Italy’s austerity-fueled crisis is a warning to the Eurozone

But wasn't that the whole point?

They also could have just pulled the bandaid off of Greece in 08, booted them from the union, took a loss on the debt, threw aid, and laid it out as an example for Spain and Italy to get their shit in order.

What sucks is the most productive people left and the already massive state obligations fell on those left. It wasn't the currency that did that.

- Economic homogeneity across an entire nation state can only reasonably expected with small countries

Well, that is not true and probably not an issue. Every country has automatic mechanisms of wealth redistribution across its regions: California feeds most of the central US states. But the EU is a monetary unit without a proper redistribution mechanism between its regions: it's hard to convince the Germans that their tax money should subsidize Italy because it's part of a national unity.

Any gains Germany gets from overly tight money are temporary and transient. Running a disastrous monetary policy to indirectly improve Germany's loan terms is an insanely destructive thing to do both to the indebted countries and to the weaker parts of Germany's own economy.

Not allowing people to work and destroying their countries' economies greatly increases the chance these countries are going to default or restructure parts of their debt. This is not to Germany's advantage.

Having neighbors with poor economies is bad for your exports and your own businesses.

In the long run Germany would have had much to gain if people of Europe had functional investment markets and funding was available to buy the tools necessary for people to work and produce instead of strangulated markets.

Having a single currency could have worked (as it works in the US) if it was not managed like they were trying to destroy the west.

"All members past debts were in their home currency, including Germany. Upon joining the Euro, the past debts were also converted to the Euro because their old currencies were abandoned. What I mean by international value is if you look at the debts of all member states, when the euro doubled in value from 80 cents to the US dollar to $1.60, from a US investor, he doubled his money holding Greek debt or any member’s debt. We can see that the dollar rose sharply against the drachma between 1995 going into 1999 demonstrating that the drachma declined 47% going into the formation of the euro. The cost of servicing the past debt rises in real terms and when they had to pay off the debt and roll into new debt, they were paying in international value more than it was worth upon joining the euro.Back during the Reagan Administration, I met with the U.S. Treasury and warned that Volcker raising rates to 14% meant he was suppressing inflation immediately, but causing it to exponentially rise by the end of the decade. Why? Because central banks cannot stimulate or suppress and economy with interest rates when the government is the biggest borrower. Whatever they think they are doing by raising rates to stop people from borrowing has no impact upon government for they will always spend other people’s money freely. In that meeting, I was flatly told it was OK because the government would be paying back with cheaper dollars. In this case, the rise in the euro to $1.60 meant the opposite – member states would be contracting and had to pay out huge sums beyond what they originally owed. This was no different from people who took out Swiss loans and then the Swiss franc/euro peg broke. Suddenly the borrowers owed a lot more in their home currency when the Swiss rallied.

Consequently, the past debt of Greece was in drachma and the decline in the currency meant that its debt in terms of dollars (international value terms) fell almost by 50%. Upon joining the euro, the past debt was then converted to euro – not before. Therefore, in international terms of value, the debts effectively doubled in real terms. This would NOT have been a problem had all the debt of member states been consolidated into a federal debt for Europe. Thereafter, any new borrowing would have been purely state debt NOT acceptable for reserves in the banking system.

In this manner, the past debt, which does not stimulate the immediate economic position, doubled in real terms and increased the cost of servicing the past debt. This is how the economy was strip-mined. Had the debt been consolidated into one federal debt, that burden would have been relieved upon by member states. This would have allowed the euro to then actually compete against the dollar."

https://www.armstrongeconomics.com/international-news/europe... - see for more detail. I've followed Martin Armstrong for well over a decade now and have found him and his computer Socrates to be incredibly accurate.

I’ve lived enough in Italy to see how generally Italians have absolutely no idea what’s going on in the global economy and why now the country is in regression now.

They are like “distracted” by a telenovela-like politics (you cite Berlusconi) that doesn’t explain anything about the state of the italian economy and why it goes this way down. And when they try, the political discussion is eaten by a calcio-style debate, at the paradox where socially worth maneuvers are now a fascist thing, while no left parties are there to embrace the economical revolution your country requires.

Politics has no role here, whatever the RAI is screaming in the news, whatever the party is at the government, Italians just accept whatever Europe or industrial lobbies want, and now here are the results. Yet still they continue to debate about useless political dramas.

1. "just because it had Cristiana in the name" that was not the only reason... It was more of a complex clientelism-based system (e.g. I hire people in public industries/companies so that they'll vote for me, and stuff like that)

2. "You have the possibility to counter mafia's power" Man, you don't seem to understand what mafia is. Mafia is not just crime: it's an organization that seeks to replace local power structures in all but name. People that (knowingly) vote for mafia associates are already disenchanted with the idea of elected representatives.

3. Berlusconi was still mostly "clean" by 1994. Sure, he had been a P2 member, but who wasn't? He was divorced, and so what? (So were lots of christian democrats and right-wing politicians before him). The nasty stuff only began to surface years later.

4. "The only top priority was about homosexual rights" Come on, that's right-wing propaganda plain and simple. Stuff like liberalization and reforms of the school and the jobs market were also in the agenda of the last three/four governments not endorsed by Berlusconi. By the way, ethical themes are about the only thing a political party shouldn't negotiate upon to get votes (IMO).

There are mechanisms to implement "voto di scambio". All a mafioso has to do to implement it is to to gain a blank vote card and apply a vote of his preference. Then when you come along the mafioso will give his voted card for you to submit as a valid vote and will expect you to give him the blank card that you were given before entering the voting booth.

In this way he the mafioso is assured that the pre-voted vote card has been submitted and will also have a new blank card to give to the next person selling his vote.

You can, at most, invalidate the mafioso's vote by applying more votes (thus making the vote card void) but you still won't be able to supply your own vote (and thus, making a difference).

In the end, it's always easy to think people are stupid and that bad actors didn't actually think trough stuff, ran tests and improved the processes as any organization of a sufficient size would do.

Please don't blame the victims. Stronzo/a.

Just as an example the Italian white-goods industry used to be world class but it got almost obliterated first by Turkish competition and then by the Chinese and the Koreans (which probably also manufacture most of their stuff in China).

I’ll also whant to add a mention about Italy’s car industry (which was not small, I agree). The Germans somehow managed to keep their brands and most of their car manufacture going while the car industry in Italy is about to dissapear completely. I’m not exactly sure of the reasons of why that happened (as late as the 1990s the Fiat Punto was still the best sold model in Europe) but this has also had a very adverse effect on Italy’s lack of growth. Afaik the German car industry is responsible for almost 10% of its GDP, Italy wouldn’t have been in a as dire a situation as the current one if it still had a well-established car industry on its own.

We've tried this shit before, it was the gold standard in the 20s. Remember how it ended? Yeah, it was a heck of a good job!

The whole Euro project is brain-dead, and it's killing the EU, fast. Wait to see the results of the coming European elections...

London is the world capital of finance, with NYC and Tokyo on 2nd place. the UK is ahead of the RoW when it comes to finance by at least 2 years.

northern Europe is too small to matter on the world stage. the Tokyo metropolis is larger than the whole of northern Europe in terms of population and wealth.

What if, for instance, we used software systems engineering as model and thought about political systems in terms of high-availability, reliability, and security? Too-big-to-fail can be thought of as a Single Point of Failure, a system attribute we know works against availability and security. We might further think of corruption as an attack on the system, and hence, plan mechanisms to minimize the "blast radius". And so on.

Other models might work too, for example, physics. My point is that the current model of political discourse is weirdly self-limiting. Something very odd seems to happen as soon as one adopts it. It's as if people immediately forget the knowledge they have outside politics. I have seen this many times in the political writing of otherwise very intelligent scientists and engineers--their technical ideas are creative and rigorous but their political ideas banal and trite.