Heiner Flassbeck – Italy is going down the wrong path

We are entering the next round of events in Italy and the wheels are spinning ever faster as we head for a train crash resulting in the end of the euro and the European Union. Northern Europe and Europhile doubters in the South foaming at the mouth with rage against Italian sovereignty have still again prevented a serious debate about the right course for currency union. This is the end of Europe.

Heiner Flassbeck is an economist, as well as publisher and editor of “Makroskop” and “flassbeck economics international

Originally posted in German at Makroskop

Translated and edited by BRAVE NEW EUROPE

It came exactly as I said it before (here), but it went much faster than expected. In Italy, the crisis caused by Northern Europe’s stupid and irresponsible economic policy is already racing a tad faster towards European disaster. With the return of the government mandate by the Prime Minister selected by the coalition of the Lega and Five-Star government, not only are new elections  imminent, but a veritable constitutional crisis is also looming. The way in which the President has interfered in the formation of government may be covered by the constitution, but politically it will lead to a devastating result for his own seemingly pro-European position.

Paolo Savona, the designated Minister of Finance, was probably the motivation for the EU’s political elite to again interfere in Italian domestic politics. One can vividly imagine how behind the scenes, the “good Europeans” in Italy and abroad pressured the Italian president to convince him that Savona is an “enemy of Germany”. Savona’s analysis of Italy’s current financial situation is largely correct. His comparison with the Treaty of Versailles and analysis of what the economic literature calls the “transfer problem” is also an extremely wise consideration (here an explanation and references in German). It is true, as I have often pointed out, that in the country, namely Germany,  that John Maynard Keynes wanted to protect with his analysis of the transfer problem, nobody has yet understood what this is all about. Economic illiterate people simply do not want to be disturbed in their small primitive world at any price.

Has Europe been saved?

All those who have openly offended Italy in recent days, but also those for whom the “anti-European” position of the coalition partners was a thorn in their side, will now surely slap each other on the back. Well done, Europe saved again! But be careful: the Italian people and those who will again campaign to be elected to Italy’s parliament are not as stupid as corporate media would like you to think. Perhaps this people will respond in new elections with a determined “now more than ever” and give the two parties, which that had thrown themselves into the breach for Italy, a resounding mandate that no president can ignore.

And it is already clear what the election campaign will look like. With their position, which makes Europe responsible for many of Italy’s problems, the Lega and Five Star Movement will have an even greater impact on the population. All other parties, on the other hand, could shrink beyond recognition. Then there will no longer be a calm discussion of European options, as might still have been possible, but there will be a political battle, the great loser of which has already been clearly identified: Europe!

Whoever suppresses the truth…

Despite all the storm warnings from Italy, the popular game “Everyone else is to blame, but not us” will continue to be played in Germany in the coming weeks. Now the majority of the parties and almost all media have “declared” that the European misery has been caused the Southern European nations. The North is completely innocent. The generous tribute “those in the South” have paid to the German people – in terms of market shares lost throughout the world – for almost a decade is ignored. Having repressed the truth for so long, you can’t just suddenly pull it out of your sleeve, even if you realise that it’s high time to do so.  The ultra-right German political party AfD, which paradoxically owes its existence to the European lie, mercilessly punishes those who contradict the “German lie” as traitors to the fatherland.

In the case of Italy, as in Greece, Europe “must” now explicitly declare that it simply ignores democratic votes that call into question European agreements or even openly discussing fundamental changes in monetary union policy. This is independent of whether the concerns of the critics are justified or not. Some are simply portrayed as permanent losers, while the others are declared permanent winners. All this is not because the European system works well, but because the winners simply declares it to be without alternatives.

… will reap hatred

Only fools can believe that such a relationship can last forever. No, the hatred will probably increase so much in a few months’ time that serious discussions at European level will no longer be possible at all. The tsunami of stupidity and the insults that Italy has had to endure in recent days, especially from Germany, and which German politicians have not vigorously challenged, have finally burnt all bridges. How will a German government ever meet an Italian government again on equal terms and in a constructive and friendly atmosphere?

What is tragic about history is that France still does not recognise its historical error in having defended Germany’s position from the outset, instead of taking the side of the Southerners. In this respect, Macron is just as much the wrong man in the wrong place as his predecessor Hollande. Only France could turn the situation around by clearly taking Italy’s side and calling on Germany to make changes. But there is probably a lack of both economic expertise and political sense in Paris.

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