Italy closer to the ECB trap

“Mario Draghi, the ECB President, continues to profess optimism that the Eurozone will recover in the 2nd half of this year. Hopefully, his native country is not the basis for this optimism.”

“Last year it stayed within its Maastricht deficit limit of 3% of GDP. Indeed, the government had a 2.2% primary surplus. And yet public debt rose, as a % of GDP, from 127% to 132.6%! Which means that Italy must keep borrowing (in net terms) even if it has the largest primary surplus in the Eurozone and manages to stay within the Maastricht deficit limits. In euro terms, it needs to pay annually 85 billion in interest (on a €2 trillion debt) of which it must borrow €50 billion.”

“From this perspective, the Renzi government, but also its neoliberal detractors, are in a bind. The only solution (i.e. in confronting Merkel) is outside their remit and imagination. Thus, they keep falling deeper and deeper into the vortex. Meanwhile, Germany’s polity shows no signs of even an interest in discussing the substance.”

Source:

http://macrobits.pinetreecapital.com/italy-now-eurozone-weak-link/

“... we should expect a new attack quite soon against the spreads of Spain and Italy, forcing these countries to turn to ECB permanently as the exclusive source of funding, which means that they will adopt new austerity measures and further dismantling of the social state and labor rights, as required by the banks and multinational cartels and as it happens again and again in Greece.” http://failedevolution.blogspot.gr/2012/09/lea-jacta-est-by-emperor-draghi.html “Α short story of how a country can be loaded with 40 billion euros additional debt in just one day” http://failedevolution.blogspot.gr/2013/12/when-monti-bowed-to-banksters.html “Draghi's latest moves (http://www.bloomberg.com/news/2014-09-04/draghi-sees-almost-1-trillion-stimulus-with-no-qe-fight.html) confirmed two things: First, the hegemony of the banking elite is established for good in the eurozone area. Second, more money will be circulated amongst the strongest financial institutions with the heavily suffered real economy begging one more time for cash.” http://failedevolution.blogspot.gr/2014/09/the-emperor-spoken-again.html “We will start with Italy and Spain. We will order rating agencies to attack, exclude them from markets and throw them to the ECB trap. They will be forced to take similar measures, as Greece did, in order to receive liquidity. Then, we will attack France and Germany.” http://failedevolution.blogspot.gr/2013/12/an-imaginary-dialogue-between-bosses.html