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Can Italy survive EU financial war about to be launched against it? (Video)

The Duran – News in Review – Episode 155.

Alex Christoforou

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Deputy Minister Mateo Salvini told Italian media that his government would be “open” to a lower deficit spend after an anonymous official said the government was looking at changes to the budget plan’s deficit target.

According to reports from Zerohedge, last week, the European Commission roiled Italian markets when it issued an unprecedented rejection of Italy’s 2019 budget planned and started preparing for an “Excessive Debt Procedure” against its third-largest economy – a proceeding that could lead to billions of euros of fines against the already-struggling Italian government.

Salvini told AdnKronos that “nobody is fixated” on the deficit target, and that it was more important to pass a budget that would fund the social-welfare expansions that the Italian government is planning – from increases to pension benefits to the controversial “citizen’s income” that would put up to 780 euros a month into the pockets of the poorest Italians.

Earlier, Deputy Premier Matteo Salvini told AdnKronos that next year’s shortfall in finances could be lower than the government’s target. Asked about the 2.4 percent target, Salvini reportedly told the newswire: “I think nobody is fixated on this, if there is a budget which makes the country grow, it could be 2.2 percent or 2.6 percent.”

Salvini spoke ahead of a budget meeting set for 7:30 pm Rome time (1:30 pm ET) where he would discuss the budget plan with Prime Minister Giuseppe Conte, Five Star Movement leader and fellow Deputy PM Luigi Di Maio and Economy Minister Giovanni Tria.

To further confirm that Salvini’s comments are not a bluff as Italy appears to be conceding to Brussels’ dictate, Deputy PM Di Maio reiterated the idea that the deficit target could be reduced as part of the final budget plan, so long as “not even a single person is kept out of the core measures.”

“If as part of the negotiation, we need to reduce the forecast deficit slightly, that’s not important to us. The issue is not the conflict with the EU on deficit at 2.4%, what’s important is that not even a single person is kept out of the core measures,” Di Maio said.

“What’s important is that this budget contain our main goals,” which include pension reform, citizens’ income, lower taxes, “things which we cannot give up,” Di Maio said.

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris explore the deficit standoff between Italy and the European Union, and how the EU’s financial threats against the Italian government are meant to punish the anti-EU leaders of Italy, who have dared to question the rule of Brussels with regard to immigration policy, and closer ties with Russia.

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Zerohedge reports that in the most significant sign yet that the confrontation between Italy and Europe is heading toward the point of no return, the European Union confirmed Wednesday morning that it would officially reject Italy’s budget plan, an unprecedented move that will likely lead to billions of euros in fines being levied against Rome for violating the bloc’s budget rules. Furthermore, the EC said it would call for the opening of an Excessive Debt Proceeding against the Italian government, which could lead to billions of euros in fines.

In its draft budget, the Italian government called for an expansion of the country’s budget deficit to 2.4% of GDP to finance tax cuts, expanded pension benefits and other handouts to unemployed and desperate Italians.

“Our analysis today suggests that the debt doesn’t respect our budget rules. We conclude that opening a proceeding against excessive spending based n the debt is then justified,” the EU said, according to ANSA.

But EU bureaucrats have long maintained that this expansion will do nothing to boost stagnant Italian growth; instead, it will hurt Italians by inevitably leading to more austerity. The Italian plan represents a “particularly grave disrespect” of EU budget rules, particularly the recommendation from the meeting of EU ecofin ministers last July 13. The statement confirms Brussels’ previous analysis.

European Commission Vice President Valdis Dombrovskis said Italy’s aggressive spending would eventually have a negative impact on growth.

“Despite already having very high debt, Italy is essentially planning significant additional spending, instead of the necessary budgetary prudence, and I want to say that the impact of this maneuver on growth will probably be negative from our point of view,” Dombrovskis said.

Following its opining on the plan, the Commission revealed that it would be calling for an Excessive Debt Procedure against the Italians because their spending for 2019 didn’t comply with EU rules. However, this plan must be put to the Eurogroup (which next meets Dec. 3), which must decide whether to approve the proceedings before they can move forward, as CNBC explained. If Italy doesn’t change course, the Commission said it would push to fine the Italian government.

“There are doubts and questions about growth” forecast in the Italian plan and, despite the clarifications requested, these persist,” said EU Commissioner for economic affairs Pierre Moscovici. “We have no answers to these questions: where does this growth come from nor who will pay the bill,” apart from how the plan will increase the “risks to Italian citizens, banks and businesses” by increasing the deficit and debt.

Moscovici added that the EU would give member states a chance to comment before opening its excessive debt proceedings, but he said he doubts that anybody would agree with the Commission’s analysis.

“Today we are not opening the excessive deficit procedure. However, it is undeniable that we see this is the path which is opening up ahead of us,” EU Economic and Monetary Commissioner Pierre Moscovici told reporters in Brussels. “It is now up to the member states to give their feelings and their views on the basis of our report over the coming two weeks.”

“To be quite frank, I have no reason to believe that they would disagree with what the commission has done by way of analysis,” Moscovici said.

Prime Minister Giuseppe Conte responded that the Italian government is convinced that the plan is “excellent” and in the best interest of the Italian people and Europe. Conte said he hopes to convince European Commission President Jean Claude Juncker during a Saturday meeting. Deputy Prime Minister Matteo Salvini said he expects a letter from the EU announcing its punitive measures to arrive around Christmas.

Analysts at ING believe that, as the proceedings unfold over several months, Italian bank stocks will remain under pressure.

“This procedure will take several months, but stands to keep (government bonds) and the Italian banking sector under pressure. Favor euro underperformance in Europe and probably further choppy euro-dollar trading in a $1.1350-$1.1450 range,” ING Bank analysts told clients. 

The relief from tightening financial conditions was a surprising but not unwelcome development for investors, but with neither side showing any indication of backing down – and the Brexit threat still looming for the euro – they could prove short-lived as Conte prepares to travel to the Lions Den this weekend for what looks to be an epic confrontation with Juncker.

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wholy1Brigitte MeierMethodologos Recent comment authors
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Very good analysys. One observation: Italian debt started in 1981 when Banca d’Italia (the bank of the State) couldn’t buy anymore State bonds (keeping down the interest rates as before) because of the pressure of international financial sectors on Ciampi and other liberals.

Brigitte Meier
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Italy’s plans are actually good: it leaves all Italians with some money to spend, which will increase inland economy and give exporters the necessary inland market from which to develop new export products. What Conte and Salvini came up with is how you prop up the economy to create new growth. Brussels’ threats are motivated by a fear of Germany to lose its dominant position over Italy.

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Italy was/is/always will be incapable of “surviving” anything – especially organized crime.
Even though I have/will always have total disgust/disregard for the [P]EU, it would probably be better off/perhaps last a little longer withOUT Italy dragging it down. Either way – they deserve each other’s eventual demise.

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Some Russian monarchists want Tsar Vladimir Putin

Latest news from Russian monarchists highlight the debate over bringing the Russian Empire back to life in modern times.

Seraphim Hanisch

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A December 13 report in The Wall Street Journal shone light on a notion that has been afoot in the Russian Federation since the fall of Communism in 1991 – the restoration of the Monarchy as the form of government, complete with a new Tsar of all the Russias.

Of course, some of these monarchists have a top contender in mind for that post, none other than President Vladimir Putin himself.

This idea has long been used in a pejorative light in the West, as various shadowy and not-so-shadowy elements in the American media speculated over the years that Mr. Putin was actually aspiring to become Tsar. This was thrown around until probably the time that the Russian president spoke, lamenting the fall of Communism, and since then the prime accusation has been that President Putin wants to bring back the Soviet Union.

This is not true. It also does not appear to be the case that the Russian president wants to be Tsar. But the monarchists are not fazed in the slightest. Here is excerpted material from the WSJ piece, with emphases added:

The last time term limits forced Russian leader Vladimir Putin to step down from the presidency, he became prime minister for a few years.

This time around, a group of pro-Kremlin activists have a different idea: Proclaim him Czar Vladimir.

“We will do everything possible to make sure Putin stays in power as long as possible,” Konstantin Malofeyev, a politically active businessman, said recently to thunderous applause from hundreds of Russian Orthodox priests and members of the country’s top political parties gathered at a conference outside Moscow. They were united by one cause—to return the monarchy to Russia…

Even among those who want a monarchy, however, there are splits over what kind it should be. Is an absolute monarchy better than a constitutional monarchy? Should a blood line be established or should the czar be elected? For those who favor male succession, would it be a problem that Mr. Putin reportedly only has two daughters? Some have even suggested others besides Mr. Putin should accede to the throne.

There is a very keen interest indeed among some in Russia that propose various options as to who might best become Tsar in the event that the Monarchy is restored.

Grand Duke George Mikhailovich Romanov and his mother, Grand Duchess Maria Vladimirovna of Russia, together with Metropolitan Hilarion Alfeyev, head of the Russian Orthodox Church Department of External Relations

One candidate that has received significant attention is a man by the name of George Mikhailovich Romanov. He is an actual member of the Royal family, the heir apparent to Maria Vladimirovna Romanova, Grand Duchess of Russia. There are other heir apparents as well, and the issue as to who it should be has not been settled among the surviving members of the Romanov family.

The restoration of the Russian monarchy is unique because to carries strong religious significance. As far back as the 8th and 9th centuries, A.D., a host of saints and prophets appear to have foreseen the advent of the Soviet times and the restoration of the Tsar after their conclusion.

Some such prophecies are attributed to anonymous sources, but some are named. Here are two with rather extensive editing, so please go to the site linked for the fullest description of the prophecies.

Monk Abel the Prophet (+1831).

In a conversation with Tsar Paul I (+1801), after prophesying the destinies of all the Tsars from Paul I to Nicholas II:

“What is impossible for man is possible for God. God delays with His help, but it is said that He will give it soon and will raise the horn of Russian salvation. And there will arise a great prince from your race in exile, who stands for the sons of his people. He will be a chosen one of God, and on his head will be blessing. He will be the only one comprehensible to all, the very heart of Russia will sense him. His appearance will be sovereign and radiant, and nobody will say: ‘The Tsar is here or there’, but all will say: ‘That is him’. The will of the people will submit to the mercy of God, and he himself will confirm his calling. His name has occurred three times in Russian history. Two of the same name have already been on the throne, but not on the Tsar’s throne. But he will sit on the Tsar’s throne as the third. In him will be the salvation and happiness of the Russian realm.”

“Russian hopes will be realized upon [the cathedral of Hagia] Sophia in Tsargrad [Constantinople]; the Orthodox Cross will gleam again; Holy Rus will be filled with the smoke of incense and prayer, and will blossom like a heavenly lily.”

And from one of the most famous saints in Russian history:

St. John of Kronstadt (+1908):

“I foresee the restoration of a powerful Russia, still stronger and mightier than before. On the bones of these martyrs, remember, as on a strong foundation, will the new Russia we built – according to the old model; strong in her faith in Christ God and in the Holy Trinity! And there will be, in accordance with the covenant of the holy Prince Vladimir, a single Church! Russian people have ceased to understand what Rus is: it is the footstool of the Lord’s Throne! The Russian person must understand this and thank God that he is Russian.”

“The Church will remain unshaken to the end of the age, and a Monarch of Russia, if he remains faithful to the Orthodox Church, will be established on the Throne of Russia until the end of the age.”

What may surprise those in the West is that there are a great many people in Russia and in Orthodox Christian countries in general who take these prophecies quite seriously.

Interestingly enough, when the idea of restoring the monarchy was brought to President Putin’s attention, he regarded the idea as “beautiful” according to Lt. General Leonid Reshetnikov, but also expressed concern that it would lead to stagnation within the country.

A second statement, this one by Kremlin spokesman Dmitry Peskov, noted that President Putin does not like the idea of bringing back the monarchy, but offered no comment on the conversation with Mr. Reshetnikov.

The idea of restoring the monarchy is not completely absurd. Britain overthrew its own monarchy in 1649 during that country’s Civil War, but it was restored shortly afterwards under King Charles II. Spain cast aside its monarchy in 1931, with its king, Alfonso XIII going into exile, but after sixteen years this monarchy, too, was restored.

Both of these monarchies have become largely ceremonial, with most governing functions carried out through some kind of Parliament and Prime Minister. It is therefore not clear what a ruling monarchy in Russia would look like.

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US confirms pullout from INF treaty, Moscow will respond if missiles placed in Europe – deputy FM

Moscow will respond to possible attempts to place short and intermediate range nuclear-capable missiles in Europe if the US decides to go on with this plan.

RT

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Washington has confirmed its decision to withdraw from the INF treaty is final, Russia’s deputy foreign minister said, adding that Moscow will ‘take measures’ if American missiles that threaten its security are placed in Europe.

“Washington publicly announced its plans to withdraw from the treaty (the Intermediate-Range Nuclear Forces) already in October. Through the high-level bilateral channels it was confirmed to us that this decision was final and wasn’t an attempt to initiate dialogue,” Sergey Ryabkov told the Kommersant newspaper.

The Deputy FM said that Moscow will respond to possible attempts to place short and intermediate range nuclear-capable missiles in Europe if the US decides to go on with this plan.

“We’ll be forced to come up with effective compensating measures. I’d like to warn against pushing the situation towards the eruption of new ‘missile crises.’ I am convinced that no sane country could be interested in something like this,” he said.

Russia isn’t threatening anybody, but have the necessary strength and means to counter any aggressor.
Back in October, President Donald Trump warned that Washington was planning unilateral withdrawal from the Intermediate-Range Nuclear Forces (INF) treaty because “Russia has not adhered to the agreement.” The US leader also promised that the country would keep boosting its nuclear arsenal until Russia and China “come to their senses.”

Earlier this month, US Secretary of State Mike Pompeo announced that Washington will suspend its obligations under the treaty within 60 days if Russia does not “return to compliance.”

Signed in late 1988, the INF agreement was considered a milestone in ending the arms race between the US and the USSR.

In recent years, Moscow and Washington have repeatedly accused each other of violating the INF deal. While the US has alleged that Russia has developed missiles prohibited by the treaty, Russia insists that the American anti-missile systems deployed in Eastern Europe can actually be used to launch intermediate-range cruise missiles.

The deputy FM said that Washington “never made a secret” of the fact that its INF treaty pullout “wasn’t so much about problems between the US and Russia, but about the desire of the Americans to get rid of all restrictions that were inconvenient for them.”

The US side expressed belief that the INF deal “significantly limits the US military’s capabilities to counter states with arsenals of medium-range and shorter-range ground-based missiles,” which threaten American interests, he said. “China, Iran and North Korea” were specifically mentioned by Washington, Ryabkov added.

“I don’t think that we’re talking about a new missile crisis, but the US plans are so far absolutely unclear,” Mikhail Khodarenok, retired colonel and military expert, told RT, reminding that the Americans have avoided any type of “meaningful discussion” with Moscow in regards to its INF deal pullout.

While “there’ll be no deployment of [US missiles] in Europe any time soon,” Moscow should expect that Washington would try to void other agreements with Russia as well, Khodarenok warned.

The INF deal “just stopped being beneficial for the US. Next up are all the other arms control treaties. There’ll be no resistance from the NATO allies [to US actions],” he said.

“The neocons who run Trump’s foreign policy never have liked arms reduction treaties,” former Pentagon official Michael Maloof told RT. “The new START treaty which comes up for renewal also could be in jeopardy.”

“The risk of a new nuclear buildup is really quite obvious” if the US withdrawals from the INF treaty, Dan Smith, the director of the Stockholm International Peace Research Institute, told RT.

“I think the relations between the great powers – the US and Russia as well as the US and China – are more difficult than they’ve been for a long time,” he added.

However, with Washington having indicated that it wants China to be part of the new deal, “there are still possibilities for negotiations and agreement,” according to Smith. Nonetheless, he warned that following this path will demand strong political will and tactical thinking from the leadership of all three countries.

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US Pressures Germany To Ditch Huawei Over ‘Security Concerns’

This news will likely not go over well in Beijing, which is still struggling with the US and Canada over the arrest of Huawei CFO Meng Wanzhou in Vancouver.

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Via Zerohedge


First it was Australia, New Zealand and Japan, now the US is pressing the German government to refuse to use equipment manufactured by Chinese telecom giant Huawei as Europe’s largest economy seeks to build out its 5G infrastructure.

According to Bloomberg, a US delegation met on Friday with German Foreign Ministry officials in Berlin to talk about the security risks presented by Huawei’s equipment, which the US says is vulnerable to spying. The meeting in Germany follows a report from late last month claiming the US had launched an “extraordinary outreach campaign” to warn its allies against using Huawei equipment (while its vulnerability to Chinese spying has been cited as the reason to avoid Huawei, it’s also worth noting that the US and China are locked in a battle for who will dominate the global 5G space…a battle that Huawei is currently winning).

Germany is set to hold an auction early next year to find a supplier to help expand its 5G network. The Berlin meeting took place one day after Deutsche Telekom said it would reexamine its decision to use Huawei equipment.

US officials are optimistic that their warnings are getting a hearing, though any detailed talks are in early stages and no concrete commitments have been made, according to one of the people.

The US pressure on Germany underscores increased scrutiny of Huawei as governments grapple with fears that the telecom-equipment maker’s gear is an enabler for Chinese espionage. The Berlin meeting took place a day after German carrier Deutsche Telekom AG said it will re-evaluate its purchasing strategy on Huawei, an indication that it may drop the Chinese company from its list of network suppliers.

France is also reportedly considering further restrictions after adding Huawei products to its “high alert” list. The US has already passed a ban preventing government agencies from using anything made by Huawei. But the telecoms equipment provider isn’t taking these threats to its business lying down.

U.S. warnings over espionage are a delicate matter in Germany. Revelations over the scale of the National Security Agency’s signals intelligence, including reports of tapping Merkel’s mobile phone, are still fresh in Berlin five years after they came to light.

Huawei is pushing back against the accusations. The company’s rotating chairman warned this week that blacklisting the Chinese company without proof will hurt the industry and disrupt the emergence of new wireless technology globally. Ken Hu, speaking at a Huawei manufacturing base in Dongguan, cited “groundless speculation,” in some of the first public comments since the shock arrest of the company’s chief financial officer.

This news will likely not go over well in Beijing, which is still struggling with the US and Canada over the arrest of Huawei CFO Meng Wanzhou in Vancouver. In an editorial published Sunday, the Global Times, an English-language mouthpiece for the Communist Party, warned that China should retaliate against any country that – like Australia – takes a hard line against Huawei. So, if you’re a German citizen in Beijing, you might want to consider getting the hell out of Dodge.

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