Tag Archives: economy

Italy with a new parliament: what about the risk of instability?

9 Mar

When the politicians promises are addressed to the voters waving rights / duties, ie principles that refer to philosophy, the disaster is announced. Concrete solutions can only be achieved by taking into account also economy and technics: the triumph of politics is assured only if voters and elected recall that to link them is the desire for well-being, based on common sense for the common good of any well administred community.


Yesterday the European Commission chaired by Valdis Dombrovskis announced that it is ready to receive a Economic Financial Paper (DEF) from Italy based on “a scenario with unchanged policies”, as happened in other countries that needed time to form a new executive after the elections.

Three weeks ago, our Parliamentary Budget Office in the last Focus on public finance announced that, “as in the past year, in the European surveillance area, the request for corrective measures that bring the balance back to a level consistent with compliance with the rules “.

In other words, the reality is in two chances: or the actual but residual Gentiloni’s government issues a “no policy change DEF” (since it can not do otherwise, being interim), but this DEF will have to be voted by a parliament where M5S and Lega they have a narrow relative majority, or a new government is formed quickly and has already a shared plan of structural reforms (at least three-year terms) for Italy, that is impossible.

Meanwhile, according to the numbers (Italian and international) and as Dombrovskis predicts, “there are still challenges to be faced”: in Italy we see that growth remains substantially below the EU average, low productivity (that is the cost of labor and services) is holding back growth, the high level of public debt persists and questions remain on the banks, in particular the high stock of impaired loans (Npl), which – apart from the financial exposure and the credit crunch – is tantamount to talking about the efficiency of the PA and the usual and notorius speculators.

It is, therefore, a very bad premise that – not even 24 hours after the European notice – Di Maio announce that the DEF “must be approved by an absolute majority of Parliament, so the Movement will be decisive. This will be an opportunity to find convergences on issues with other political forces. We are already working on a proposal that we will make known in the coming days ».

The M5S economic policy project seems to point to a profoundly modify of the national financial planning of the next three years with the support Lega and other right wing parties, BEFORE any government is installed, transferring items of expenditure from one chapter to another, without have time to accurately verify neither the application regulations nor the actual costs nor – at least – which expenses would be cut and with which consequences for all.

By the way, if no government were to be formed after this ‘shot’ and this  parliament will ‘self-dismiss’ to go to new elections, Italy would end up having to live for months and years with incomplete rules, untold rights and duties, costs and budgets out of control, a restless public opinion.

What would happen if – without a government that would follow with its own decrees and without even agreeing with the trade unions and companies – it is approved ‘on paper’ the minimum wage for those 2.5 million workers among employees, quasi-subordinate and self-employed people who are paid at levels below the contractual minimum and below the poverty thresholds?

And, without a government and without unequivocal accounts, how would the revaluation of the contributory pensions promised by the Lega as the Movimento Cinque Stelle under the heading ‘abolishing Fornero’: the start of a bankruptcy process for our public insurance sistem and its privatization?

We do not risk default, because we have an “adequate repayment capacity” as the rating agencies call it, but different Administrations (even Regions or Comuni ones) could end up in bankruptcy, while public payments would slow down with an increase in undeclared debt, if we shall go in search of the fortune to then stop at the edge of the abyss as happened in Greece.

Since we are talking about a hundred billion in total and a good share of Italians, apart the markets, our spread and Eurozone, Mattarella’s appeal to the leaders arrives punctually: “We still have and we will always have need a sense of responsibility to be able to place the general interest of the country and its citizens at the center”.

In fact, since February 26, our stock indices are going wrong: the FTSEMib has lost more than 3.5%, as the FTSE Italy Mid Cap (-3.09%) and the FTSE Italy STAR (-3 , 55%), while the friction of the military situation in the Mediterranean area is well known to all and it also announced the US-EU commercial war with Italy that exports goods to the United States for over 36 billion euro.

Italy is running the risk to replicate the Greek disaster of the first government of Alexis Tsipras, which lasted the time of a budget six months after starting off with populist ambitions.
By the way, Tsipras today rules again, but he carries out a policy of rigor, with a heavy economic plan to reduce public debt through significant cuts in spending, transfers of public assets and new taxes.


Berlusconi and … his shareholders

4 Apr

The Mediatrade-RTI investigation shows as suspects Silvio Berlusconi, the son Pier Silvio, Fedele Confalonieri, the American producer Frank Agrama and other defendants. They are accused of irregularities in the sale of rights in order to create over 34 million euro of slush funds.

According to investigators the criminal offenses would take place ‘within a system of fraud used by the end of the ’80s, under which the broadcasting rights were provided by Paramount, to a lesser extent by other international producers, rather than directly from suppliers, and were bought by Mediaset at inflated prices through dummy companies due to Farouk Agrama”.

A concealment of funds in full conflict of interest, which took place between Milan and Dublin from July 2002 to November  2005, a time in which Silvio Berlusconi was prime minister.
The fact that they are not mentioned for the two decades prior to 2002 is due to the prescription of offenses  …

According to Niccolo Ghedini, lawyer for the premier, the charges will affect a “time in which Silvio Berlusconi had not the slightest possibility of an impact on the company.”

A likely thing, if we could be sure that Silvio Berlusconi meets the standards on conflict of interest, which, consequently, would “ipso facto” involve the incrimination of his son, Pier Silvio Berlusconi, as it is not possible that top management were not involved in an expedient than ten years.

A “proceeding in which the injured party rather Mediaset is in fact backfires against the company and its top executives,” as claimed by the Berlusconi family’s television network?
Maybe. It would seem possible: it could be not the first nor the last time that executives and shareholders are incorrect in this way, scratching profits, which should be back in the budget for new investments or dividends.

However, the process goes as it will go if it will go, but certain facts are really happened.
What’s waiting for Consob (National Commission for Companies and the Stock Market), as RTi and Mediaset are of limited companies?

The investigations, in fact, are clear: someone (Berlusconi, his associates or others) “appropriates a substantial portion of amounts transferred (note: about 70 million euros) from the RTI and Mediatrade to Olympus Trading Company (note: due Frank Agrama) as payment for television rights”.

Considering that Medusa Film SpA (a Paramout competitor) is a subsidiary/associate company of RTI Spa, who protects shareholders and the free market?