Italy Next

rodento

Looks like Italy have 900 billion to pay out in bonds in the next 5 years:eek:

With nearly €900 billion of government debt maturing over the next five years, higher yields will add to strains on its economy and push up the cost of refinancing

http://www.irishtimes.com/newspaper/finance/2011/0709/1224300391997.html

meditraitor

rodento wrote: »

Looks like Italy have 900 billion to pay out in bonds in the next 5 years:eek:

With nearly €900 billion of government debt maturing over the next five years, higher yields will add to strains on its economy and push up the cost of refinancing

http://www.irishtimes.com/newspaper/finance/2011/0709/1224300391997.html

Wow, €900bn........ to us that would be a right fecker but to the 3rd largets economy in Europe I think there is hope..

For example, the GDP alone for the Milan metropolitan region is €312bn.

If wiki is to be belived they also have the 3rd largest gold reserve???

beeftotheheels

rodento wrote: »

Looks like Italy have 900 billion to pay out in bonds in the next 5 years:eek:

With nearly €900 billion of government debt maturing over the next five years, higher yields will add to strains on its economy and push up the cost of refinancing

http://www.irishtimes.com/newspaper/finance/2011/0709/1224300391997.html

In Italy's favor a huge amount of Italian debt is held by Italian investors so, in a way, they are less exposed to the bond markets than others in that Italian investors have a vested interest in keeping Italy going.

Against Italy is the fact that their government are now in crisis

There is growing speculation that the economy minister may have to step down after Neapolitan prosecutors requested an arrest warrant for his close associate, Marco Milanese, on corruption charges.

The minister - who is seen as a stalwart defender of budget discipline - is seen as increasingly isolated within the Italian government.

Prime minister Silvio Berlusconi has said he will amend Mr Tremonti's draft budget in parliament, criticising his own minister:

"He is worried about the markets, I understand him. But I always remind him that in politics the result is made up of consensus and votes. He isn't interested in consensus, but we are."

http://www.bbc.co.uk/news/business-14080021

“If I fall, then Italy falls. If Italy falls, then so falls the euro. It is a chain”

So sayeth the Italian Minister for Finance apparently.

http://www.ft.com/intl/cms/s/0/4733652a-ab04-11e0-b4d8-00144feabdc0.html#axzz1RkQb4Xne

sarumite

beeftotheheels wrote: »

Against Italy is the fact that their government are now in crisis

The Italian political system has been in crisis for a long long time. Its been almost 20 years since the 'Mani pulite' scandal and things have only gotten worse since then. Silvio is the longest serving post war leader of Italy and yet according to a recent editorial in the economist (http://www.economist.com/node/18805327) he has been an umitigated disaster for them (and that was ignoring his corruption or sex scandals!). Italys government is in perpetual crisis, only that in Italy that is considered the norm.

beeftotheheels

sarumite wrote: »

The Italian political system has been in crisis for a long long time. Its been almost 20 years since the 'Mani pulite' scandal and things have only gotten worse since then. Silvio is the longest serving post war leader of Italy and yet according to a recent editorial in the economist (http://www.economist.com/node/18805327) he has been an umitigated disaster for them (and that was ignoring his corruption or sex scandals!). Italys government is in perpetual crisis, only that in Italy that is considered the norm.

I just love the fact that one of the issues with the Finance Minister is that SB is trying to insert a clause in the Finance Bill to negate part of the fallout of a Court ruling awarded against one of his companies. I mean, WTF???

http://www.reuters.com/article/2011/07/07/italy-berlusconi-fininvest-idUSLDE76617J20110707

Even CJH would not have dreamed of being this transparent - would he?

sarumite

beeftotheheels wrote: »

I just love the fact that one of the issues with the Finance Minister is that SB is trying to insert a clause in the Finance Bill to negate part of the fallout of a Court ruling awarded against one of his companies. I mean, WTF???

http://www.reuters.com/article/2011/07/07/italy-berlusconi-fininvest-idUSLDE76617J20110707

Even CJH would not have dreamed of being this transparent - would he?

Unfortunately it goes beyond SB. This is Italy's parliment in practice.

http://www.youtube.com/watch?v=lBd8hwyGF9I

Honestly, I don't think Monty Python could have made this up.

View

sarumite wrote: »

Italys government is in perpetual crisis, only that in Italy that is considered the norm.

In fairness, at least they manage to form a government, Belgium has been so long without a government at this stage, the people there are starting to wonder if they ever needed to have one.

beeftotheheels

View wrote: »

In fairness, at least they manage to form a government, Belgium has been so long without a government at this stage, the people there are starting to wonder if they ever needed to have one.

This combined with their debt pile made me wonder how they managed to keep the bond markets at bay for so long, maybe ourselves and Greece and Portugal helped them by offering a distraction.

I'm finding myself starting to ponder whether the new head of the ECB can take up his post if his country is no longer a eurozone member and suspecting that the answer is no, even though his appointment has been ratified while clarifying that the ECB board is not in fact free, from political interference.

irishh_bob

something is definatley a foot, serious drop in the euro since friday and a massive jump in the price of gold ( in euro )

sarumite

View wrote: »

In fairness, at least they manage to form a government, Belgium has been so long without a government at this stage, the people there are starting to wonder if they ever needed to have one.

True, its difficult to have a government in crisis if you haven't got a government I guess.

beeftotheheels

irishh_bob wrote: »

something is definatley a foot, serious drop in the euro since friday and a massive jump in the price of gold ( in euro )

To be fair I don't think that this is all down to Italy. Unimpressive US jobs numbers and stalled debt talks aren't helping general market sentiment here either.

Just at the time when we need decisive leadership most countries seem to be offering anything but.

Really someone needs to get their $h!t together and start a good war, I'd propose we start by introducing conscription, renationalizing Aer Lingus and Irish Ferries (to provide troop carriers), and invading Luxembourg. I reckon we could take Luxembourg.

View

beeftotheheels wrote: »

Really someone needs to get their $h!t together and start a good war, I'd propose we start by introducing conscription, renationalizing Aer Lingus and Irish Ferries (to provide troop carriers), and invading Luxembourg. I reckon we could take Luxembourg.

Since we are borrowing off Luxembourg (along with the other EU states) as it is, I am not sure that'd work. Wars are (mega) expensive and having the Army run out of bullets half way through the invasion as Luxembourg wouldn't loan us anymore money to buy them might prove a tad embarrassing.

beeftotheheels

View wrote: »

Since we are borrowing off Luxembourg (along with the other EU states) as it is, I am not sure that'd work. Wars are (mega) expensive and having the Army run out of bullets half way through the invasion as Luxembourg wouldn't loan us anymore money to buy them might prove a tad embarrassing.

You raise a very valid point. Not to mention that their lack of a port would give the LE Ulysses and LE Oscar Wilde no where to dock even were a revel of drunken paddies armed with spud guns sufficient to scare the Luxembourgers into surrender.

Now, Iceland... they're not lending to us, an argument could be made that they messed things up for us (one letter and six months pah!), and their smug little bond issue recently... :rolleyes:

Of course their lack of natural resources, financial condition and US defense treaty would all need to be considered (and quite frankly I'd rather consider them than consider where the markets are closing/ going to close today, or consider the lack of any political leadership at the moment).

Seems that the ECB is damned if they do, damned if they don't.

But at least Ecofin will ride to the rescue with a couple of committees.

irishh_bob

beeftotheheels wrote: »

To be fair I don't think that this is all down to Italy. Unimpressive US jobs numbers and stalled debt talks aren't helping general market sentiment here either.

Just at the time when we need decisive leadership most countries seem to be offering anything but.

Really someone needs to get their $h!t together and start a good war, I'd propose we start by introducing conscription, renationalizing Aer Lingus and Irish Ferries (to provide troop carriers), and invading Luxembourg. I reckon we could take Luxembourg.

gold has been high in dollars more or less all the time this past year , the euro price in gold has been nothing to write home about for a year or so , baschically you need to be weak against the dollar in order to see gains in gold or prescious metals

AlekSmart

sarumite wrote: »

Unfortunately it goes beyond SB. This is Italy's parliment in practice.

http://www.youtube.com/watch?v=lBd8hwyGF9I

Honestly, I don't think Monty Python could have made this up.

AHA !!!..So now we know what became of our Electronic Voting Machines.....Noel Dempsey did us proud

Voltex

I think we are seeing first hand the reason why Ireland will not get a discount in its interest rate from the French. Its a smoke screen to hide the reality that if Ireland were given a 1% discount in its rate (to 4.8%) then the question Spain and Italy face is that it would be cheaper for them to use the bail out fund rather than staying in the bond markets.

Sand

Spain is in serious, serious trouble too. The ECB isnt helping either:

It will also take a total purge of the ECB's leadership, which clings to its madcap doctrine that monetary policy can be separated from other emergency operations, and which chose last week of all moments to raise interest rates again and kick Spain in the teeth. It did so knowing that the one-year Euribor rate used to price more than 90pc of Spanish mortgages must rise in lock-step. As one Spanish commentator put it, the Eurotower in Frankfurt should be torn down, and salt sown in the ground.

Bit harsh, but its a fair assessment of the ECBs hysterical performance so far. The Italian and Spanish crisis look like theyre going to feed off each other - I wonder what the odds are of Ireland rejoining the debt markets in 2012.

In the immortal words of George W. Bush, this sucker could go down.

Debtocracy

Where is Spain going to get the money it owes to France, if Germany can’t get the money back it lent to Italy, and Italy can’t get the money back it lent to Greece

Will be intersting to see if the European Financial Stability Fund will have a AAA rating by 2013 (if we get that far). Methinks the printing press is the only mechanism that can save the Euro.

ei.sdraob

Colm McCarthy kicked of a discussion here

In a low-growth economy like Italy and with an inflation target of 2% I am not confident that the ‘tipping-point’ is as high as 7%. But not to worry, the EU Commission is on the case, this from RTE:

The EU has called for a ban on rating agency decisions on countries under internationally-approved rescue packages. Speaking in Brussels, Internal Markets Commissioner Michel Barnier also said that governments should be fully informed before being downgraded by ratings agencies.

So the agencies would have to quit rating Greece, Ireland and Portugal, but could fire ahead rating Italy and Spain. Jose Manuel Barroso, the EU Commission president, also targeted the agencies last week, alleging market manipulation no less, and anti-European bias. The problem, in the estimation of these two EU luminaries, has been caused by the ratings agencies. With no Plan B apparently, the failure of Plan A needs to be assigned somewhere, and US ratings agencies will do fine.

When you dont like what you are hearing, shot the messenger :rolleyes:

Irish Slaves for Europe

Voltex wrote: »

I think we are seeing first hand the reason why Ireland will not get a discount in its interest rate from the French. Its a smoke screen to hide the reality that if Ireland were given a 1% discount in its rate (to 4.8%) then the question Spain and Italy face is that it would be cheaper for them to use the bail out fund rather than staying in the bond markets.

But haven't the other bailout countries got interest rate reductions?

sollar

Italy have a debt of €1.9 trillion according to RTE Prime Time. To big to save they say.

femur61

Discussed on Primetime last night by Dan O Brien said the Euro needs to be sorted out in a matter of days.

Is mise le key

sollar wrote: »

Italy have a debt of €1.9 trillion according to RTE Prime Time. To big to save they say.

I dont like saying it but the writing is & has been on the wall for the €uro & EU for quite some time now,

http://nationaldebtclocks.com/italy.htm

It really is a state of denial that this can be resolved if the notion of repaying this these national debts is maintained.

Unfortunatley this is going to get really really tough, for all of the people of the EU & western capitalist countries, we are witnessing the natural evolution of a capitalist cycle that rose so high this time round that this is going to be one catastrophic low, it is as comparable to the great depression & we really do have to ask do we want to allow it to return to the status quo, albeit that will be in about 5-10 years & after some severe unavoidable hardship as the by product of the boom.

sarumite

Is mise le key wrote: »

I dont like saying it but the writing is & has been on the wall for the €uro & EU for quite some time now,

For someone who doesn't like saying, you do say it a hell of a lot :pac:

Really though, the €uro problems are a little self evident, but what is it that makes you think the EU is also collapsing?
I haven't heard of country with any serious intent of leaving the EU....even europhobic politicians are more concerned with reform than anything else.

later12

In fairness, a collapse of the Eurozone and competitive devaluations between member states, if that arose, would be likely to do tremendous damage to the European single market, which is a cornerstone of the European Union itself. The EU is not immune from damage here either.

sarumite

later10 wrote: »

In fairness, a collapse of the Eurozone and competitive devaluations between member states, if that arose, would be likely to do tremendous damage to the European single market, which is a cornerstone of the European Union itself. The EU is not immune from damage here either.

I agree. It would certainly be damaged, though coallapsing? The Euro was founded on several false assumptions. The EU has been built on a more solid basis. If the Euro collapses, it doesn't necessarily follow that it would take the whole EU with it.

later12

No of course the EU won't collapse, even the Eurozone itself will not collapse, it is far too ingrained in the world economy to be allowed to disappear. The likelihood - or the possibility, anyway - is that some member states will leave the Eurozone. And some same member states leaving the EU as well is itself not out of the question, although more unlikely.

irishh_bob

later10 wrote: »

No of course the EU won't collapse, even the Eurozone itself will not collapse, it is far too ingrained in the world economy to be allowed to disappear. The likelihood - or the possibility, anyway - is that some member states will leave the Eurozone. And some same member states leaving the EU as well is itself not out of the question, although more unlikely.

i think a weakened euro will be the very least outcome , cant see the euro buying 1 . 50 dollars anytime in the future

later12

What's so weak about a Eurozone sans les Misérables?

Imagine a Eurozone with only Germany, Benelux, France, Austria and other core powers? Sounds more like a D-Mark than a Euro. This could be bad for Eurozone competitiveness, of course, but it's hard to argue that it would be bad for the value of an Euro nua, or that nobody would be buying the Euro.

The danger for the EU is what happens in a situation whereby many players in the 'single market' start jockeying for position and devaluing against one another to break away.

rodento

Read something a couple of years ago that predicted that europe was planning something like this to force greator ecomonic intergration and tax harmonization

Sand

Looks like Credit Suisse is backing the idea that the ECB/EU plan to default without a CDS trigger is behind the recent events in Italy. The existence of CDS allow for investors to protect themselves from a default - with the ECB insistence on preventing CDS from being tiggered, investors are becoming increasingly risk adverse.

Italian 10-year bond yields went above 6 percent for the first time since 1997 on Tuesday, reflecting a self-fulfilling investor concern that the euro zone debt crisis was spreading.

Essentially, the bank believes that investors are no longer willing to put their faith in credit default swaps (CDS), the insurance policies against a bond defaulting.

This is because attempts are being made to reschedule the government bonds of Greece -- the most vulnerable euro zone economy -- without it being designated the kind of event that would trigger CDS payments.

As a result, Credit Suisse said, investors are protecting themselves by betting that the yields of Italian bonds will widen against core German ones.

It underlines the insanity of the ECB policy that theyre trying to destroy one of the foundations of demand in the peripheral debt market.

Sand

More evidence of the ECB/Trichet's malign influence on the reaction to the crisis is found in this story where consideration now has to be given to helping Trichet and the ECB extricate themselves from the corner they have painted themselves into.

There is of course no need for the ECB to reject Greek bonds as collateral - they set their own standards for what they will or wont accept - but because Trichet has stupidly staked the ECBs credibility on his simplistic "no credit event, no selective default, no default" dogma , this workaround must be employed to support the peripheral banks.

Trichet's ECB is increasingly being recognised as part of the problem, not part of the solution. His retirement in October cannot come soon enough - we can only hope that Draghi will prove to be a helpful influence.

Is mise le key

rodento wrote: »

Read something a couple of years ago that predicted that europe was planning something like this to force greator ecomonic intergration and tax harmonization

I think that may have been the No to lisbon campaign literature.