the brink and its crisis has just stopped being only economic.

Compare that with what the British writer and commentator John Laughland is now saying about the Italian crisis:

I don’t think it’s a constitutional crisis in Italy, I think it’s a constitutional crisis in the whole of Europe. We’ve seen now systematically how members of the European elite, of which President Mattarella is an excellent example, use every method they can to prevent parties wielding power if that power is to be wielded against the euro or against the European Union.

Back in March, immediately following the Italian parliamentary elections, I discussed the reasons for the rise of anti-EU parties in Italy and across Europe. I said that it was the inevitable outcome of the increasingly anti-democratic style European politics have been taking for several decades now and especially after the Eurozone was established.
I should have added that it was also an inevitable response to the draconian economic policies that go hand in hand with those politics, and which in the case of Italy have delivered two decades of economic stagnation.
I also said that the European political establishment appears incapable of learning anything from this, and appears determined instead to dig in, making it a certainty that resistance to it will continue to grow:

…..instead of analysing and responding to what is happening the European establishment across Europe is retreating into denial.
Thus the parties and leaders who are increasingly winning votes are dismissed as “populists” – a label which is both meaningless and deeply anti-democratic – their voters are dismissed as ‘ultra-right’ and racist, and their electoral successes are explained by sinister Russian meddling which is supposed to occur but of which no evidence is ever found…..
Unfortunately, as its denialism about its repeated electoral defeats might lead one to expect, the establishment in Europe instead of changing its approach is simply digging in.
Thus we have seen the manipulation of the French electoral process in order to engineer the election of Emmanuel Macron in France, the cobbling together of the ‘grand coalition’ in Germany, the threats against Poland and Hungary, and the increasingly frantic attempts in Britain to reverse or water down the Brexit vote.

Unfortunately – as I also pointed out in the same article – in the desert which is post-modern European politics, no convincing alternative to the European establishment exists.
Though the coalition in Italy between the Five Star Movement and the Northern League mathematically speaking commands the support of around half of Italy’s voters, the two parties are ideological opposites, and it is far from certain that the coalition they have formed would have held together in government.
Moreover there are serious doubts not just about the viability of its programme and of the managerial competence of its members.
Whilst it is certainly possible that the two coalition partners will vote down Cottarelli when he comes to parliament for a vote of confidence – forcing elections in August – and whilst it is also possible that the two parties which make up the coalition will increase their share of the vote in the August elections – no one should assume any of that.
Italy being Italy, it is not impossible that the coalition will fracture, or that there will be a strong reaction against it at the polls.
In that case the coup will have succeeded, and the ancien régime will have been restored.
However that will not resolve the underlying crisis not just in Italy but in Europe.
In my previous article I spoke of the situation not just in Italy but in Europe being one of paralysis – what the Greeks called stasis – a state of immobility or “standing still” despite the situation having become intolerable.

Just as everywhere else in Europe, the political system in Italy looks increasingly discredited and broken, but no viable alternative exists to put in its place.
As Gramsci once said
The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.
In the current political paralysis – what the Greeks called statis – “standing still” – the chaotic electoral result in Italy is just one more of the “great variety of morbid symptoms” which are bound to appear.

Events in Europe over the last few months illustrate the extent of this paralysis vividly. Consider for example
(1) the inability of Merkel and Macron to agree together a program for EU reform and the growing personal antipathy there is said to be between them;
(2) the resurrection of Germany’s unpopular and discredited “grand coalition,” despite the severe setback it suffered in the German parliamentary elections last September;
(3) the inability of the EU to stand by Iran and to develop an effective response to Donald Trump’s decision to pull out of the JCPOA or to respond to the further sanctions on Iran which he is imposing (see this discussion in the Financial Times).
The fact that the EU is almost certain to extend the sectoral sanctions it imposed on Russia at the end of June, though barely anyone in Europe believes in them any more, also tells the same story.
In Europe – not just in Italy – not only is it a case that “the new cannot be born”, but the Europeans look increasingly unable to break out of the prison they have made for themselves.
Opinions expressed are those of the author alone and may not reflect the opinions and viewpoints of Hellenic Insider, its publisher, its editors, or its staff, writers, and contributors.

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French opposition rejects Macron’s concessions to Yellow Vests, some demand ‘citizen revolution’

Mélenchon: “I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.”

RT

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Via RT…


Macron’s concessions to the Yellow Vests has failed to appease protesters and opposition politicians, such as Jean-Luc Mélenchon, who called for “citizen’s revolution” to continue until a fair distribution of wealth is achieved.

Immediately after French President Macron declared a “social and economic state of emergency” in response to large-scale protests by members of the Yellow Vest movement, promising a range of concessions to address their grievances, left-wing opposition politician Mélenchon called on the grassroots campaign to continue their revolution next Saturday.

I believe that Act 5 of the citizen revolution in our country will be a moment of great mobilization.

Macron’s promise of a €100 minimum wage increase, tax-free overtime pay and end-of-year bonuses, Mélenchon argued, will not affect any “considerable part” of the French population. Yet the leader of La France Insoumise stressed that the “decision” to rise up rests with “those who are in action.”

“We expect a real redistribution of wealth,” Benoît Hamon, a former presidential candidate and the founder of the Mouvement Génération, told BFM TV, accusing Macron’s package of measures that benefit the rich.

The Socialist Party’s first secretary, Olivier Faure, also slammed Macron’s financial concessions to struggling workers, noting that his general “course has not changed.”

Although welcoming certain tax measures, Marine Le Pen, president of the National Rally (previously National Front), accused the president’s “model” of governance based on “wild globalization, financialization of the economy, unfair competition,” of failing to address the social and cultural consequences of the Yellow Vest movement.

Macron’s speech was a “great comedy,”according to Debout la France chairman, Nicolas Dupont-Aignan, who accused the French President of “hypocrisy.”

Yet many found Melanchon’s calls to rise up against the government unreasonable, accusing the 67-year-old opposition politician of being an “opportunist” and “populist,” who is trying to hijack the social protest movement for his own gain.

Furthermore, some 54 percent of French believe the Yellow Vests achieved their goals and want rallies to stop, OpinionWay survey showed. While half of the survey respondents considered Macron’s anti-crisis measures unconvincing, another 49 percent found the president to be successful in addressing the demands of the protesters. Some 68 percent of those polled following Macron’s speech on Monday especially welcomed the increase in the minimum wage, while 78 percent favored tax cuts.

The Yellow Vest protests against pension cuts and fuel tax hikes last month were organized and kept strong via social media, without help from France’s powerful labor unions or official political parties. Some noted that such a mass mobilization of all levels of society managed to achieve unprecedented concessions from the government, which the unions failed to negotiate over the last three decades.

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Soros Mimics Hitler’s Bankers: Will Burden Europeans With Debt To ‘Save’ Them

George Soros is dissatisfied with the current EU refugee policy because it is still based on quotas.

The Duran

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Via GEFIRA:


After the Second World War, many economists racked their brains to answer the question of how Hitler managed to finance his armament, boost the economy and reduce unemployment.

Today his trick is well known. The economic miracle of Führer’s time became possible thanks to the so-called Mefo promissory notes.

The notes were the idea of the then President of the Reichsbank, Hjalmar Schacht, and served not only to finance the armament of the Wehrmacht for the Second World War, but also to create state jobs, which would otherwise not have been possible through the normal use of the money and capital markets, i.e. the annual increase in savings in Germany.

The Reich thus financed the armaments industry by accepting notes issued by the dummy company Metallurgische Forschungsgesellschaft GmbH (hence the name Mefo) rather than paying them in cash. The creation of money was in full swing from 1934 to 1938 – the total amount of notes issued at that time was 12 billion marks. The Reichsbank declared to the German banks that it was prepared to rediscount the Mefo notes, thus enabling the banks to discount them.

Because of their five-year term, the redemption of notes had to begin in 1939 at the latest. This threatened with enormous inflation. Since Schacht saw this as a threat to the Reichsmark, he expressed his doubts about the Reich Minister of Finance. But it did not help, and Schacht was quickly replaced by Economics Minister Walther Funk, who declared that the Reich would not redeem the Mefo notes, but would give Reich bonds to the Reichsbank in exchange. At the time of Funk, the autonomous Reichsbank statute was abolished, the Reichsbank was nationalized, and inflation exploded in such a way that Mefo notes with a circulation of 60 billion Reichsmark burdened the budget in post-war Germany.

George Soros also proposes such a money flurry in the style of Schacht and Funk.

Soros is dissatisfied with the current EU refugee policy because it is still based on quotas. He calls on the EU heads of state and governments to effectively deal with the migrant crisis through money flooding, which he calls “surge funding”.

“This would help to keep the influx of refugees at a level that Europe can absorb.”

Can absorb? Soros would be satisfied with the reception of 300,000 to 500,000 migrants per year. However, he is aware that the costs of his ethnic exchange plan are not financially feasible. In addition to the already enormous costs caused by migrants already in Europe, such a large number of new arrivals would add billions each year.

Soros calculates it at 30 billion euros a year, but argues that it would be worth it because “there is a real threat that the refugee crisis could cause the collapse of Europe’s Schengen system of open internal borders among twenty-six European states,” which would cost the EU between 47 and 100 billion euros in GDP losses.

Soros thus sees the financing of migrants and also of non-European countries that primarily receive migrants (which he also advocates) as a win-win relationship. He calls for the introduction of a new tax for the refugee crisis in the member states, including a financial transaction tax, an increase in VAT and the establishment of refugee funds. Soros knows, however, that such measures would not be accepted in the EU countries, so he proposes a different solution, which does not require a vote in the sovereign countries.

The new EU debt should be made by the EU taking advantage of its largely unused AAA credit status and issuing long-term bonds, which would boost the European economy. The funds could come from the European Stability Mechanism and the EU balance of payments support institution.

 “Both also have very similar institutional structures, and they are both backed entirely by the EU budget—and therefore do not require national guarantees or national parliamentary approval.“

In this way, the ESM and the BoPA (Balance of Payments Assistance Facility) would become the new Mefo’s that could issue bills of exchange, perhaps even cheques for Turks, Soros NGOs. Soros calculates that both institutions have a credit capacity of 60 billion, which should only increase as Portugal, Ireland and Greece repay each year the loans they received during the euro crisis. According to Soros, the old debts should be used to finance the new ones in such a way that it officially does not burden the budget in any of the EU Member States. The financial institutions that are to carry out this debt fraud must extend (indeed – cancel) their status, as the leader of the refugees expressed such a wish in his speech.

That Soros is striving to replace the indigenous European population with new arrivals from Africa and Asia is clear to anyone who observes its activities in Europe. The question is: what does he want to do this for and who is the real ruler, behind him, the real leader?

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The French People Feel Screwed

For the first time in his presidency, Macron is in trouble and Europe and America are looking on.

The Duran

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Authored by David Brown via The Gatestone Institute:


On December 4, French Prime Minister Édouard Phillipe told deputies of the ruling party, “La République en Marche”, that a proposed fuel tax rise, which had led to the largest protests France has seen in decades, would be suspended.

The protesters, called Gilets-Jaunes — “Yellow Vests,” because of the vests drivers are obliged by the government to carry in their vehicles in the event of a roadside breakdown — say that the fuel tax was the last straw from a president who took office with a promise to help the economically left-behind but instead has favoured the rich.

Even by French standards, the protests of the “Yellow Vests” during the weekend of December 1 were startling. Burning cars and vast plumes of grey smoke seemed to engulf the Arc De Triomphe as if Paris were at war. Comparisons were drawn with the Bread Wars of the 17th Century and the spirit of the Revolution of the 18th Century.

For more than two weeks, the “Yellow Vests” disrupted France. They paralyzed highways and forced roads to close — causing shortages across the country – and blocked fuel stations from Lille in the North to Marseilles in the South.

During protests in France’s capital, Paris, the “Yellow Vests” were soon joined by a more violent element, who began torching cars, smashing windows and looting stores. 133 were injured, 412 were arrested and more than 10,000 tear gas and stun grenades were fired.

One elderly lady was killed when she was struck by a stray grenade as she tried to shutter her windows against the melee.

There was talk of imposing a State of Emergency.

The “Yellow Vests” present the most significant opposition French President Emmanuel Macron has faced since coming to office in May 2017. Unlike previous protests in France, which have divided public opinion, these have widespread support – 72% according to a Harris Interactive Poll published December 1st.

Fuel tax rises — announced in November before being retracted on December — were intended to help bring down France’s carbon emissions by curbing the use of cars. Macron makes no secret of his wish to be seen as a global leader for environmental reform.

He forgets that back at home, among the people who elected him, fuel prices really matter to those outside big cities, where four-fifths of commuters drive to work and a third of them cover more than 30km each week.

The increases have incensed people in smaller communities, where they have already seen speed limits reduced to please the Greens and cuts to the local transport services.

These additional costs-of-living increases come at an extremely bad time for ordinary French people working outside of Paris. Lower-middle class families are not poor enough to receive welfare benefits but have seen their income flat-line whilst cost-of-living and taxes have risen.

An analysis by the Institut des Politiques Publiques think-tank shows that benefits cuts and tax changes in 2018 and 2019 will leave pensioners and the bottom fifth of households worse off, while the abolition of the wealth tax means that by far the biggest gains will go to the top 1%

This is tough to swallow. Macron is seen as being out of touch with ordinary people and is unlikely to escape his new title, “the President of the Rich.”

“People have this feeling that the Paris technocrats are doing complicated things to screw them,” said Charles Wyplosz, an economics professor at the Graduate Institute of International and Development Studies in Geneva.

It is probably not as complex as that. The French people feel screwed.

As employment and growth are slowing, Macron, for the first time in his presidency, is under serious pressure. Unemployment is at 9%; his efforts to reform Europe are stalling, and his approval rating has plummeted to just 23% according to a recent opinion poll by IFOP.

Images of Macron at the Arc De Triomphe daubed in graffiti calling for him to step down, or worse, have done little to bolster his image abroad.

So far, Macron had said he would not bow to street protests. To underline his point, in September 2017, he called protestors against French labour-market reform “slackers”.

The political U-Turn on the fuel tax is a turning point for the Macron presidency. The question is : What next, both for Macron and the “Yellow Vests”?

Macron most likely needs to plough ahead with his reform agenda, and doubtless knows he has the support of a solid majority in the National Assembly to do so. France is crippled by debt (nearly 100% of GDP) and its grossly bloated public sector. There are 5.2 million civil servants in France, and their number has increased by 36% since 1983. These represent 22% of the workforce compared to an OCDE average of 15%.

Tax-expert Jean-Philippe Delsol says France has 1.5 million too many “fonctionnaires [officials]. When you consider that public spending in France now accounts for 57 per cent of gross domestic product. Soon the system will no longer function as there will be less and less people working to support more and more people working less”.

Macron’s mistake, in addition to a seeming inclination for arrogance, is not to have made national economic reform his absolute priority right from his initial grace period after his election. Lower public expenses would have made it possible to lower taxes, hence creating what economists call a virtuous circle. Instead, he waited.

Now, at a time when he is deeply unpopular and social unrest is in full sway he is looking to make further reforms in unemployment benefits, scaling them back by reducing the payments and the length of time beneficiaries can receive the money. The “President of the Rich” strikes again.

There is talk that he may also re-introduce the wealth tax to try to placate the protestors.

Macron’s presidential term lasts until May 13, 2022. Understandably, Macron will be focused on the elections to the European Parliament expected to be held May 23-26, 2019. Headlines have signalled that Marine Le Pen and the National Rally (formally National Front) are ahead in the polls at 20%, compared to Macron’s En Marche at 19%.

The shift is understandable, given the divide between the countryside, where Le Pen has solid support, and the cities, where Macron’s centre-left prevail.

In contrast, the “Yellow Vests” have galvanised support after standing up for the “impotent ordinary”, and seem much buoyed by the solidarity they have been shown by both fire fighters and the police. There are images online of police removing their helmets and firefighters turning their backs on political authority to show their support for the protestors.

Whilst Macron’s political opposition may be fragmented, this new breed of coherent public opposition is something new. Leaderless, unstructured and organised online, the “Yellow Vests” have gained support from the left and right, yet resisted subjugation by either.

Being leaderless makes them difficult to negotiate withor to reason with in private. The “Yellow Vests” seem acutely aware of this strength, given their firm rebuttal of overtures for peace talks from the Macron government.

Enjoying huge support from the public and with reforms to the social welfare system on the horizon, the “Yellow Vests” are not going away.

For the first time in his Presidency, Macron is in trouble and Europe and America are looking on.

After Macron rebuked nationalism during his speech at the armistice ceremony, Trump was quick to remind the French President of his low approval rating and unemployment rate near 10%. A stinging broadside from Trump on twitter suggests that Macron may well be relegated to Trump’s list of global “Losers“:

“Emmanuel Macron suggests building its own army to protect Europe against the U.S., China and Russia. But it was Germany in World Wars One & Two – How did that work out for France? They were starting to learn German in Paris before the U.S. came along. Pay for NATO or not!”

The “impotent ordinary” in the United Kingdom, who might feel betrayed over Brexit, and the nationalists in Germany, who have suffered under Merkel , are no doubt staring in wonder at the “Yellow Vests”, wishing for the same moxie.

The historian Thomas Carlyle, chronicler of the French Revolution, said the French were unrivaled practitioners in the “art of insurrection”, and characterised the French mob as the “liveliest phenomena of our world”.

Mobs in other countries, by comparison, he argued were “dull masses” lacking audacity and inventiveness. The blazing yellow vests of the French protest movement , however, have made Macron appear increasingly dull and weak too.

David Brown is based in the United Kingdom.

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