Connect with us

Latest

Analysis

News

Italy Declares War on Merkel and the EU

Alternate for Germany (AfD) is now pushing up towards 20% nationally.

The Duran

Published

on

2,699 Views

Authored by Tom Luongo via The Strategic Culture Foundation:


If there were ever any doubts that the leaders of the Euroskeptic coalition that now runs Italy has a plan to defy the European Union its proposed budget should quell them. 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.

Their budget proposal which included both tax cuts and universal income blew past 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 I began covering this story last year on my blog, I’ve said that it was 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.

What I meant then, and I was focused on Salvini’s emergence as the leader of this fight, was that Salvini and 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.

But, to do this Salvini and now Di Maio have to make a good faith 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 push Brussels and 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.

So, the first prong of their assault on the power structure of the EU is this, challenge them on their budget while making strong statements to the rest of Europe that they are not looking to exit the euro. If they do, it will be Germany forcing that situation.

The other prong of the assault is to remake the EU from within, which Salvini has openly stated is one of his goals.

It started more than a month ago when he met with Hungarian President Viktor Orban who agreed on a strategy of creating a ‘League of Leagues’ to unite the opposition to the current technocratic rule on the European Commission.

They were clear then that the goal was to wrest control of the European Commission Presidency from the coalition backing current President Jean-Claude Juncker.

With the rise in the polls of Euroskeptic parties across Europe, Salvini and Orban can drive real change in the structure of the parties within the European Parliament. The European People’s Party, which Orban’s Fidesz party is a member of, is vulnerable to losing its senior position in any coalition because of the huge change in Italy’s electoral make-up along with that in Austria with the less radical Sebastian Kurz.

But, the big swing is on the table in Germany. Alternate for Germany (AfD) is now pushing up towards 20% nationally and the next hurdle for its growth is this weekend’s Bavarian state elections. 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. The CSU has collapsed to just 35%. How accurate these polls are are anyone’s guess at this point, but given recent history I would not be surprised to see AfD outperform their polling numbers on Sunday.

Figure 1: Source Wahlrecht.de

Because if they do and the CSU/Green total is less than 50%, the CSU may be forced to form a three-headed coalition to freeze out AfD. And this is assuming that the CSU and the Greens could form any workable coalition in the first place.

That would truly upset CSU leaders and the cries to break the Union with Merkel’s CDU would grow louder.

And with Merkel dealing with internal CDU disloyalty the possibility rises quickly that her national coalition could collapse amid external pressure from Salvini and Di Maio over budget and debt issues.

The markets are beginning to wake up to the fact that this political battle is not going to go as smoothly for Germany and the Troika as it did for Greece. Salvini and Di Maio are not Varoufakis and Tsipras and Italy is simply way more important than Greece.

The euro is weakening by the day while Italian bond yields are spiking. Traders do not know what to do as each statement by an official associated with this fight moves Italian debt markets by 20 basis points.

And, I shouldn’t have to say this too many times but 20 basis point moves in sovereign debt markets is the definition of ‘not normal.’

Populist forces within the EU are angry and their power is growing. The technocrats in Brussels still seem to think that the old rules apply but they do not. Scare tactics will not work on these men because they know that the ultimate move is to simply make preparations for a new currency, be it the mini-BOT that has been floated previously by Salvini or a new lira.

My read on the current state of affairs is as follows. Since the ECB is the only marginal buyer of Italian debt, which has been the case for more than a year now, any sharp rise in bond yields is a result of the ECB simply backing off that buying and market forces taking over.

This is the ECB’s biggest weapon. It will try to scare everyone by allowing Italy’s fiscal position to erode quickly making it impossible for them to issue debt at sustainable yields. But, it does so at the expense of the value of the bonds it and other European banks already hold. Because they are dropping in value, undercutting the solvency of those banks.

If the Italian leadership holds the line and refuse to back down, then they call the ECB’s bluff on allowing rates to rise. The ECB has to come back in, begin buying to support the price, and the regroup for the next battle.

That’s what we’ve been seeing for a few months now in the Italian bond market. That’s where this war is being waged as well as the headlines. And Salvini and Di Maio understand it. Because if they didn’t they would have already folded.

Instead they have doubled down on their opposition to Brussels and Berlin and added new vectors to their attacks.

This will not end well.

Liked it? Take a second to support The Duran on Patreon!
Advertisement
3 Comments

3
Leave a Reply

avatar
3 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
3 Comment authors
TEPMarthaRodney Atkinson Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Rodney Atkinson
Guest

The word for the AfD is ALTERNATIVE not “Alternate” which means something different. And the Italian liabilities under target 2 are about Euros 450billion not 1 trillion.

Martha
Guest
Martha

Viva Italia!!! Italeave e LA NUOVA LIRA senza la EU. La EU a l’euro deve crollare.

TEP
Guest
TEP

The EU establishment still controls the big EU financial levers. When the banks close ranks and prevent Italians from accessing their money, Salvini and Di Maio will fold.

Latest

EXPLOSIVE: Michael Cohen sentencing memo exposes serial liar with nothing to offer Mueller (Video)

The Duran Quick Take: Episode 38.

Alex Christoforou

Published

on

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris take a quick look at the Michael Cohen sentencing memo which paints the picture of a man who was not as close to Trump as he made it out to be…a serial liar and cheat who leveraged his thin connections to the Trump organization for money and fame.

It was Cohen himself who proudly labelled himself as Trump’s “fixer”. The sentencing memo hints at the fact that even Mueller finds no value to Cohen in relation to the ongoing Trump-Russia witch hunt investigation.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Follow The Duran Audio Podcast on Soundcloud.

Via Axios

Special counsel Robert Mueller and federal prosecutors in New York have each submitted sentencing memos for President Trump’s former personal attorney Michael Cohen, after Cohen pleaded guilty in two different cases related to his work for Trump and the Trump Organization.

The big picture: The Southern District of New York recommended Cohen serve a range of 51 to 63 months for four crimes — “willful tax evasion, making false statements to a financial institution, illegal campaign contributions, and making false statements to Congress.” Mueller, meanwhile, did not take a position on the length of Cohen’s statement, but said he has made substantial efforts to assist the investigation.

Southern District of New York

Mueller investigation

Michael J. Stern, a federal prosecutor with the Justice Department for 25 years in Detroit and Los Angeles noted via USA Today

In support of their request that he serve no time in prison, Cohen’s attorneys offered a series of testimonials from friends who described the private Michael Cohen as a “truly caring” man with a “huge heart” who is not only “an upstanding, honorable, salt of the earth man” but also a “selfless caretaker.”

The choirboy portrayed by Cohen’s lawyers stands in sharp opposition to Cohen’s public persona as Trump’s legal bulldog, who once threatened a reporter with: “What I’m going to do to you is going to be f—ing disgusting. Do you understand me?”

Prosecutors focused their sentencing memo on Cohen as Mr. Hyde. Not only did they detail Cohen’s illegal activities, which include millions of dollars of fraud, they also recognized the public damage that stemmed from his political crimes — describing Cohen as “a man who knowingly sought to undermine core institutions of our democracy.”

Rebuffing efforts by Cohen’s attorneys to recast him as a good guy who made a few small mistakes, prosecutors cited texts, statements of witnesses, recordings, documents and other evidence that proved Cohen got ahead by employing a “pattern of deception that permeated his professional life.” The prosecutors attributed Cohen’s crimes to “personal greed,” an effort to “increase his power and influence,” and a desire to maintain his “opulent lifestyle.”

Perhaps the most damning reveal in the U.S. Attorney’s sentencing memo is that Cohen refused to fully cooperate. That’s despite his public relations campaign to convince us that he is a new man who will cooperate with any law enforcement authority, at any time, at any place.

As a former federal prosecutor who handled hundreds of plea deals like Cohen’s, I can say it is extremely rare for any credit to be recommended when a defendant decides not to sign a full cooperation deal. The only reason for a refusal would be to hide information. The prosecutors said as much in their sentencing memo: Cohen refused “to be debriefed on other uncharged criminal conduct, if any, in his past,” and “further declined” to discuss “other areas of investigative interest.”

 

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

Canada to Pay Heavy Price for Trudeau’s Groupie Role in US Banditry Against China

Trudeau would had to have known about the impending plot to snatch Huawei CFO Wanzhou and moreover that he personally signed off on it.

Published

on

Authored by Finian Cunningham via The Strategic Culture Foundation:


You do have to wonder about the political savvy of Canadian Prime Minister Justin Trudeau and his government. The furious fallout from China over the arrest of a senior telecoms executive is going to do severe damage to Canadian national interests.

Trudeau’s fawning over American demands is already rebounding very badly for Canada’s economy and its international image.

The Canadian arrest – on behalf of Washington – of Meng Wanzhou, chief financial officer of Chinese telecom giant Huawei, seems a blatant case of the Americans acting politically and vindictively. If the Americans are seen to be acting like bandits, then the Canadians are their flunkies.

Wanzhou was detained on December 1 by Canadian federal police as she was boarding a commercial airliner in Vancouver. She was reportedly handcuffed and led away in a humiliating manner which has shocked the Chinese government, media and public.

The business executive has since been released on a $7.4 million bail bond, pending further legal proceedings. She is effectively being kept under house arrest in Canada with electronic ankle tagging.

To add insult to injury, it is not even clear what Wanzhou is being prosecuted for. The US authorities have claimed that she is guilty of breaching American sanctions against Iran by conducting telecoms business with Tehran. It is presumed that the Canadians arrested Wanzhou at the request of the Americans. But so far a US extradition warrant has not been filed. That could take months. In the meantime, the Chinese businesswoman will be living under curfew, her freedom denied.

Canadian legal expert Christopher Black says there is no juridical case for Wanzhou’s detention. The issue of US sanctions on Iran is irrelevant and has no grounds in international law. It is simply the Americans applying their questionable national laws on a third party. Black contends that Canada has therefore no obligation whatsoever to impose those US laws regarding Iran in its territory, especially given that Ottawa and Beijing have their own separate bilateral diplomatic relations.

In any case, what the real issue is about is the Americans using legal mechanisms to intimidate and beat up commercial rivals. For months now, Washington has made it clear that it is targeting Chinese telecoms rivals as commercial competitors in a strategic sector. US claims about China using telecoms for “spying” and “infiltrating” American national security are bogus propaganda ruses to undermine these commercial rivals through foul means.

It also seems clear from US President Donald Trump’s unsubtle comments this week to Reuters, saying he would “personally intervene” in the Meng case “if it helped trade talks with China”, that the Huawei executive is being dangled like a bargaining chip. It was a tacit admission by Trump that the Americans really don’t have a legal case against her.

Canada’s foreign minister Chrystia Freeland bounced into damage limitation mode following Trump’s thuggish comments. She said that the case should not be “politicized” and that the legal proceedings should not be tampered with. How ironic is that?

The whole affair has been politicized from the very beginning. Meng’s arrest, or as Christopher Black calls it “hostage-taking”, is driven by Washington’s agenda of harassment against China for commercial reasons, under a legal pretext purportedly about Iranian sanctions.

When Trump revealed the cynical expediency of him “helping to free Wanzhou”, then the Canadians realized they were also being exposed for the flunkies that they are for American banditry. That’s why Freeland was obliged to quickly adopt the fastidious pretense of legal probity.

Canadian premier Justin Trudeau has claimed that he wasn’t aware of the American request for Wanzhou’s detention. Trudeau is being pseudo. For such a high-profile infringement against a senior Chinese business leader, Ottawa must have been fully briefed by the Americans. Christopher Black, the legal expert, believes that Trudeau would had to have known about the impending plot to snatch Wanzhou and moreover that he personally signed off on it.

What Trudeau and his government intended to get out of performing this sordid role for American thuggery is far from clear. Maybe after being verbally mauled by Trump as “weak and dishonest” at the G7 summit earlier this year, in June, Trudeau decided it was best to roll over and be a good little puppy for the Americans in their dirty deed against China.

But already it has since emerged that Canada is going to pay a very heavy price indeed for such dubious service to Washington. Beijing has warned that it will take retaliation against both Washington and Ottawa. And it is Ottawa that is more vulnerable to severe repercussions.

This week saw two Canadian citizens, one a former diplomat, detained in China on spying charges.

Canadian business analysts are also warning that Beijing can inflict harsh economic penalties on Ottawa. An incensed Chinese public have begun boycotting Canadian exports and sensitive Canadian investments in China are now at risk from being blocked by Beijing. A proposed free trade deal that was being negotiated between Ottawa and Beijing now looks dead in the water.

And if Trudeau’s government caves in to the excruciating economic pressure brought to bear by Beijing and then abides by China’s demand to immediately release Meng Wanzhou, Ottawa will look like a pathetic, gutless lackey to Washington. Canada’s reputation of being a liberal, independent state will be shredded. Even then the Chinese are unlikely to forget Trudeau’s treachery.

With comic irony, there’s a cringemaking personal dimension to this unseemly saga.

During the 197os when Trudeau’s mother Margaret was a thirty-something socialite heading for divorce from his father, then Prime Minister Pierre Trudeau, she was often in the gossip media for indiscretions at nightclubs. Rolling Stones guitarist Keith Richards claims in his autobiography that Margaret Trudeau was a groupie for the band, having flings with Mick Jagger and Ronnie Wood. Her racy escapades and louche lifestyle brought shame to many Canadians.

Poor Margaret Trudeau later wound up divorced, disgraced, financially broke and scraping a living from scribbling tell-all books.

Justin, her eldest son, is finding out that being a groupie for Washington’s banditry is also bringing disrepute for him and his country.

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

Latest

US Commits To “Indefinite” Occupation Of Syria; Controls Region The Size Of Croatia

Raqqa is beginning to look more and more like Baghdad circa 2005.

Published

on

Via Zerohedge


“We don’t want the Americans. It’s occupation” — a Syrian resident in US-controlled Raqqa told Stars and Stripes military newspaper. This as the Washington Post noted this week that “U.S. troops will now stay in Syria indefinitely, controlling a third of the country and facing peril on many fronts.”

Like the “forever war” in Afghanistan, will we be having the same discussion over the indefinite occupation of Syria stretching two decades from now? A new unusually frank assessment in Stars and Stripes bluntly lays out the basic facts concerning the White House decision to “stay the course” until the war’s close:

That decision puts U.S. troops in overall control, perhaps indefinitely, of an area comprising nearly a third of Syria, a vast expanse of mostly desert terrain roughly the size of Louisiana.

The Pentagon does not say how many troops are there. Officially, they number 503, but earlier this year an official let slip that the true number may be closer to 4,000

A prior New Yorker piece described the US-occupied area east of the Euphrates as “an area about the size of Croatia.” With no Congressional vote, no public debate, and not even so much as an official presidential address to the nation, the United States is settling in for another endless occupation of sovereign foreign soil while relying on the now very familiar post-911 AUMF fig leaf of “legality”.

Like the American public and even some Pentagon officials of late have been pointing out for years regarding Afghanistan, do US forces on the ground even know what the mission is? The mission may be undefined and remain ambiguously to “counter Iran”, yet the dangers and potential for major loss in blood and treasure loom larger than ever.

According to Stars and Stripes the dangerous cross-section of powder keg conflicts and geopolitical players means “a new war” is on the horizon:

The new mission raises new questions, about the role they will play and whether their presence will risk becoming a magnet for regional conflict and insurgency.

The area is surrounded by powers hostile both to the U.S. presence and the aspirations of the Kurds, who are governing the majority-Arab area in pursuit of a leftist ideology formulated by an imprisoned Turkish Kurdish leader. Signs that the Islamic State is starting to regroup and rumblings of discontent within the Arab community point to the threat of an insurgency.

Without the presence of U.S. troops, these dangers would almost certainly ignite a new war right away, said Ilham Ahmed, a senior official with the Self-Administration of North and East Syria, as the self-styled government of the area is called.

“They have to stay. If they leave and there isn’t a solution for Syria, it will be catastrophic,” she said.

But staying also heralds risk, and already the challenges are starting to mount.
So a US-backed local politician says the US can’t leave or there will be war, while American defense officials simultaneously recognize they are occupying the very center of an impending insurgency from hell — all of which fits the textbook definition of quagmire perfectly.

The New Yorker: “The United States has built a dozen or more bases from Manbij to Al-Hasakah, including four airfields, and American-backed forces now control all of Syria east of the Euphrates, an area about the size of Croatia.”

But in September the White House announced a realignment of its official priorities in Syria, namely to act “as a bulwark against Iran’s expanding influence.” This means the continued potential and likelihood of war with Syria, Iran, and Russia in the region is ever present, per Stripes:

Syrian government troops and Iranian proxy fighters are to the south and west. They have threatened to take the area back by force, in pursuit of President Bashar Assad’s pledge to bring all of Syria under government control.

Already signs of an Iraq-style insurgency targeting US forces in eastern Syria are beginning to emerge.

In Raqqa, the largest Syrian city at the heart of US occupation and reconstruction efforts, the Stripes report finds the following:

The anger on the streets is palpable. Some residents are openly hostile to foreign visitors, which is rare in other towns and cities freed from Islamic State control in Syria and Iraq. Even those who support the presence of the U.S. military and the SDF say they are resentful that the United States and its partners in the anti-ISIS coalition that bombed the city aren’t helping to rebuild.

And many appear not to support their new rulers.

We don’t want the Americans. It’s occupation,” said one man, a tailor, who didn’t want to give his name because he feared the consequences of speaking his mind. “I don’t know why they had to use such a huge number of weapons and destroy the city. Yes, ISIS was here, but we paid the price. They have a responsibility.”

Recent reports out of the Pentagon suggests defense officials simply want to throw more money into US efforts in Syria, which are further focused on training and supplying the so-called Syrian Democratic Forces (or Kurdish/YPG-dominated SDF), which threatens confrontation with Turkey as its forces continue making preparations for a planned attack on Kurdish enclaves in Syria this week.

Meanwhile, Raqqa is beginning to look more and more like Baghdad circa 2005:

Everyone says the streets are not safe now. Recent months have seen an uptick in assassinations and kidnappings, mostly targeting members of the security forces or people who work with the local council. But some critics of the authorities have been gunned down, too, and at night there are abductions and robberies.

As America settles in for yet another endless and “indefinite” occupation of a Middle East country, perhaps all that remains is for the president to land on an aircraft carrier with “Mission Accomplished” banners flying overhead?

Liked it? Take a second to support The Duran on Patreon!
Continue Reading

JOIN OUR YOUTUBE CHANNEL

Your donations make all the difference. Together we can expose fake news lies and deliver truth.

Amount to donate in USD$:

5 100

Validating payment information...
Waiting for PayPal...
Validating payment information...
Waiting for PayPal...
Advertisement

Advertisement

Quick Donate

The Duran
EURO
DONATE
Donate a quick 10 spot!
Advertisement
Advertisement

Advertisement

The Duran Newsletter

Trending