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Thread: Italy turning sour on the euro

  1. #1
    Senior Contributor Toby's Avatar
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    Italy turning sour on the euro

    Two reasons why Italians are turning sour on the euro


    The euro zone's greatest existential threat may no longer center on small, peripheral countries such as Greece and Portugal dragging it down, but instead on the prospect that its third largest economy, Italy, could abandon ship.
    Two recent economic reports show what the euro has meant to Italians and why polls suggest they are no longer keen. One suggests they are poorer as a result of being part of the currency bloc, the other that they are falling further behind their counterparts in main trading partner Germany.
    It is a distant risk to the currency bloc that Italy will actually walk away, but not beyond imagination.
    Italy's 5-Star movement, which wants to dump the euro through a referendum, has been surging in opinion polls recently, getting as much as a third of the vote in a March Corriere Della Sera poll. The anti-European Union Northern League got another 12 or so percent - and there are others.
    But actually leaving the euro zone would come down to whether Italian voters believe 15 years or so of the currency had been good or bad for them.
    The recent analyses suggest it has been the latter. Consider, first, how much Italians have to spend.
    A December report from Eurostat, the European Union's statistics agency, looked at GDP per capita - the economy divided by its people - in terms of purchasing power between 2004 and 2015.
    Assuming a base of 100 for the EU's combined 28 countries, powerhouse Germany rose to 124 from 120 over the period. Italy, however, sank to 96 from 110.
    That puts Italy closer to emerging economies like the Czech Republic, Slovakia and Slovenia that it does to Germany. France was pretty much unchanged at 106.
    This means that simply in terms of what they can buy, Italians are poorer that they were in 2004, a few years after they swapped the lira.

    YOUR EURO, MY EURO

    Second are some findings this month from research group World Economics that suggest Italy's problems from its currency linkage with Germany are increasing.
    Germany has become much more competitive as a member of the euro zone. By comparison, Italy has not.
    World Economics takes a basket of representative goods and services in U.S. dollars and compares it in purchasing power terms with the cost in other currencies. The result is its World Price Index (WPI).
    For the euro zone, the index allows for counter-intuitive comparisons between member countries - essentially creating German euros, French euros, Italian euros and so on.
    Over the past two years, the "Italian euro" has gone from being 3 percent overvalued to 4 percent undervalued in the WPI, effectively a better position vis-à-vis the dollar.
    But the difference between it and the "German euro" has widened by two percentage points as the latter has become 14 percent undervalued.
    This means Italian businesses exporting to Germany, their top destination, are facing worse conditions than previously. It also make German imports cheaper and therefore more competitive domestically.
    World Economics points to other euro zone countries that have a worse problem -- France and Greece, for example - but suggests that Italy is a new fault line for the euro zone.
    "Italy looks like becoming the next 'domino' to suffer from the strength of the German economy as trends ... have become much more pronounced over the past 12 months," it said in a note.
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    None of this may be caused by the euro per se, or be enough to outweigh the benefits of pooling a currency and the protection that can bring.
    But added to other factors - annual GDP growth struggling to reach 1 percent, for example, or declining capital investment in business and infrastructure - they do go some way towards explaining why fewer Italians tell pollsters the euro is a good thing.



    http://uk.reuters.com/article/us-eur...-idUKKBN17E1K0

  2. #2
    Italy is a very inconsistent region, at least economically. There are some rich regions which hold up the rest of the, not very developed, country. The euro zone has turned out to be helpful for them, but the regular people see it as something that brought a crisis to their lands, so their opinion is understandable.

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    Senior Contributor Toby's Avatar
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    Quote Originally Posted by Margaret64 View Post
    Italy is a very inconsistent region, at least economically. There are some rich regions which hold up the rest of the, not very developed, country. The euro zone has turned out to be helpful for them, but the regular people see it as something that brought a crisis to their lands, so their opinion is understandable.
    Lost count of the people from Naples, Sicily, Calabria, Sardinia. ...That I meet in the UK. .....All young people in their late teens and twenties. None of them say anything nice about the EU. All agree with Brexit.....

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    Senior Contributor Doktor's Avatar
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    Quote Originally Posted by Toby View Post
    Lost count of the people from Naples, Sicily, Calabria, Sardinia. ...That I meet in the UK. .....All young people in their late teens and twenties. None of them say anything nice about the EU. All agree with Brexit.....
    Yep, there is a striking division between the North and the South. The thing is there is no Souxit, only Nordxit.
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    Sticking this here since it's an Italian Economy topic...

    Sicily's economy is so depressed even the mafia is moving to Germany to find jobs

    Once all-powerful in Sicily, the world's most famous crime gang, known as Cosa Nostra, is believed to have started expanding into Germany


    After year's of decline, Sicily's mafia clans are heading to Germany in search of business.

    In addition to being squeezed over the past two decades by an Italian government crackdown on organised crime, with many of its bosses put behind bars, the mafia has also had to contend with a decline in Sicily's economy.

    But a large-scale anti-drug operation in the south-west of Germany has revealed the extent to which Sicily's crime gangs have moved their businesses to Europe's wealthier regions, The Guardian reports.

    Nineteen suspected drug traffickers were arrested in a sting in the town of Villingen-Schwenningen on 21 June, and €4m worth of goods and money seized.

    It is believed the gang were operating in Rottweil and Stuttgart, in Baden-Wurttemberg, the German state with the lowest poverty rate.

    Italian authorities said the gang had smuggled tons of marijuana and cocaine from Albania to Germany and laundered the profits in slot machines, which they had forced the owners of local bars and shops to install.

    They also suspect drug trafficking profits were used to buy weapons in the Balkans.

    Once all-powerful on Sicily, the world's most famous crime gang, known as Cosa Nostra, "Our Thing," is also believed to have started expanding into Germany.

    Although Cosa Nostra has faced numerous setbacks, no one believes it is dying.

    After years of decline, with the Calabrian 'Ndrangheta overtaking it as Italy's most powerful mobsters, prosecutors believe it is trying to rebuild, starting with its drug trade.

    Italian prosecutors say the 'Ndrangheta has a stranglehold on cocaine trade, but Cosa Nostra is a major player in the Italian hashish market, often importing the drug from northern Africa and selling it throughout Europe.

    In March, police found 400kg (880lb) of hashish, worth an estimated €3m, floating just off the Sicilian coast after a drop-off went awry.

    In May, police seized around 300kg of hashish in a single raid in Palermo.

    "For a while, the Mafia depended on public work scams and extortion rackets for much of their money, but with the economy in such a dire straits here, they are returning to their old drug habits," a senior anti-Mafia magistrate told Reuters, declining to be named because he was not authorised to speak publicly.

    Sicily's economic output fell more than 13 per cent between 2008 and 2015 and is only slowly recovering, while the jobless rate is 22 per cent, twice the national average.

    The deep recession has made it much more difficult for hard-up businesses to pay protection money, or "pizzo" in Italian, to the Mafia and more than 1,000 firms have revolted against paying that in Palermo alone in little more than a decade.

    The state's fight against the Mafia only got serious in 1992 after the group murdered two of Italy's top magistrates, Giovanni Falcone and Paolo Borsellino, triggering national outrage and finally forcing complacent politicians to act.

    Successive governments introduced waves of anti-Mafia laws, allowing the state to seize mob assets, keep imprisoned mafiosi incommunicado and far from Sicily, and develop protection programmes for informers.

    As a result, hundreds of mafiosi have been arrested over the past 25 years, including Salvatore "Toto" Riina, the Boss of Bosses, who ordered the murders of Falcone and Borsellino. He is 86 and believed to be terminally ill and likely to die in jail.
    http://www.independent.co.uk/news/wo...-a7814961.html

    A bit misinformed in assuming that the mafia is moving to Germany recently. They've been here since the 60s. What is new though is that the Cosa Nostra is becoming active - Germany and Baden-Württemberg in particular is 'ndrangheta country, with Stidda and Camorra also somewhat active. In Germany, being a member of a mafia group is in itself not illegal; hence, while the groups tend to like to stay undercover, it's pretty well-known just which groups have whom in the country.

    The arrests alluded to were part of a larger sting operation underway since about mid last year; what forced the police's hand were some shots being fired on a restaurant four weeks ago, the main suspect is among the arrested. Since Villingen-Schwenningen, the town where this took place, is also United Tribuns territory as far as organized crime goes they had to do something before it escalated beyond just some internal cleanup. The nineteen arrested amount to the entirety (!) of Cosa Nostra members believed active in the state.
    Baden-Württemberg is home to one-quarter of all Italians in Germany, and one-third of all mafia members active in the federation. 'ndrangheta by comparison has about 140 people in the state, 80 of whom are considered "active".

  6. #6
    tankie Military Professional tankie's Avatar
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    How are they getting on with the Ivan mafia ?


    Trust gets you killed, love gets you hurt, and being REAL gets you hated.

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    Quote Originally Posted by tankie View Post
    How are they getting on with the Ivan mafia ?
    By dividing work. The Russians are mere street thugs to any proper mafia in Germany*. Somewhere around a quarter of them are also in jail by now.

    * Exception is that group that ran that just uncovered nursing care scheme. That was Italian mafia level.

  8. #8
    tankie Military Professional tankie's Avatar
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    Cheers .


    Trust gets you killed, love gets you hurt, and being REAL gets you hated.

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