Italy Gasping for Economic Breath Like a Beached Whale

By: Mike_Shedlock

Berlusconi Reiterates Euro Exit "Not Blasphemy"; Beppe Grillo Discusses "Taboo of the Euro"

On June 1, former Italian Prime Minister Silvio Berlusconi said "Italy should dump the euro unless the European Central Bank agreed to inject more cash into the economy". One day later Berlusconi said the idea Italy should dump euro was a "joke".

It was not a joke, except perhaps as quoted. On June 20, Berlusconi says Italy euro exit "not blasphemy"

Italy should consider leaving the euro unless Germany agrees to the European Central Bank acting as a guarantor for sovereign debt and printing money to reflate the economy, former Prime Minister Silvio Berlusconi said on Wednesday.

"Leaving the euro is not a blasphemy," he wrote on his Facebook page.

If Germany does not agree to a new role for the ECB then it should consider leaving the euro itself, Berlusconi said. "I have spoken to some German experts who would be in favor," said Berlusconi, leader of one of two main parties backing pro-European Prime Minister Mario Monti.

The 75-year-old media magnate, whose People of Freedom party (PDL) lost heavily in local elections last month and has been shedding supporters steadily over the last year, is increasingly targeting the euro in a bid to regain popularity.

With less than a year before the next general election, Italy faces the prospect of at least two large parties running on an anti-euro ticket.

The Five Star Movement led by comedian Beppe Grillo, who urges an exit from the euro, has overtaken the PDL according to recent polls to become Italy's second largest party, with more than 20 percent of voter support.

The pro-devolution Northern League also often expresses skepticism or hostility about the single currency.

The Taboo of the Euro

Please consider The Taboo of the Euro on Beppe Grillo's Blog.

When the Euro is put under the spotlight, the indignant reaction is a chorus of "We cannot leave the Euro", as though Europe is identified with the Euro. It's possible to serenely remain in the EU without having to do without one's own currency. Of the 27 States making up the EU, ten have kept their currency, including Great Britain, Sweden, Poland, the Czech Republic and Denmark who are not risking any default. Another trick is the repetitive use of the term "single currency". There's is absolutely no single European currency. The Euro is limited to 17 States and those who are outside are taking good care not to enter the Euro zone. Who in Europe, is today in crisis? Right at the top are those countries with so-called "weak" economies that adopted the Euro.

To remain in the Euro we are starving the country, strangling the companies, transferring the private wealth to cover the interest payments on the public debt that is (unfortunately) in Euro. If it were in lira we could resolve the problem of the debt with the devaluation of our currency.

Italy is gasping like a beached whale. If to remain in the Euro and pay the interest on the debt to the banks, mainly German and French, we have to kill the economy of our Country, perhaps it's appropriate to stop and reflect. Especially if the public debt and the spread are increasing anyway while we are being strangled. The Euro must not be a taboo.

Five Star Movement

Outside Italy, very little attention has been given to Beppe Grillo and his Five Star Movement. Yet the Five Star Party is now the second largest party in Italy.

PDL, is now the third largest party and Berlusconi is now anti-euro, as is the Northern League. These are very significant events.

For more details, please see Six Reasons Why Italy May Exit the Euro Before Spain; Ultimate Occupy Movement.

Also note Monti Begs Germany to Stabilize Interest Rates; Merkel Pours Cold Water On "Theoretical Discussions"; Italy Official Denial #1; Why Monti's Days Are Numbered.

"See you in the next Parliament" Beppe Grillo said after the local elections in May. I repeat my position: Let's hope so.

By Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management . Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Visit Sitka Pacific's Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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