Italy to challenge Euro austerity

The new 5 Star/Lega government agrees about more than its critics thought it would. The two parties both think Italy has faced too much austerity from the EU and needs to spend more and tax less. They both think there are too many migrants entering their country, and want to see tougher controls over migration. They both think the Italian state debt is too high and some of it should be cancelled. Both want to put Italy first. Both challenge the German view of the Euro scheme, which refuses to transfer money from the rich parts of the zone including Germany to the poor parts of the zone. As a result we have had a series of  Euro crises in stressed countries.


The worst of these crises so far were in Cyprus and Greece. In each case the commercial banks were unable to honour requests to withdraw Euro deposits, because the Central Bank refused them the cash they needed. In the case of Cyprus the Euro there was slashed in value if you held a deposit over a certain size. The Euro has been more stable and its value stronger more recently thanks to the Target 2 balances. Germany and the other surplus countries now deposit their surpluses at the Central Bank for zero interest with no repayment date. The ECB lends the money on to the stretched banking systems of the deficit countries for zero interest. The ECB also helps countries like Italy by buying up large quantities of their state debts to keep their costs of borrowing down.


Italy has now hinted that the ECB should write off the state debt Italy now owes it. The ECB disagrees. Italy thinks there should be some sharing system around the zone, allowing her to spend more and tax less. Germany disagrees.

It is likely Italy will set a budget which challenges the rules of the zone. The row may then lead on to doubts about the Target 2 system and the sustainability of this borrowing based model. Within the UK currency zone the rich parts send large amounts of money to the poorer parts. They pay more taxes, and the lower income areas get more in  benefits, Council grants and general public spending per head. The Eurozone has no such mechanisms. Italy may be about to wobble the consensus which is based on extend and pretend. The ECB lends on surpluses from rich countries to poor countries, claiming it is temporary and will be repaid. It is best not to probe this too much.

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  1. Lifelogic
    Posted May 27, 2018 at 5:36 am | Permalink

    Indeed. It it surprising how depressed Italy actually is, with perfectly good two bed flats available in quite pleasant areas of northern Italy not far from (for example Lake Garda) for less than 30.000 EUROs and house for less than 100,000. Cheaper still on other areas. They also have absurd and hugely damaging letting laws that deter people from letting properties out. This as they can never be sure of ever getting the property back again. In the insane Miliband (election tomb stone) and the Jeremy Corbyn mode of government organised theft off property owners who let property out to provide housing for people.

    I had missed the fact that of the nine people that Theresa May elevate to the Lords that only Peter Lilley was sound on Brexit. Can anyone now have any doubts about what T May is actually up to? She is another (like Cameron) where you have to look at what she does not what she says – as the two diverge hugely.

    Jeremy Hosking, a financial backer for the Tories is surely spot on in the Telegraph and Podcast (Chopper’s Brexit Podcast). This Government’s Brexit ‘incompetence’ is May’s ‘strategy’ to keep Britain tied to EU. This appalling socialist remainer dope and her desperately incompetent and hugely over taxing remainer chancellor really must be ousted as soon as possible. No change no chance.

    • Peter
      Posted May 27, 2018 at 5:58 am | Permalink

      May and company are not going to be ousted though. That has been obvious for a long time. She now thinks Leavers have nowhere else to go.

      The only hope left is that the EU overplays it’s hand to such an extent that the demands it makes are impossible to sell to the British public,

      • eeyore
        Posted May 27, 2018 at 6:58 am | Permalink

        Another school of thought holds that Mrs May really hopes for a No Deal outcome but, being unable to provide one herself, wishes it to be forced on her.

        When this sort of kremlinology is invoked to interpret the policy of HMG we really are in tinfoil hat territory. What’s happened to Burke’s sage dictum that “the best policy for any government is simplicity of heart”?

      • Peter
        Posted May 27, 2018 at 8:56 am | Permalink

        “The Prime Minister is the most impressive and dutiful leader that this country has had,” says @Jacob_Rees_Mogg

        Quod Erat Demonstrandum

        (So much for the Leavers champion)

        • Bob
          Posted May 27, 2018 at 7:47 pm | Permalink

          Tory MPs allowed a PM who had so comprehensively bungled an election campaign to oversee #Brexit.

        • Lifelogic.
          Posted May 27, 2018 at 8:55 pm | Permalink

          If you want to become leader that is the best approach to take he does not mean it. He even compared the socialist, robotic, halfwit, May to Geoffrey Boycott! More like Mr Bean but without the humour.

          Boycott would be a far better PM as would most sensible people.

        • Stred
          Posted May 28, 2018 at 4:24 am | Permalink

          Possibly, the country he meant is the EU.

        • mancunius
          Posted May 28, 2018 at 5:13 pm | Permalink

          ‘dutiful’ certainly – the question is, to which emperor is the vassal’s duty being paid?
          I think I can guess. The woman who told us she was ‘going to make a success of brexit’ has actually made a success of making a failure of it. Which – who is to know? – may well have been the plan all along.

      • DominicJ
        Posted May 27, 2018 at 9:22 am | Permalink

        I’m in my 30’s
        I’ve voted conservative in every election to date

        If may fudges Brexit, I’ll vote for whatever donkey is wearing a red rosette.
        If Corbyn gets in and nationalises the assets of the rich remainers, so be it.

        • Adam
          Posted May 27, 2018 at 8:06 pm | Permalink

          DomonicJ: Voting for the better party is more likely to deliver the outcome you would prefer, than loosely revenge-voting against a former leader’s lack of performance.

      • Rien Huizer
        Posted May 27, 2018 at 1:27 pm | Permalink

        There is no need to sell anything to the British public. The Will of the People will be done, Whatever that will is, is at the discretion of the government of the day.

        • TR
          Posted May 27, 2018 at 8:23 pm | Permalink

          I know you don’t understand British democracy so I’ll spell it out for you EU troll. The people are sovereign, Parliament sought their opinion in the referendum and should carry out their wishes.

        • Edward2
          Posted May 27, 2018 at 9:24 pm | Permalink

          Well as far as the referendum is concerned that means actuaĺly leaving the EU.
          Our PM stated several times that the Government would enact the decision of the people.
          If this lot renege on that promise, the connection and trust between our elite and us, will be forever one of mistrust.

          • Dennis Zoff
            Posted May 28, 2018 at 1:26 pm | Permalink


            I concur with your sentiments….

            “the connection and trust between our elite and us, will be forever one of mistrust.”

            However, I do not understand what so-called “elite” means with reference to “us”? Are elites more intelligent, better educated, more gifted, more financially robust, more sensible/sensitive, more articulate, more honest, greater integrity….

            I have yet to meet an individual that fits the above description in its totality….and would submit that elites in all guises are no better than the so-called common man/woman…..or person, to be perhaps more politically correct…these days?

            This socially engineered subservience (by elites) is wholly demeaning to us plebs! Now we have seen the worst excess of so-called elite’s callous nastiness, in the run-up to Brexit and beyond, perhaps we can find an alternative descriptive euphemism for elites?

          • Edward2
            Posted May 28, 2018 at 8:03 pm | Permalink

            Elite was a shorthand for the various CBI, Civil Servants, Lords, Charity sector execs, Public sector execs, media execs and quangocrats who whilst unelected, think they know what is best for us ordinary voters.
            They are a mob and their smugness and power is growing.

          • Dennis Zoff
            Posted May 29, 2018 at 1:16 pm | Permalink


            Quite so….though your shorthand for elites was rather polite! };O)

        • Mitchel
          Posted May 29, 2018 at 10:32 am | Permalink

          That sounds very much like Lenin’s “democratic centralism”-not much of the former,plenty of the latter!

      • TR
        Posted May 27, 2018 at 2:54 pm | Permalink

        The fun will start when Parliament approves the negotiated agreement with the EU. People are starting to get very very angry about the impending Brexit sell-out.

        • Leslie Singleton
          Posted May 27, 2018 at 9:04 pm | Permalink

          Dear TR–Any chance Brits so inclined could somehow team up with likeminded Italians and together blow the whole ghastly EU skyhigh? No, I do not think it would be easy but a man can dream.

          • Adam
            Posted May 28, 2018 at 9:15 am | Permalink

            Selective boycotts exert powerful leverage, Leslie, & can be enacted jointly internationally, within minutes via social media.

        • rose
          Posted May 27, 2018 at 10:26 pm | Permalink

          We have just had a dress rehearsal this weekend of how this anger would be dealt with: selective arrest and imprisonment; blackout of all news; internet interference. So there will be no communication at all when people want to resist the betrayal.

          • TR
            Posted May 28, 2018 at 7:35 am | Permalink

            They can’t arrest and imprison everyone. Resistance can be passive. There’s plenty that can be done and police lack the necessary resources and nous to do much about it.

          • Peter
            Posted May 28, 2018 at 8:08 pm | Permalink


            Looks like this is another taboo subject on here though.

          • Peter
            Posted May 28, 2018 at 8:15 pm | Permalink

            TR also agree, but Common Purpose ‘Thought Police’ will still try to suppress perfectly legal but unwelcome dissent.

            Fortunately their efforts often backfire and only create more publicity.

          • rose
            Posted May 28, 2018 at 8:18 pm | Permalink

            What has been so shocking this weekend has been having to go to American and Canadian sites to find out a smattering of what is going on. It is almost like a power cut.

    • agricola
      Posted May 27, 2018 at 7:51 am | Permalink

      Should sufficient leave Tory MPs not have the courage to initiate the removal of Mrs May and her remain coterie in the Cabinet and the Civil Service, those 17.4 million who voted leave will have been unforgivably cheated. Whatever fudge the woman is trying to cobble together will spell the end of the conservative party in the next general election. Well John you have about four months to get it sorted. Frankly I am appalled at the way your fellow politicians are behaving.

    • old salt
      Posted May 27, 2018 at 8:06 am | Permalink

      Dan Hannan on TV – G.E. to break Brussels logjam.
      Remember – two thirds constituencies voted Leave.

      • Andy
        Posted May 27, 2018 at 7:35 pm | Permalink

        Not in June 2017 they didn’t.

        • TR
          Posted May 27, 2018 at 8:25 pm | Permalink

          ‘Leave’ was in manifestos of Tories & Labour so over 2/3rds of constituencies voted for leave parties.

        • Leslie Singleton
          Posted May 27, 2018 at 9:08 pm | Permalink

          Darling Andy–What about with a Manifesto that isn’t suicidally stupid?–All or most, even you I suspect, agree that if the last Manifesto had been blank she would have walked it

        • Edward2
          Posted May 27, 2018 at 9:27 pm | Permalink

          But the election wasn’t focussed on the EU, leaving had not really begun.
          Both Labour and Tories promised in their manifestos to respect the result of the referendum.
          The 2017 election was about traditional issues.

      • Stred
        Posted May 28, 2018 at 4:34 am | Permalink

        This would be an election with few Leavers to vote for. Central Office would see to that and Labour has the Starmer and Chukkas plus the international Marxists. And the civil service will still be refusing to install WTO systems to operate checks at ports.

    • No bungling burglars
      Posted May 28, 2018 at 9:37 am | Permalink

      Lifelogic. I had a friend or two who lived and worked in Italy. It got progressively worse in terms of crime and corruption from what they told me. I really wouldn’t know about “good areas” there. Such areas are a increasingly mythical domains here in the UK too. Criminals travel miles and know a good area when they see it. Many criminals live in those areas for crime is successful…and few successful people report expensive goods and money they shouldn’t really have when burgled, mugged, or conned.

  2. Adam
    Posted May 27, 2018 at 6:09 am | Permalink

    Italian citizens should be free to re-grasp control of their own country. Then can then proceed gently along the shortest path to better. Many British folks may be willing to favour purchasing Italian output to assist them on their way back to the freedom & dignity of independence.

    • Lifelogic
      Posted May 27, 2018 at 7:06 am | Permalink

      Italy does now, very sensibly, have very little inheritance tax at all and a new Non Dom regime with a sensible tax cap of 100K euros (even including returning Italians).

      Unlike the UK where Hammond is damaging the UK economy hugely by idiotically chasing the rich and Non Doms away. This by stealing 40% of them on death (over just £325K) and by taxing them into leaving, dis-investing or not coming at all.

      Why is he being such a vandal to the UK economy? What does he think is being achieved?

      • Adam
        Posted May 28, 2018 at 8:16 am | Permalink

        In response to your asking why, Lifelogic: It is unlikely that Mr Hammond’s chancellorship is a plant, as if the achievement of an enemy with a decades-long subtle plan to vandalise the UK. He probably thinks better financial performance is being attained, or shall be. Opinions vary about people in high office; mostly negative from those in opposing parties.

      • NickC
        Posted May 28, 2018 at 12:07 pm | Permalink

        Lifelogic, “What does he think is being achieved?” Remaining in the EU, or in parts of it? Running the economy as though we were remaining in, plus time and salami slicing, ensures we will never actually Leave. That’s what his aim is.

    • fedupsoutherner
      Posted May 27, 2018 at 10:10 am | Permalink

      Adam, If it takes buying Italian produce then I’m in. Anything to help people get out of the clutches of the EU. I cannot understand how remainers cannot see what is happening and what the EU is really all about. Absolute power for Germany.

    • L Jones
      Posted May 27, 2018 at 12:25 pm | Permalink

      Good thinking, Adam. It may be they manage to shake off the EU shackles before WE do!

    • Rien Huizer
      Posted May 27, 2018 at 1:29 pm | Permalink

      Of course, but at what cost to them?

      • Briton
        Posted May 27, 2018 at 11:44 pm | Permalink

        Rien, you really have not got it have you! We did hear about “costs” pre-referendum. Many Leave voters believed them and still voted Leave. Many car workers “Up North” actually believed they would 99% lose their jobs,if they voted Leave. They voted Leave. Nothing, nothing ,nothing will stop us getting our country back! Understand us!

    Posted May 27, 2018 at 6:29 am | Permalink

    Of course, the real aim of the euro-fanatics ever since the days Jean Monnet (“I have always believed that Europe would be built through crises”) has been to create a European empire by stealth. Monnet, one of the EU’s founders, thought that economic crises should be welcomed as opportunities to bring the states of Europe closer together, give up sovereignty, and gradually move to a federal Europe.

    He wrote in 1952: “Europe’s nations should be guided towards the super-state without their people understanding what is happening. This can be accomplished by successive steps, each disguised as having an economic purpose, but which will eventually and irreversibly lead to federation.”…..

    This is from a recent article I was reading. It is disturbing that some think in this way. That deception is part of politics is beyond question but to embrace wholeheartedly in this manner to deceive millions of honest people defies belief

    And Target2 is a ticking time-bomb and an admission that transfers between creditor-debtor EZ nations is a sticking plaster on a system that requires full fiscal and monetary union to operate successfully

    If at anytime in the future the German economy falters then this pack of cards they call the Eurozone (and T2) will come crashing down. Germany is the sun around which all others EZ member states revolve

    The question is will Italy or Poland sacrifice their fiscal and monetary powers for total integration? I doubt their respective peoples will tolerate such a total loss of control and sovereignty. Italy would cease to exist. Is that what people really want?

    What is becoming obvious is that this PM is making fools of the British people. I don’t like her, her politics, her behaviour and her style. She’s a charlatan and the sooner she’s deposed the sooner we can take back our sovereignty and control of our country

    • NickC
      Posted May 28, 2018 at 12:34 pm | Permalink

      Duncan, Target 2 (T2) was originally just an intra-EZ payments system. However, because the liabilities and assets are never settled up at the end of the year by the ECB, it has developed into an effective vehicle for wealth redistribution within the EZ.

      The Euro will survive because the required wealth transfer system is now in place. The only (slight) political hurdle is convincing ordinary Germans that they should accept it. Time and salami slicing will see to that. The EU always seems to have a remedy waiting in the wings for each crisis.

      That comes back to why we will never leave the EU under the current government (or under Labour for that matter). We need “escape velocity” to leave the EU. We would have to act faster than the EU can react. Speed is the essence. But Mrs May has successfully dithered, appeased, and delayed so that we have already lost that opportunity.

      • hans christian ivers
        Posted May 28, 2018 at 9:07 pm | Permalink


        Your illusions and lack of facts about the EU are just mind bugling

        • NickC
          Posted May 29, 2018 at 10:29 am | Permalink

          Hans, Perhaps you can highlight my “errors” and cite sources for your contentions? Otherwise you are just a waffling Remain.

    • Dennis Zoff
      Posted May 28, 2018 at 2:22 pm | Permalink

      Nicely put Duncan…succinct and to the point!

      1. T. May out
      2. Brexit PM in
      3. Assemble a team of Leavers that will execute the will of the people
      4. Ignore Remainers, Lords, et al
      5. Renegotiate a reasonable and equitable trade deal, with no insidious EU apparatus leftovers by 19th March 2019 or revert to WTO immediately
      6. Post-WTO, negotiate a new relationship with the EU as equal entities
      7. Recreate a new Conservative Party that benefits all citizens


  4. alan jutson
    Posted May 27, 2018 at 7:05 am | Permalink

    Italy want debt/borrowings with EU cancelled, meanwhile we offer EU more money for nothing ?

    Who are the stupid ones ?

    Not a lot more to say really.

  5. Bryan Harris
    Posted May 27, 2018 at 7:15 am | Permalink

    Italy has a good head of steam on this, and a united one…they may actually achieve something.
    I’m not so sure it has any impact on what is happening with BREXIT, but oh for some strong leadership on our side….. Towards the end of last year, Ms May had the opportunity to make a real success of BREXIT – My suggestion then was to make someone like Jacob Rees-Mogg deputy PM, in place of a very silent and invisible one – She could have given him responsibility to make BREXIT work while retaining overall control. It is clear she is not up to the job of dislocating us from the EU, as she has been so deeply involved in it in the past… She really should have stepped back a pace or two.
    When voters fully realise what a sloppy job she is doing, their vengance will be harsh, and if we end up, as a result, with corbyn at number 10 (Hello Venezula, Goodby Great Britain) very few people will ever forgive the Tories. WHY DOESN’T SHE GET THIS

    • Adam
      Posted May 28, 2018 at 9:33 am | Permalink


      Perhaps JRM doesn’t want to be a minister at any level, but he might suit being the official Brexit Steering Adviser, reporting directly to the PM.

      That may function better than Alan Waters’ financial guidance to Thatcher, if it didn’t clash with existing Brexit ministers’ good intent.

  6. Blue and Gold
    Posted May 27, 2018 at 7:27 am | Permalink

    Brexmoaners….all you do is moan, moan, moan, moan , moan. Do you all lie in bed at night and think, what more is there about Brexit, Theresa May, the BBC, The Lords can I moan about?,

    CHILL…..local government affects your life far , far more than the EU ever will.

    I worry about the health of contributors to this site. You are NOT going to get the Brexit that you wanted so get over it.

    • Edward2
      Posted May 27, 2018 at 9:29 pm | Permalink

      On the other hand….you B and G seem very focussed on this issue.
      Perhaps you need to keep calm.

    • Pragmatist
      Posted May 27, 2018 at 11:37 pm | Permalink

      We are not moaning on a Remainer site. We won the Referendum. We have no need to troll the whole of the internet in wolf cub packs trying to convince everyone. There are young remoaners in my town who plan which sites to blitz and which blogs to blitz. Making a nuisance of yourself won’t change anything. We are leaving. Get your EU passports and seek pastures new.Italy looks good at this time of year, with the light behind it. and enough money to buy a ticket back home to the UK.

      • Blue and Gold
        Posted May 28, 2018 at 10:38 am | Permalink

        Typical reply from a Brexmoaner. You have no serious answers to the chaos this Did-United Kingdom is in.

        • Edward2
          Posted May 28, 2018 at 8:07 pm | Permalink

          Low unemployment, decent growth, decent export figures, millions wanting to come here and live, record numbers in work and earnings rising again after Brown’s disaster as PM.
          Your propaganda is not supported by any of the data.
          Your project fear predictions failed and are still failing.

        • NickC
          Posted May 28, 2018 at 9:26 pm | Permalink

          B&G, The serious answer is that Remains should quit blocking Leave. There would be no chaos then.

    • Bryan Harris
      Posted May 28, 2018 at 7:26 am | Permalink

      What an inane post – socialists and remoaners always attack individuals, and nevr post anything useful.

      As for diverting attention to local government – another falsehood… The EU is becoming the new USSR we always knew it would, and that should be enough to keep any rational person awake

    • Dennis Zoff
      Posted May 28, 2018 at 2:39 pm | Permalink

      Blue and Gold

      Calm down, don’t become hysterical….losing is hard, but try to be grown up and get past your deep-rooted personal disappointment and move on, it is not the end of the world! Though it is amusing to watch your ever stronger protestations, which is proof positive Leavers are winning the argument and this is getting under your skin.

      Additionally, it must be ever so frustrating to realise the vast majority here do not take you seriously…or any other Remoaner childish behaviour?

      Tally-ho old chap

  7. Richard1
    Posted May 27, 2018 at 7:30 am | Permalink

    It is going to be fascinating to watch how things play out in Italy. My guess is it will be like Syriza in Greece – a lot of sound and fury, but in the end this Italian Government will cave into the EU. The only solution for Italy, if Germany / the EU won’t agree to major transfers and / or debt write-offs, is of course to leave the Eurozone (which at the moment means automatically leaving the EU) so they can run an independent economic policy. But from within the Eurozone that is surely a much bigger step than it is for the U.K. – and even here we see how political will has crumpled in the face of the implacable imperial power of the EU.

    I note in Italy we see the opposite of what is alleged to be the case in the U.K.: the young people all want to get out of the EU, but the old are holding back.

    • Pragmatist
      Posted May 27, 2018 at 11:31 pm | Permalink

      The old in Italy haven’t just seen it all before, but all, all, all, all all, before in eternal cycles of insecurity. This EU thing is just another bout of change. They have pensions to worry about and their possible real worth ongoing. Historically Remain or Leave, it doesn’t matter, it will be a disaster for Italy. However if they joined us somehow…who knows..the historic theme of a country can change.

  8. agricola
    Posted May 27, 2018 at 7:35 am | Permalink

    Yes the Euro Zone is in a mess, because it does not have the political structure to allow it to run as a single currency entity. Unlike the USA or UK. I question whether it ever will have because the German people, the wealth generators, resent paying their hard earned taxes to what they see as basket case economies, lacking in the level of financial discipline the Germans would impose upon themselves were it necessary, witness the integration of East Germany. Out of political necessity their government pretend that the money they lend at no interest to the ECB will eventually be repaid. It will not, because those in receipt of it see it as a gift, which in reality it is. The ECB are running it as if it were one political entity , but it is not. They must either make it a USEU or let Italy revert to the Lira. Question, how much does the ECB owe the UK.

    My greater concern is the total vacuum of resolve and lack of clarity on Brexit from Messrs May and her team. We should be spelling out what we want in terms of trade, the Irish border, and financial services plus myriad other areas of cooperation, all of which are of benefit to the EU as well as the UK. We should make clear the WTO option as of March 2019 with no further payments to the EU. Your choice Barnier, this is the way it is going to be, end of discussion.

  9. A.Sedgwick
    Posted May 27, 2018 at 7:36 am | Permalink

    I expect this to be another EU groundhog day. The Greek government talked tough but backed down and stayed in the Euro and almost certainly suffered too much by not getting out. Like Greece Italy has/had a lot of investment potential as an independent state but their chaotic politics and clinging on to the Euro will unfortunately continue. It is revealing that none of these populist parties offer an in/out referendum, maybe not given the Brexit farce.

  10. Peter Martin
    Posted May 27, 2018 at 7:45 am | Permalink

    The new German FDP leader is issuing warnings about a “transfer union through the back door”. But every currency union has also to be a transfer union. It’s about time that the German economic establishment understood that. Money will always gravitate to the more prosperous areas in any single currency zone. In the UK this is obviously London and the SE of England.

    The job of Government is to equalise the economy by fiscal means. Otherwise everyone just ends up moving to London and the SE of England which isn’t good for anyone. Including the people who already live there. Is the German establishment saying that everyone should leave Greece, Spain, Italy and Portugal etc and move to Germany?

    • mancunius
      Posted May 28, 2018 at 5:31 pm | Permalink

      Germany wants an EU that enforces German rules on all, but also retains the right to have a a proud, individual, self-serving German nationhood. You hear the words ‘German’ and ‘Germany’ all the time and everywhere in Germany, in every walk of life.
      ‘Europa’ is reserved for carefully-phrased press releases.
      Merkel’s catchphrase ‘Whatever is good for Europe is good for Germany’ is intended to mean the opposite, for she knows Germans would never put up with the financial sacrifices of a debt transfer system without which the eurozone will collapse completely.
      Those who applaud her in the Bundestag (and the adulation needs to be heard to be believed) are experts in the gentle art of credulity and temporisation.

  11. Andy
    Posted May 27, 2018 at 8:36 am | Permalink

    Imagine a Brexiteer wet dream for a minute – it’s 2018 and there is no EU but everything else is the same. There is still mass instability in the Middle East and North Africa – including wars in Syria, Yemen, Libya, Sudan and others. There was still the worst global recession in a century in 2008. How different would things be in Italy?

    Without an EU there would still be a migration crisis but Italy would have to deal with more of it alone. Millions of people fleeing conflict in Syria, Yemen etc would still be turning up and Italy would be one of their man destinations. But Italy would face that challenge alone.

    Same with austerity. We have seen it here in the UK. Austerity has not worked. It’s 10 years since the economy crashed austerity has not worked. Sure the deficit down but our hospitals are shocking, so are our schools – look at the state of our roads. Productivity has slumped. We actually need to invest to grow and we are cutting cutting cutting. Italy would do the same.

    The only practical difference that being EU has made to Italy is that it has more help and more support dealing with issues it would have to have dealt with alone.

    • Alison
      Posted May 28, 2018 at 8:36 am | Permalink

      Andy, no, there would not still be a migrant crisis akin to the ones we see today and over the last few years. The migrants flood in to the EU, because it doesn’t matter at what point they enter, once in, they have unchallenged movement within the Schengen area.
      Because they came in their hundreds of thousands, the infrastructure couldn’t cope. Often they came in overloaded and/or unsafe vessels, so needed humanitarian care. So they come in hundreds of thousands, every year. I repeat, it is because they know that once in the EU, they can make their way to Germany, Sweden, the UK. You ask them, that is the answer. It’s more difficult to get to the UK, of course – water, and no Schengen.

      I’m sure you know that French authorities have even given illegal migrants free train tickets to Calais?

      • rose
        Posted May 28, 2018 at 8:20 pm | Permalink

        And Italians put them on trains plus papers for Paris.

    • Edward2
      Posted May 28, 2018 at 10:34 am | Permalink

      You are remarkably relaxed about the economic struggle Italy has suffered recently and the large numbers, particularly young people, made unemployed.
      The Euro is a major cause of their difficulties, because if Italy had kept its own currency it could have controlled money supply, controlled interest rates and allowed the Lira to float.
      The Euro value is set mainly by the excellent performance of Germany which is about 40% too much for Italy.
      It seems you think austerity is fine for Italy but not for the UK.

    • libertarian
      Posted May 28, 2018 at 2:33 pm | Permalink


      The EU’s response to the refugee crisis?


      Oh do you mean opening more ghetto camps like Sangatte ?

      Austerity is an EU policy Andy, bought about when your generation crashed the Financial system.

      Government spending in the UK has RISEN every year since the end of the war. We spend 40% of GDP on government

      Maybe government ought to stop wasting money… like i dunno sending £13.1 billion per year to Brussels

      The Italian economy has been tanked by the Euro

    • mancunius
      Posted May 28, 2018 at 5:35 pm | Permalink

      The EU has screwed Italy right royally over the immigrant issue, and all the Italians know and proclaim it.
      Maybe you should visit some of these European countries you pontificate about. You might even bother to learn one or two of their languages, something I find most remainers refuse to do, taking the blithe view as they do that speaking very loudly in English and waving an EU passport will suffice them in terms of life-skills.

      • David Price
        Posted May 29, 2018 at 6:35 pm | Permalink

        I visited Rome a couple of years ago on business. Inside the old city it was beautiful but a couple of stops out along the Via Casilina everything was covered in graffiti. Heartbreaking. The EU and euphilic immigration and economic dogma has a lot to answer for.

  12. Alan
    Posted May 27, 2018 at 8:50 am | Permalink

    But were we not all persuaded by Mr Redwood, during the referendum campaign, that the EU was taking part in a wild ride towards a fully integrated superstate? It seems now that Italy is acting independently. Perhaps the wild ride to the superstate was not an accurate prediction. Maybe we could have stayed in the EU and pursued an independent path, keeping our own currency, not joining Schengen, etc, etc and enjoyed the many advantages without suffering from any disadvantages. Unlike Brexit, where there are only disadvantages.

    • Leslie Singleton
      Posted May 27, 2018 at 9:17 pm | Permalink

      Dear Alan–Not even close–Most of us detest having people we cannot get rid of whose names we can neither spell nor pronounce from places we couldn’t find on a map telling us what to do and that is just for starters

      • Andy
        Posted May 28, 2018 at 8:23 am | Permalink

        If you can not find a place on a map that is your problem, not theirs.

        Likewise if you can’t spell their name that is your fault.

        Your ignorance makes you angry. And that sums up Brexit.

        • NickC
          Posted May 28, 2018 at 9:36 pm | Permalink

          Andy, From someone like yourself who spends his time being red-in-the-face angry about Leave, perhaps it is your ignorance? That sums up Remain: perpetually angry about people voting “the wrong way”. And of course your special bigotry: hatred of elderly leave voters, even though they were only a fraction of the 17.4 million.

      • mancunius
        Posted May 28, 2018 at 5:42 pm | Permalink

        Whereas remoaners detest electorates they cannot get rid of voting in large numbers to make majority decisions – particularly when they live in places in the north that remoaners can neither spell not pronounce nor find on a map – Remoaners just love telling us what to do. And not just for starters.

    • rose
      Posted May 28, 2018 at 1:49 pm | Permalink

      We are witnessing yet another EU coup d’etat in Italy, at this moment.

  13. IainL
    Posted May 27, 2018 at 9:12 am | Permalink

    The EU is such a large and diverse bloc there are always going to be problems..last year it was Greece, sometimes Cyprus, Hungry and Poland, and now Italy..that is the make up of the beast.. the UK will leave soon, some other country will join..we had better watch out for ourselves instead of looking at Italy. This morning on Marr show Rees-Mogg was going on about how we need a deal with the we are already a part of the EU ..but now wanting to leave as per the peoples referendum vote and now again Rees-Mogg wants another deal..I just don’t know where all of this is going to end

  14. Lifelogic
    Posted May 27, 2018 at 9:45 am | Permalink

    Rees-Mogg is to buy a £5 million property near parliament I read. Hopefully he has remembered the absurd figure of nearly £750,000 he will have to pay in Hammond’s moronic stamp duty turnover tax. Then perhaps capital gains tax (perhaps as a second home, if it makes any after that stamp duty) at 28%. This even on non real gains, then the 40% capital IHT tax on it eventually. And then the new buyer will have to pay even more stamp duty!

    Hopefully Mogg will get to be PM very soon, fire the dire Philip Hammond and move the UK to a sensible pro growth, pro jobs and pro investment tax, regulatory and cheap energy regime.

    • hans christian ivers
      Posted May 27, 2018 at 8:09 pm | Permalink

      and then we will have Labour in power really well done

    • Stred
      Posted May 28, 2018 at 4:49 am | Permalink

      The property may be an office. The market killing stamp duty is for housing? He could use it as a new HQ for Conservatives for what the people voted for.

  15. bigneil
    Posted May 27, 2018 at 10:07 am | Permalink

    ” within the UK currency zone the rich parts send large amounts of money to the poorer parts. They pay more taxes, and the lower income areas get more in benefits, ” . . . .so where is the sense in importing more of the “poor”, who upon arriving in the UK , are getting a relatively massive rise in their living standards, for doing absolutely NOTHING? Straight into a house that is better than what they left, fresh water, electricity, roads, a sewage system, etc. Free healthcare. . . Their lives here have to be paid for somehow. The police, Council services, Army, Navy, etc etc, all getting cuts while at the same time the govt is giving billions away to other countries AND cutting benefits here. Our UK govt is more concerned with funding foreigners who have NO intention of integrating, only replacing.

  16. fedupsoutherner
    Posted May 27, 2018 at 10:13 am | Permalink

    I can’t think why the likes of Andy, Newmania and Talz are moaning on this blog. They are looking as though they will get what they want. Remaining in the most corrupt and nasty club in Europe.

    • Andy
      Posted May 27, 2018 at 7:40 pm | Permalink

      I don’t want to remain in the EU. If we stay in you lot and your decandents sill be whinging forever. I want your Brexit to happen. I want it to fail spectacularly- and then, having permanently crushed you, I want us to rejoin. This is a war and nothing short of total annihilation of Brexiteers ideology will now do.

      • Turboterrier.
        Posted May 27, 2018 at 8:06 pm | Permalink


        Are you one very sad person full of hatred and you are bring up kids? God help the world let alone the UK

      • Fedupsoutherner
        Posted May 27, 2018 at 8:26 pm | Permalink

        Andy, how sad you are that you wish your own country to fail. What makes you think the EU would have us back? Oh, I forgot. All that lovely money we give them to hand over to others.

        • David Price
          Posted May 29, 2018 at 6:46 pm | Permalink

          What makes you think Andy is in the UK?

      • NorthbyEast
        Posted May 27, 2018 at 8:32 pm | Permalink

        Have to say I fully agree with Andy over this..this tory right wing UKIP madness has to be stamped out now and more that this it has to be clearly demonstrated to brexiteers of all shades that there is no other deal or deals out there waiting for us that will in any way compensate for our loss of trade as a full member of the EU and the only way to prove this is to put Rees Mogg in the driving seat asap and wait to see how he gets on. We will then see how the country’s economy will very quickly become severely disrupted and harmed..i believe this will have to happen before some of these deluded extremists see the light. So the only way now is to stand back- the cliff edge – let it happen

        • Andy
          Posted May 28, 2018 at 8:03 am | Permalink

          ‘clearly demonstrated to brexiteers of all shades that there is no other deal or deals out there waiting for us that will in any way compensate for our loss of trade as a full member of the EU’.
          Obviously you don’t know what you are talking about. The UK trade with the EU has been declining for years and we have a huge deficit with them. Have you heard of the Common External Tariff ? There are thousands of tariffs applied to everyday goods – for example did you have a glass of orange juice this morning ? The EU slaps a 16% tariff on oranges, and last time I looked they don’t grow in the UK so why would we want to do that ?
          What we need is a Prime Minister and frankly a Government that believes in Brexit and will deliver what the People decided. We don’t have that, hence we have a complete mess.

        • libertarian
          Posted May 28, 2018 at 2:37 pm | Permalink


          What trade would that be then ?

          Only 9% of UK economic activity is with the EU. If you lack the imagination to work out that an FTA with China or USA would dwarf that , especially if we had both and thats without FTA’s with the rest of the 2.3 billion people in the Commonwealth

          • hans christian ivers
            Posted May 28, 2018 at 9:10 pm | Permalink


            The rest of the of the exporting countries of the EU have been able to do trade with the rest of the World in much bigger volume for the past decade, so why should this suddenly change, it is all a big illusion from your side with no real facts to back it up

          • NickC
            Posted May 29, 2018 at 10:49 am | Permalink

            Hans, You keep criticising others for lack of “real facts”, but you haven’t cited any yourself.

          • libertarian
            Posted May 29, 2018 at 11:37 am | Permalink


            Indeed. Why would it change you ask. Well having FTA’s with places like Australia and NZ would enable two way flows that currently the EU makes incredibly difficult in things like food and wine. The UK is a world leader in the next generation digital services, something the EU is trying to block with their inane regulations. We need to encourage far more export of goods and services its true. I believe that opening up commonwealth markets with Free trade agreements is one way to encourage that

            hans, I like you, youre a nice chap, but pomposity is getting the better of you. For someone thats never posted a single linked fact on this forum demanding others do is fairly typical of the EU approach to things

            By the way any thoughts on once again overturning of Italian democracy for EU wrong think ?

        • mancunius
          Posted May 28, 2018 at 6:02 pm | Permalink

          IainL – Oh dear you’ve forgotten that IainL is your nom-de-plume for today..You dont usually risk two posts on one page, cos its too easy to see what your doing..I suppose its all your punctuation-free multi-postings that confuse you..what happened to Fox and left them out mention of deals..still, you got cliff edge in, ah well theres always tomorrow when you can be somebody else entirely..whats it all coming to is what I dont understand but I expect you do.. :-))

      • Dave Andrews
        Posted May 27, 2018 at 9:15 pm | Permalink

        If Brexit fails spectacularly, it will be the result of a lack of industrial competitiveness, not because of Brexit itself.
        Wait and see whether Britain wishes to rejoin the EU, the mood may be when we look across the Channel that we got out not a moment too soon.

      • Edward2
        Posted May 27, 2018 at 9:34 pm | Permalink

        You call others extremists.
        Yet your post here is an example of that.
        Crushed….total annihilation…..

        • Andy
          Posted May 28, 2018 at 8:26 am | Permalink

          Yes. Crushed. Total annihilation.

          The nationalism and xenophobia of Brexit is dangerous.

          It needs to be totally wiped out.

          And it will be.

          • Edward2
            Posted May 28, 2018 at 8:12 pm | Permalink

            Brave talk Andy
            To the barricades!
            Like most keyboard warriers I doubt you would be there.

            Maybe back at home white wine in hand, big HD TV and a nice wood burning stove.
            We have a Parliament to decide, leave it to them.
            No need for your war.

          • NickC
            Posted May 28, 2018 at 9:50 pm | Permalink

            Andy, It is very apparent that freedom and independence frighten you. But you could have chosen a better Utopia to pin your vain hopes on than the EU. Ideologues like yourself always fail in the end, even though your rigid beliefs bring such misery into the world in the meantime.

      • libertarian
        Posted May 28, 2018 at 2:39 pm | Permalink


        Careful hans christian Iver will be along in a minute to tell you off for using such intemperate language . Oh no he won’t because like you he’s a Lib Dem etc

  17. Jacey
    Posted May 27, 2018 at 10:19 am | Permalink

    Some commentators on Brexit have patently failed to undertake any detailed examination of the structure and mechanics of the EU apparently equating its level of virtue with that of motherhood and apple pie. The new government in Italy may cause some of this structure and mechanics to be examined much more carefully. If so it will be interesting to see light shone on corners that have remained dark for perhaps too long.

    • TR
      Posted May 27, 2018 at 8:28 pm | Permalink

      Never heard of Greece then?

  18. Alison
    Posted May 27, 2018 at 10:32 am | Permalink

    Great exposé. If the ECB were to write off Italy’s debt, then Greece and others would be queuing up for the same. Italy, like all the other indebted euro countries, would benefit immeasurably from being out of the euro, with a flexible exchange rate. Interesting times ahead, if the Italian government isn’t cowed by EU manoeuvring and bullying.

    I fear I was boring or not polite enough about Barnier yesterday, so missed the cut. But there was one bit in Barnier’s speech the other day, to European lawyers, that puzzled me I wasn’t sure about its import. May be it’s obvious, but: Barnier said that the UK has accepted the principle of a backstop, to “avoid the return to a physical border and to respect the Good Friday Agreement in all its dimensions”. But then, “We must operationalize this backstop in the withdrawal treaty”.

    A propos, I wish Mr Rees-Mogg weren’t still so dutiful vis-a-vis Mrs May.

    • GilesB
      Posted May 28, 2018 at 3:16 am | Permalink

      Nothing is agreed until everything is agreed

      • alan jutson
        Posted May 28, 2018 at 6:53 am | Permalink


        “Nothing agreed until all is agreed”

        That is what we are being told, but we have been told lots of other things as well. !

        I hope I can believe it !

  19. ChrisS
    Posted May 27, 2018 at 10:35 am | Permalink

    Unless Italy folds in on itself because the electoral arithmetic prevents a government capable of pushing ahead with coherent policies, the Eurozone is heading for its biggest challenge yet.

    The President of Italy is refusing to accept Professor Paolo Savona, a Eurosceptic, as the premier-designate Giuseppe Conte’s nomination for the role of finance minister. It seems unlikely that Mr Conte will back down or, if he does, any alternative he nominates for the post will also be a Eurosceptic.

    Brussels brought about the current impasse when it imposed the unelected former European Commissioner, Mario Monti as Prime Minister in 2011. This directly led to the revolt against the pro-Brussels establishment by the electorate and the Five Star movement and the increase in support of the Northern League is the result.

    However the impasse is resolved, the outcome will not be good for the Euro. Indeed, it could easily lead to the breakup of the currency or the failure of banks all over Europe which will effectively amount to the same thing.

    Due to its fundamental design flaws, there is no flexibility in the Euro system. A fudge and substantial bending of the rules just about got them through the Greek crisis, the approaching Italian one will be too big to handle and could well prove fatal.

    • JW
      Posted May 28, 2018 at 3:36 pm | Permalink

      Let it not be forgotten that in late-2016, the EU-appointed PM Matteo Renzi attempted to hijack the Italian constitution. Outwardly – as these power-grab moves always are – the move was sold as a tool for economic reform……..

      ………however, success for Renzi would have cemented a lot of unaccountable power in the hands of a pro-EU/euro establishment in Rome, who would then have gone about making it almost impossible for a Brexit-type situation to materialise…..

      ……sensibly, the Italians firmly rejected Renzi and his EU-generated proposals by 60:40…… the 2018 election there was a 73% voter turnout, and anti-EU parties took 64% of the vote, with the ruling, pro-EU, centre-left PD gaining only 19% – and were beaten in the provinces of Emiglia Romagna (‘Red Romagna’) and Umbria. Meanwhile, the mayoral elections in the cities of Rome and Turin – both strongholds of the Left – also went against the establishment.

      Perhaps our Italian friends really have had enough………the next few weeks, and the the elections will be compulsive viewing.

  20. No comparison
    Posted May 27, 2018 at 11:06 am | Permalink

    Remoaners behave like Western governments behaved when the Iron Curtain was fully drawn closed. They never mention countries where their wanting analyses disprove their point.
    For instance, our government ministers spoke then of the relative greater wealth of France to Communist Poland, of the UK to Communist Bulgaria ( still true, post communism it is bizarrely rumoured ) but failed to mention the greater wealth of Communist Bulgaria to capitalist Uruguay, of Communist East Germany to Capitalist Nigeria…even with the latter’s natural oil wealth.
    Now Remoaners mention the greater wealth of Germany compared to Albania but don’t use Italy, Greece, Cyprus as a “Join the EU” advert.
    Italy is falling down the EU economic plughole

    • hans christian ivers
      Posted May 27, 2018 at 8:08 pm | Permalink

      You do not really have any idea do you?

      • libertarian
        Posted May 28, 2018 at 2:43 pm | Permalink


        No need for that kind of rudeness

        Thank you

        • hans christian ivers
          Posted May 28, 2018 at 9:11 pm | Permalink

          I will leave the rudeness to you

          • NickC
            Posted May 29, 2018 at 10:51 am | Permalink

            Hans, Unfortunately you don’t.

          • libertarian
            Posted May 29, 2018 at 6:50 pm | Permalink


            But you and your friends Andy, Tasman and Newmania set the bar high with abuse, threats and rudeness. I’m just responding in kind

            Thank you x

      • mancunius
        Posted May 28, 2018 at 6:08 pm | Permalink

        But Italy is falling down the EU economic plughole. So is Greece, so is Cyprus. That is the view of all sane economists.

        • hans christian ivers
          Posted May 29, 2018 at 7:38 am | Permalink


          If you looked in detail at the three countries you would know that Italy is in a much much better position then Greece

          • NickC
            Posted May 29, 2018 at 5:12 pm | Permalink

            Hans, That doesn’t put Italy in a good position economically. What with 16% NPLs, EuBillions in T2 liabilities, and sovereign debt kept at bearable rates only by ECB QE spending, Italy is in a very bad way. And completely at the mercy of the EU. As we have explained to you Remains ad infinitum.

  21. Mark B
    Posted May 27, 2018 at 11:30 am | Permalink

    Good afternoon

    The only thing that is going to change is positions of the deck chairs.

    Enjoy the rest of your Bank Holiday Weekend.

    • mancunius
      Posted May 28, 2018 at 6:09 pm | Permalink

      Just don’t put up your deckchair in the West Midlands this weekend.

  22. Turboterrier.
    Posted May 27, 2018 at 11:46 am | Permalink

    Oh what a tangled web we weave. When first we practise to deceive!

    The Italian economy has been the elephant in the room but the controlling countries within the EU have chose to ignore as nothing more than a bad smell that given time will go away.

    If and it seems likely they will create large waves then they will be the first domino to start he collapse from within.

    Mrs May and Hammond and all the other high profile remainers should heed the warning that no matter how many webs you create they will end up being your own downfall. The survival of the eurozone will take precedence over everything and that I suspect could help our cause especially as the money will have to be found from within the 27 countries.

    No better reason than to just get out at the end of the month before the begging bowl is delivered to these shores. It will all end in tears and recriminations.

    Mrs May if her last 18 months of leadership are anything to go by will be first with her hand in our pockets closely supported by Hammond. They have to be got rid of. Surely there are enough members to start the process of.

  23. Rien Huizer
    Posted May 27, 2018 at 1:25 pm | Permalink

    Mr Redwood,

    It is uncertain that this cabinet will actually materialize. The suggestions and party propaganda put out so far are not only challenging to the EU links (including EUR membership) but especially harmful for Italy’s standing in the financial markets. Knowledgeable Italian sources expect either no cabinet to be formed (fresh elections) or an agreement between the two parties to keep this at the “talk”level. Whatever happens, there will be plenty of smoke and Germany will be happy to assume the villain role if that satisfies emotions in Italy.

    None of the “plans” (pensions, tax reductions and even crazier schemes like defaulting on gvt debt are feasible in a country with Italy’s debt position.

    In essence, the markets will kill this long before the EU does..

    • mancunius
      Posted May 28, 2018 at 3:06 pm | Permalink

      “Germany will be happy to assume the villain role”

      Don’t be too complacent about that standoff-scenario unfolding. You won’t find the Italians anything like as malleable as the Greeks.

    • NickC
      Posted May 29, 2018 at 5:14 pm | Permalink

      Rien, Why not just admit it: the EU requires countries to keep voting until we get it “right”.

  24. Trevor Butler
    Posted May 27, 2018 at 3:14 pm | Permalink

    Dr Redwood – I admire you as a man of integrity in a world full of grasping, PPE qualified snakes – My wife and I no longer reside in the UK having chosen the far eastern route where we can actually save some money for our old age – We are still registered voters in the Wokingham constituency – as is our right – for another 11 years – We have been loyal Conservative voters forever but Mrs May is going to send us into rebellion, I’m afraid, and if she messes up brexit we would rather vote for the Monster Raving Loony Party than her all inclusive fudge job of trying to please everyone…

  25. Derek Henry
    Posted May 27, 2018 at 4:01 pm | Permalink

    Since the financial crisis of 2007–9, Italy’s GDP has shrunk by a massive 10 percent, regressing to levels last seen over a decade ago. In terms of per capita GDP, the situation is even more shocking: according to this measure, Italy has regressed back to levels of twenty years ago, before the country became a founding member of the single currency.

    Italy and Greece are the only industrialised countries that have yet to see economic activity surpass pre–financial crisis levels. As a result, around 20 percent of Italy’s industrial capacity has been destroyed, and 30 percent of the country’s firms have defaulted. Such wealth destruction has, in turn, sent shockwaves throughout the country’s banking system, which was (and still is) heavily exposed to small and medium-sized enterprises (SMEs).

    Italy has an official unemployment rate of 11 percent (12 percent in southern Italy) and a youth unemployment rate of 35 percent (with peaks of 60 percent in some southern regions). And this is not even considering underemployed and discouraged workers (people who have given up looking for a job and therefore don’t even figure in official statistics). If we take these categories into consideration, we arrive at a staggering effective unemployment rate of 30 percent, which is the highest in all of Europe. Poverty has also risen dramatically in recent years, with 23 percent of the population, about one in four Italians, now at risk of poverty—the highest level since 1989.

    The “success” of Monti’s demand destruction has now been confirmed. (budget cuts and tax hikes) pursued over the 2012–15 period reduced Italian GPD by almost 5 percent (about €75 billion a year, for a staggering total of around €300 billion), consumption by 4 percent, and investment by 10 percent, “due to their recessionary effects on GDP and on the major components of demand (consumption and investment)”

    They should go back to the Lira as soon as possible and phone Trump. Increase the budget and cut taxes. Sure it will increase the budget deficit and the national debt but as Japan has shown for nearly 40 years these are just private sector ” savings”

  26. Derek Henry
    Posted May 27, 2018 at 4:09 pm | Permalink

    Can Five Star Movement and Lega—live up to expectations?

    It’s unlikely. Ultimately, neither party offers a viable alternative to the status quo, at least in terms of political economy. Lega’s economic agenda is still very much neoliberal: the party’s main economic proposal is a flat tax rate in place of the current (more or less) progressive tax rates, which is clearly regressive in nature, with a bit of social protection thrown in (abolition of the Fornero law, which increased the retirement age).

    Likewise, the Five Star agenda, is a far cry from one of a progressive force. Even though its narrative, like that of left-wing populist movements, such as Podemos and Occupy, is built around the counterposing of people and oligarchy, the M5S simply reduces this oligarchy to a corrupt political ‘caste.

    Economic issues such as capitalism itself, labour and capital relations, inequality, are absent. Rather, they are a populist but centrist political force—opportunistic enough to ride any battle that can bring consensus, but without any ambition to change, or even reform, the system.

    More importantly, even if M5S and Lega truly did want to change the system, to do so they would have to challenge the euro regime, which neither of them is willing to do. Even though the two parties are commonly described as euroskeptic, or even anti-European, they were both quick to pledge their allegiance to the European Union before and after the election.

    Yet as long as they maintain this position, they are doomed to fail. European institutions have a wide array of tools to constrain and, if necessary, disable the democratic responsiveness of southern governments. While Italy has more bargaining power than Greece, it can be equally choked financially,just as Greece was in 2015, if it is perceived as a threat to the European neocolonial regime.

    • Rien Huizer
      Posted May 28, 2018 at 10:31 am | Permalink

      Five star has nothing to do with democracy (in the sense of democracy as a system of government). It is a combination of “fare bella figure” and political vandalism led by entertainers. A bit similar to what the Americans have, but without the corporate support that enables the current White House to function through the various eruptions of the leader. In both cases we are dealing with a transitory phenomenon, in all likelihood.

      Five Stars’ coalition partner (but no one an paretner with a movement masquerading as a party) is a serious and established party with constructive, be it somewhat right of center politicians plus a few oddballs. Proposing the latter for government was bound to lead to failure and fresh elections. This time with a newly electable Berlusconi. Anyone familiar with the governance of the city of Rome would never entrust government to the 5*s, Imo of course..

      • Edward2
        Posted May 28, 2018 at 8:15 pm | Permalink

        Perhaps you favour the installation of a safe pair of hands to lead Italy.
        Approved by the Commissioners.
        It’s the EU way.
        These voters are a perishing nuisance.

      • NickC
        Posted May 28, 2018 at 10:02 pm | Permalink

        Oooohh, Rien, That’s very bitter. It almost sounds as though you think only professional politicians and technocrats should run nations. Surely not?

  27. Derek Henry
    Posted May 27, 2018 at 4:18 pm | Permalink

    I don’t know if John agree withs me but he might as he seems to know how a sovereign fiat currency operates in reality than most.

    Only way to solve this crises is for Italy to go back to the Lira.

    Both Italy and the UK after Brexit have to Replace the current Budget Constraint with an Inflation Constraint. The correct constraint is whether or not a particular budget position will raise inflation beyond an official target rate (say, 2%, which seems to be the choice of most central bankers).

    So instead of the IFS and the other gold standard fools who now evaluate government budget proposals regarding their effects on the budget stance. They could easily recognise we use a sovereign fiat currency and instead shift focus on evaluating these proposals against the inflation target.

    An inflation constraint provides more fiscal space than a budget constraint, but in no way does it provide unlimited fiscal space. It doesn’t give license to policy makers to do whatever they want. It does mean the budget office will finally be doing something useful with its deficit projections—namely, building models to understand how deficits will affect the macroeconomy.

    First, it’s quite clear that economists don’t have much expertise in modeling how to use the government’s budget stance to manage the macroeconomy via a functional finance rule—but this is largely because they have come to view monetary policy as the main macroeconomic policy tool, not because it’s not possible.

    Note, though, that functional finance isn’t less specific than, say, the Taylor Rule—Taylor’s Rule says to adjust the interest rate to manage the macroeconomy; functional finance says to manage the budget position to do this. Consider the never ending debate among policy makers at the BOE, BOE watchers, and economists on what the BOE should do next, when it should do it, how it should communicate what it’s going to do, and so on. If Taylor’s Rule were really that useful, we wouldn’t need most of this debate and there wouldn’t be so much disagreement among the various parties.

    Let’s stop pretending that replacing a budget constraint with an inflation constraint is so hard. It involves a change in perspective, nothing more and nothing less. It replaces the IFS and the other loons current practice which is to assume our economy is always at full employment and warn of impending financial ruin as a result of deficits.

  28. PaulDirac
    Posted May 27, 2018 at 4:36 pm | Permalink

    I tried to buy those “Basta Euro” T shirts, but can’t find them here yet.

    Let the Italian circus start.

  29. Iain Gill
    Posted May 27, 2018 at 5:00 pm | Permalink

    As Guido says Brexit MP’s are frogs being boiled.

  30. Andy
    Posted May 27, 2018 at 5:19 pm | Permalink

    Former YouGov boss Peter Kelner today points out that the will of the British people today is probably to Remain.

    Leave won by 1.3m. Leave attracted mainly older voters. 1.2m
    Mainly older people have died since the referendum.

    Meanwhile younger people largely backed Remain. 1.4m younger people have joined the electorate since 2016.

    Brexit is dead.

    • Richard1
      Posted May 27, 2018 at 7:31 pm | Permalink

      Opinion polls suggest no change. Remember younger people have got two years older and some will have entered the world of work and taxes, and perhaps decided they would rather tax and other policies be determined by people they have elected and can chuck out, as opposed to mandated by the EU bureaucracy.

      Note that in Italy the large majority of young people want out of the EU.

      • rose
        Posted May 28, 2018 at 8:23 pm | Permalink

        And some may now be trying to find somewhere of their own to live, and putting two and two together.

    • Adam
      Posted May 27, 2018 at 7:56 pm | Permalink

      Andy: The will of people might change even days after a Govt they voted into office formed, but that Govt retains power.

      Reverse-rationalising the outcome of the EU Referendum, via one opinion pollster’s personal view of probability, has no traction. Brexit has the authority of the majority & will.

      Pronouncement of death, stated by objecting to Brexit’s vigorous daily life, self-evidently defies belief.

      • Andy
        Posted May 28, 2018 at 8:29 am | Permalink

        You get to replace a government ever five years if it fails to deliver.

        Brexiteers are failing to deliver the Brexit they promised.

        When can we reconsider?

        Remember I didn’t want Brexit. You did. They are failing to deliver YOU what they promised YOU they would. You should be angry with them.

        • Edward2
          Posted May 28, 2018 at 8:16 pm | Permalink

          It was 40 years since the previous referendum.
          So a precedent has been set.

        • Adam
          Posted May 28, 2018 at 8:17 pm | Permalink

          Feel free to reconsider as much as you feel appropriate, Andy, but voting out a Govt on the assessment of all your considerations depends on an election being available.

          I did vote Brexit in the Referendum, having read the Govt-issued leaflet, & evaluated what both sides claimed in numerous communications & debates. I’m happy to tolerate some slippage of progress, so long as we in the UK regain control our own affairs, to do what is best.

          Anger would be corrosive, & doesn’t apply. Approaching freedom soothes with calm contentment.

        • NickC
          Posted May 28, 2018 at 10:06 pm | Permalink

          Andy, I am dismayed by them – because they are delivering Remain.

    • Plato fish
      Posted May 27, 2018 at 9:46 pm | Permalink

      The ancient Greek philospher Zeno as in Zeno’s Paradoxes would have taken you on as one of his students at the drop of hat if he could have worked out logically how the hat could possibly reach its destination on the floor.
      Maybe the Greek sun made him half-baked. The way he thought he could never get full baked or, a full wit, only a half-wit.
      Remoaners take him as their mentor, even though he is dead and replaced by someone not dead.
      Remoaning is dead.

  31. Dennis
    Posted May 27, 2018 at 5:54 pm | Permalink

    In the last blog – ‘Should we limit everyone’s bread….’ comments, I was amazed to see that I am not the only one in this blog to mention that the UK’s overpopulation is the key to many if not all our living standard problems. At last many are seeing that this is so obvious.

    Some have said that we are increasing by 500, ooo per year – this is wrong as half this number leave but certainly these are legally able to return at any time!

    Immigrants are not helping this issue but the major factor is the gross number of ‘indigenous’ Brits. Haven’t you seen my solution of reducing by 1 million per 10 years and still have 100,00 immigrants per years IF needed.

    • Hope
      Posted May 27, 2018 at 8:22 pm | Permalink

      Unusually your figures ar wrong.myou need to look at NI numbers issues to foereigners not the estimates based on limited survey to con the public about net migration. Immigration is about three times higher than the Govt claims. But it is this sort of lie why May thinks she can keep getting away with deceiving the public.

    • alan jutson
      Posted May 28, 2018 at 6:57 am | Permalink


      Why be surprised

      Its the simple reason why the HNS is failing, as are social services, lack of housing, congested roads, congested schools etc etc.

      All are being used more than ever before.

      Quart and Pint pot spring to mind.

  32. ian
    Posted May 27, 2018 at 8:29 pm | Permalink

    Not yet. EU elite going for another election in Italy.

    • Madame Guillotine
      Posted May 28, 2018 at 11:44 am | Permalink

      Another Remoaner case of “they didn’t know what they were voting for” and a Hammond case of “They didn’t vote for poverty” so “let’s’ attempt to completely reverse the Will of the People for we are important”

  33. Stred
    Posted May 28, 2018 at 5:09 am | Permalink

    Net migration is likely to be 500k if NI figures and illegals are estimated. Those staying less than a year often come back.

    Italy will run into rights lawyers if tries to deport its millions of migrants and may decide to give them EU passports and put them on a bus to a country with generous welfare for migrants and no border controls, owing to its useless government.

  34. hans christian ivers
    Posted May 28, 2018 at 7:52 am | Permalink

    Italy has had weal and unstable governments for more tan 50 years and that will continue, the new government will appease itself with the outer conditions and it is very likely therefore that it will not create any particular strains in the EURO system as predicted by many on this site, who wold like to see the EURO in trouble

    • NickC
      Posted May 28, 2018 at 10:18 pm | Permalink

      Hans, The Euro is in trouble. Have a read about T2.

      • hans christian ivers
        Posted May 29, 2018 at 7:40 am | Permalink


        have now read it I do not share your concern.

  35. ChrisS
    Posted May 28, 2018 at 7:37 pm | Permalink

    The Brussels Mafia have stepped in and ensured that Italian President, Sergio Mattarella, vetoed the nomination of a Eurosceptic as Finance minister. Rightly, the Prime Minister proposed by the League and Five Star has refused to proceed.

    No doubt, after consulting Juncker and Co, Mattarella has really poured petrol on the fire by appointing a pro-EU un-elected former IMF official to form a government which will have no legitimacy whatsoever. If he loses a vote of confidence, as seems likely, new elections will follow as soon as August.

    Hopefully, Italian voters will be even more determined to thumb their collective noses to the establishment and will elect anti-EU parties with a clear majority.

  36. The Prangwizard
    Posted May 28, 2018 at 8:04 pm | Permalink

    And Quelle Suprise the Italians’ democratic will has been usurped by the evil Empire which is the EU. Installing a puppet on a pretext and threatening new elections.

    If your party and the leader you support don’t get out of the EU quickly you can be sure there will be trouble. We demand strength not weakness from you and everyone else who claims to want our exit.

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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