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ITALY’S RULING COALITION, and the broader European plan to save the euro, are both at risk this evening – with Italian prime minister Silvio Berlusconi locked in a high-stakes battle with coalition partners to muster support for emergency growth measures demanded by the EU.
Markets are looking to the EU’s grand plan — promised in time for tomorrow’s EU summit — for a turnaround in the debt crisis that will avert a potential global recession.
But the plan risked being delayed, yet again, as European governments are still failing to agree on details. Berlusconi’s government, meanwhile, showed little sign of meeting the EU’s demands for reforms, a prerequisite for the grand plan to go ahead.
The summit of EU leaders, meant to be a confidence-building day, risked going down as another failure in Europe’s fight to stem its two-year debt crisis.
EU officials say they will not present their comprehensive plan if Italy doesn’t agree to new economic measures they asked for at Sunday’s summit.
But Berlusconi has been unable to get his key ally in parliament, the Northern League, to swallow an increase in the pension age. The Northern League says it will alienate its constituency of workers in the productive north.
Northern League leader Umberto Bossi conceded the government is at risk. ”Let’s say the situation is difficult, very dangerous,” he told reporters in Rome.
The head of Berlusconi’s People of Freedom Party, Angelino Alfano, suggested Berlusconi’s party had reached a deal with the Northern League — but no details were announced and the premier’s office remained silent.
“We hope to have identified a point of balance with the League that allows us to give a response to the European Union also on pensions,” Alfano said during the taping of an evening talk show, the news agency ANSA reported.
Berlusconi has survived scandals, court cases and dozens of confidence votes, but experts say the economic plan he needs to get approved will be one of the most critical tests yet of his grasp on the country’s leadership.
“Berlusconi has an immovable object at home which is Bossi and the Northern League, and an unstoppable force abroad which is the European Union, so he’s in a very, very difficult position,” said James Walston, a political science professor at American University in Rome.
A Cabinet meeting to draft the emergency growth measures ended Monday evening in silence — a clear indication of discord within the government majority.
The EU wants Italy to raise its standard pension age from 65 to 67, change the legal system to encourage investment, and pass other reforms to improve growth. All are measures that have been talked about for years in successive governments, but there has been little political will to see through the unpopular decisions.
Bossi has said the Northern League will not support any increase in the pension age.
The outgoing governor of Italy’s central bank, Mario Draghi, has already expressed concern that rising borrowing costs are threatening to eat up a chunk of the euro54 billion in austerity measures approved by parliament last month. For weeks, the ECB has been buying up billions in Italian bonds, trying to keep Italy’s borrowing costs down.
Italy’s fate is crucial to the eurozone because it is the bloc’s third-largest economy and would be too expensive to rescue.
To avoid that scenario, the EU is working on a three-part plan — writing off more of Greece’s debt, raising ailing European banks’ capital levels so they can deal with those losses on Greek bonds, and boosting the bailout fund’s powers.
All three measures need to be agreed together in order to work, but it appeared that agreeing on the Greek writedowns and the bailout fund would take longer than expected.
The 10 EU countries outside the Eurozone won’t sign off on the move to force banks to raise new capital without the other two parts of the plan in place. They demanded the postponement a meeting of finance ministers due to take place tomorrow, which was to iron out the technical details of the plan ahead of the leaders’ summit later in the day.
Without the finance ministers’ meeting, it is likely that tomorrow’s summit’s will only reach vague conclusions, if any.
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Like his sabre rattling about cutting water water down to a trickle. Good man Phil
@Padraic O Sullivan: dont forget the septic tank charge that he forced people to pay with the fear of fines.
Yeah we all can trust in Big Pig Phil Hogan .. his honesty is there for all to see in his track record ..
@Gowon Geter: hes still right though
@Gowon Geter: Indeed, the only possibilities are that he’s right or he’s wrong. But if he’s wrong what has he gambled and lost, remember it’s not just the US who have concerns about this.
@Paul Furey: Only on Huawei
@Arch Angel: ha and if the americans had the better technology for 5G network deployment do you seriously think could we trust them more ? I can recommend a few documentaries you might want to watch…….. -start with Citizen Four…….
@Dave Hammond: Yes, actually we can trust them more. The US is still a country bound by laws that make it very difficult for them to just disappear dissenters. There are no such protections in China, you can disappear out of prison and never be seen or heard from again and there’s a lot of evidence out there to say one of the ways they do this is they carve you up for your organs to sell on. So Dave, sometimes it really is a case of better the devil you know.
Huawei has a 5G infrastructure build monopoly and the Americans dont. The yanks don’t like this.
@Paul Furey: Exactly and they don’t have secret deals with them to allow NSA/CIA back-door access to their phones and infrastructure
@Gowon Geter: No, they’ll just allow that access to the Chinese govt. And no need for any ‘secret deal’.
@Emmet Purcell: just because you are not paranoid doesn’t mean they are not to get you…;-)
Question: “Any chance the Yankees might keep said Ex water Phil and not let it back????.
Phil knows a Lie when he sees one
Haha the US now will show its true colors with the UK now that they are out…..they will throw them a bone and get a one sided trade deal because the UK are desperate……never a good place to be when trying to get a good deal lol.
@Peter Hughes: Yeah sure no countries outside the EU ever have trade deals
@Gowon Geter: You really don’t get it do you….let me explain. The UK has just left their biggest trade partner who counts for up to 50 percent exports.
Now anyone with a modicum of brain power will see the UK needs to replace this and do it fast they are for want of a better word desperate, so any country will have massive leverage in any negotiations……its really not rocket science, but to the average genius that voted for Brexit these details seemed to have gone way over their head lol
@Gowon Geter: I’m pretty sure that’s not what he said. In fact, the entire premise of his comment is exactly that countries outside the EU have trade deals. It’s just that the UK have put themselves in a position whereby their position will be weaker in terms of negotiating a trade deal precisely because they will be desperate to get one.
@Peter Hughes: Get what Peter ? Who made you expert on anything, do you have a crystal ball that tells you the future ? ..
When the UK refused to join the Euro people made all the claims of the UK downfall and they ended up being the Financial Powerhouse of the World with London processing 80% of trades.
People who voted for Brexit don’t care about what reason you may think the voted for Brexit nor care for your superior intellect and calling them names. The main reason mots people in the UK voted for Brexit was immigration control, plain and simple, they don’t care about market Forces / Economics and fair play to them, maybe all countries shoudl start thinking about people first not economics.
@Brian Ó Dálaigh: Of which I am sure they are well aware , so what your point ?
@Brian Ó Dálaigh: A few simple deals with China/Asia and the US is all they need, its the Asian markets that are ones that are the future while the EU is not
@Gowon Geter: Comical…..this is the simplistic nonsense that will see a severe reality check in the coming years.
@Gowon Geter: The irony is the EU allows for intra European immigration control, but the UK (and Ireland) chose not to enforce these controls. Try and move to Spain and see what happens. There is a registration system and to register you have to be able to prove you can support yourself via a job , a pension or another income. Additionally you also have to have access to healthcare either via social security contributions or have private healthcare. The UK can have exactly the same procedure but won’t. Any ideas why?
@Gowon Geter: the point is that you implied that he said no trade deals occur outside the EU when his comment was actually based on the very fact that they do occur outside the EU.
@Gowon Geter: hmm , You think that China which has to manage it’s own billion people are where the UK are going to turn to replace their imports which stand at 40bn in german goods , 30bn in french 33bn in dutch , 30bn in Irish , 25bn Swiss , 18bn belgian , 14bn italy , 14bn spain etc etc – ya really think that instead of Spanish oranges , French Wine , Italian goods etc that the Brits really just need to do a few ‘simple deals’ to replace that – wow you are so misguided or f***ing deluded it aint worth trying to have sensible discussion on the subject with ya.
@Peter Hughes: You’re an embarrassing fool.
@Peter Hughes:
Trade agreements that have been signed
Agreements with the following countries and trading blocs will take effect when the UK leaves the EU:
Andean countries
CARIFORUM trade bloc
Central America
Chile
Eastern and Southern Africa (ESA) trade bloc
Faroe Islands
Georgia
Iceland and Norway
Israel
Jordan
Kosovo
Lebanon
Liechtenstein
Morocco
Pacific states
Palestinian Authority
Southern Africa Customs Union and Mozambique (SACUM) trade bloc
South Korea
Switzerland
Tunisia
Mutual recognition agreements
Australia, New Zealand and United States have signed mutual recognition agreements.
Discussions with Japan on a UK-Japan MRA are ongoing. The UK and Japan have signed an exchange of letters designed to ensure the continuity of existing arrangements as a temporary measure.
I’m sure the United States are quaking in their boots with recent threats from Hulk.
When the Irish Economy was on its knees in 2008 a had a conversation with a Japanese buisnessman about our situation. I’ll always remember what he said. A country the size of ireland only needs 2 or 3 good deals to get back into the black. Unfortunately the imbeciles in power showed thier weakness and opened the flood gates to every vulture and sacavanger to come in and rape and plunder every asset let behind.
Met Chuck Grassley, the only senator to vote against the Visa program for Irish immigrants.
How come the likes of hogan and Murphy mess up in the Dail and are heroes when they are in Europe are we missing something it must be their Irish charm.
Bit like himself , the ignorant oaf.
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