Enrico Grazzini on President Macron’s moves to block an Italian takeover of a major French shipbuilder and how the subordination of Italian governments to Europe are reducing Italy to ‘Third World’ status
European ideals mask the nationalist interests of the powerful. French President Emmanuel Macron decided to nationalize Stx, France’s largest naval shipyard, just in time to stop in falling into Italian hands; and Macron in Libyan lands plays solo, without Europe and against Italy, for oil and against immigration. France always pursues its own interests and, just like Germany, cares not a jot about Europe when its own nation has something to lose. The lesson is clear: Italy must start defending its sovereignty and national interests, protecting its strategic assets with intelligence and resolve, with the help of parallel currency.
In Libya Macron is working to bolster the French oil company Total and is seeking to wrestle Libyan oil from Italy’s ENI through its extensive military presence in North Africa and the (futile) diplomacy to secure an agreement between the two Libyan leaders Sarraj and Haftar. In France, Macron has ripped up agreements signed between Finmeccanica and Stx, nationalizing the latter at a stroke, in order not to surrender its shipbuilding industry to the Italians. He invokes (perhaps rightly) the strategic interests of France in the industrial and military sectors.
However, in Italy, the French financier, Vincent Bolloré, who with about 8% of the capital is already the second largest shareholder in Mediobanca, Italy’s leading Italian business bank, has acquired control of Telecom Italia, that is, nothing less than our communications, thus directly threatening Italy’s strategic interests not only in the industrial field but in national security.
Of course, supported by the French government, Telecom Italia wants to make a sting: it will probably sell mobile phone subsidiary Tim Brasil, the jewel of the group, and then Italian TIM to a French or German operator. It is obvious, however, that the German or French governments would never (reasonably) dream of surrendering their communications network to a foreigner (1). In Italy, however, in the name of economic liberalism and Europeanism, irresponsible governments have sold Telecom, and all the sensitive information that travels across its network. But that is not all: Bolloré aims to take control of Silvio Berlusconi’s Mediaset, that is, a very important piece of the Italian information system (or disinformation?).
France and Germany dominate Europe. After the Greek tragedy caused by the financial inflexibility (and usury) imposed by Berlin and Paris to support their big banks, and following the consequent sale of many Greek companies to Germany and other foreign countries, the initiatives of Macron demonstrate once more clearly that Europeanism is primarily used to cover the economic and strategic interests of the countries prevailing in the eurozone and international finance.
French capital takes Italian banks
France is a great financial power and French capital could seek to acquire the main Italian financial companies, such as Mediobanca, Unicredit and Assicurazioni Generali. In fact, Mediobanca’s primary shareholder is Unicredit (8.56%), which is already headed by Frenchman Jean Pierre Mustier; The second largest shareholder of Mediobanca, as we have written above, is Bollorè. The French presence in Mediobanca is therefore very strong, if not prevalent. Mediobanca is in turn the main shareholder of Generali. Generali already has a managing director, Philippe Donnet, who holds a French passport. Thus the final French attack on our biggest financial jewels will likely be aggressive and has a strong chance of success. We need to defend ourselves: Without these companies (and without an Italian telecom network), Italy will not count for anything in Europe and the world. Our kids will be forced to beg for work abroad.
The reality is that France and Germany are waving the flag of Europe but are simply serving themselves. If we sell the few industries and strategic businesses that remain here, there will be no future for Italians. This is the lesson: you must not be deluded that you can reform Europe, you must not rely on Europe. Instead, it is necessary to regain national sovereignty, because without sovereignty, without decision-making power, there can be neither prospect of development nor democracy.
Selling our sovereignty
Unfortunately, however, Italian governments have always bowed before and showed great reverence for Europe. Not only did the centre-right and centre-left Italian governments approve Maastricht and cheerfully sold our monetary sovereignty (which is political sovereignty) but have also enshrined the [deflationary] Fiscal Compact in our constitution. Matteo Renzi’s Democrats have discovered only now that the Fiscal Compact would reduce Italy in rubble, and that without [pro-growth, economically] expansive policies it is impossible to govern. It is now evident that the austerity of the European Union makes member states ungovernable.
But Europeanism is not a disease that affects only governments. It also concerns, and perhaps above all, the Left. Almost all the Left is blinded by its uncritical and dogmatic Europeanism. In the name of Europe and the ideals of Altiero Spinelli, the Left has become an ideological accomplice of the fierce austerity policies that hit all social classes, popular classes, middle class, and small and medium entrepreneurs, and that have depleted the whole nation.
Once the Left boasted a national role, defending not only the proletarian and popular interests but those of the whole nation. Now the Left has turned to the ideals of the United States of Europe, in the name of internationalism (of capital), abandoning national interests (and also the people). But even the 5 Star Movement is uncertain whether to counter the euro or instead reform the policies of the eurozone.
Feeding Salvini’s extreme right
Thus the extreme right of Salvini and his associates may lie that they will defend the nation and the Italians on the skin of ordinary citizens, innocent refugees and immigrants who risk death to find work and peace. Beyond the most noble of ideologies and dreams of its beginnings, this European Union, founded on free movement of capital and competition, has become a system of domination, of the strongest over the weaker financial systems, of the creditor over the debtor countries.
The euro, being a strong and deflationary currency like its German ancestor, works against the weaker nations. The single currency – one central bank for 19 different countries – a single monetary policy, a single interest rate and a single exchange rate for 19 different countries – is a straight jacket that delivers the financial and commercial domination of the more powerful nations.
For the weaker countries (those with high trade deficits and high public-private debt) the euro is a foreign currency that forces us to succumb to creditors. Indeed, the abc of political science tells us that every international body built on intergovernmental treaties is dominated by the strongest states, such as the United Nations, where the big 5, US, Russia, China, France and Britain, have the right to veto, and are therefore freed from any international ties.
Even in the EU, the strongest nations (and big finance) dominate, respecting the rules only when they suit. After the tragedy of Greece subjugated to Berlin, and after Macron’s manifest nationalism, the political ignorance of those who promote illusions about European federalism and the federal superstructure of Europe, and those who want to sell out even more sovereignty, have no more excuses or justifications. Those who continue to blindly invoke the reform of the European institutions and the single currency – with proposals such as a common tax policy, eurobonds, a European treasury minister etc. etc. – should finally open their eyes. United Europe is an illusion, or rather a nightmare because it involves the submission of the weakest to the strongest.
Germany and France will never surrender their power to a federal supranational body that they can not control completely. The German government is already very critical of the European Union’s only European body, Mario Draghi, which, by defending the euro (and hence its very existence), had to move away from Merkel’s and Wolfgang’s directives Schaeuble, the eager German finance minister. France and Germany will not surrender their national power to the European Union, but will probably strengthen their alliance on military, immigration and foreign policy to face America’s Donald Trump and Russia’s Vladimir Putin. The two governments use the European institutions to exert their hegemony on Europe.
Italy risks being crushed like an earthware pot in an iron vice. It must no longer kid itself into giving even more sovereignty to Berlin and Paris, perhaps with the false hope of an economic recovery in Europe. Despite the media exulting a what is a minor eurozone economic rebound, unemployment, which is the main sign of a diseased economy, remains very high. There is no real turning point in either Italy or Europe. The eurozone crisis is structural and may blow up again at any time, for endogenous reasons (like the end of quantitative easing) and exogenous – such as an international financial crisis.
When – soon, probably already in 2018 – QE ends – that is the monetary expansion with which the European Central Bank is spending money in favour of banks and European states with purchases of their public debt – then the problem of Italian debt will re- emerge with great volatility. Without the ECB’s cover, financial speculation over the public debt will widen spreads, the difference between Italian and German interest rates. Interest on Italian debt will again be difficult to sustain.
Hence the need to defend national interests immediately. Hence the urgent need to defend Italy’s industry and savings and to resort to, and above all, the mass introduction of a parallel currency, or rather, one complementary to the euro.
Time to defending national interests
The finance minister Pier Carlo Padoan pleads flexibility to the EU Commission while for nine years France has a public deficit above the stupid 3% of GDP, set by the Maastricht treaty. Padoan supinely seeks the rescue of Italian banks with the ECB’s Supervisory Authority, which denied any “state aid” until the last moment, while Germany – obviously with the immediate and servile assent of the EU Commission – could save its banks with 250 billion euros of public money.
Germany and France do what they want, with or without Europe. Italy, however, passively follows the anti-constitutional rules dictated by non-elected bodies and without any responsibility to the citizens and the voters. Until when?
Thanks to the austerity policies of the eurozone, we have witnessed a vertical fall in GDP and a rapid growth in public debt.
Over the past ten years we have lost 130 billion euros in GDP and unemployment has risen to 12%. Our average income is lower than in the early 1990s, the International Monetary Fund says, pointing out that we will have to wait another decade for per capita income to return to pre-crisis levels. The share of Italians at risk of poverty has increased to 29%, with a 44% peak in the South. According to the IMF, in this picture “Italian emigration will remain high” (2).
It is impossible to say rationally that with the Lira we would have done worse. We would have faced an economic shock through devaluation, but then we would have bounced back with expansive policies. It is impossible to blame the abrupt decline in GDP to the poor productivity and competitiveness of Italian industry. The truth is that the euro has hit our economy like a tornado.
Renzi finally rebels?
It seems that finally, with some years of delay, former Prime Minister Matteo Renzi, PD’s current leader of the governing party, is beginning to rebel against Europe’s austerity: Renzi has announced the firm rejection of the Fiscal Compact. According to Renzi’s electoral program, the Democratic Party will ask the European Union for a (modest) expansion, ie a return to Maastricht parameters. The annual public deficit would reach 2.9% and the Italian government would have 30 billion more vailable to lower taxes. Renzi also proposes a pro-active state intervention in the national economy using the part-public Cassa Depositi e Prestiti, which could become a sort of new IRI [the once mighty holding company].
Pier Carlo Padoan – the “technical” minister of the economy, who owes his career not to Italian voters but to his faithful membership of international organizations does not approve of Renzi’s proposals. But the ex-premier, a consummate politician, knows perfectly well that by passively following the dictates of international financial capital and EU institutions he would lose even more public support, and even if he won the elections, would not be able to govern by pursuing austerity.
Thus he asks for concessions from the EU. Unfortunately for him, however, it is very difficult for the EU to break with the absurd rules of the Fiscal Compact and permit deficit-financed pro-growth economic policies. Even the 5 Star Movement strongly rejects the Fiscal Compact. But it risks making the same mistake as Renzi. Many, too many, believe that the European Union can be reformed progressively.
Five Star plan
Economist Marcello Minenna, who appears to be the main reference point of the Five Star economic policy, proposes to the ECB and the EU to implement a series of reforms to create “Eurozone 2.0”, or a system capable of reducing risks of governments defaulting on debts between the various countries of the euro in order to eliminate speculative threats in the financial markets and to kick-start the recovery. (3). The most interesting part of Minenna’s proposal is that at the end of quantitative easing, the ECB will acquire all public debt bought by national banks thanks to the QE. A and freezes it indefinitely. In this way most of the eurozone debt would disappear as if by magic (4). European public debt would fall by more than 2 trillion in total and the economy of the old continent could resume.
These paper projects are beautiful; but the more they appear incisive and potentially effective, the less politically feasible. They will almost certainly remain on paper. Simply because there is no political will to pursue them by the leading nations. Germany and France will never accept a revival in Europe, ie the economy of competitor countries as this will hurt their interests. Minenna proposes that eurozone countries share risk; others point to debt or debt sharing, to create a European federal fund, a European bank deposit insurance, unemployment, etc. etc. But asking the European Union and the ECB to implement cooperative reforms is like asking a thief, having entrusted him with the keys to your home, to look after your silver and gold …
Italy is now largely de-industrialized and many of the major industries have been sold or emigrated abroad: the cases of Telecom and Fiat are paradigmatic. In the name of globalization, Italian governments have renounced all forms of industrial policy and, to enter Europe, have hastily demobilized the entire publically owned industrial sector. They privatized Telecom and the major national public banks (Comit, Bank of Rome and Italian Credit), but most of these public assets were lost or went abroad. The responsibility of the decline is obviously not only of Europe and of globalization, but of the weakness and inability of the national capital, and of myopia) of Italian governments. However without Fiat anymore, without Pirelli (now Chinese-owned), without Telecom, without publically owned industry leading the way for small and medium companies, with [steel company] Ilva and [flag carrier] Alitalia falling into foreign hands, Italy has shed its skin and is becoming a colony. The decline is not just in industry and manufacturing.
Foreign control of Italian savings
“The map of banking power is changing: the hands of the funds on Italian finance. Over the last few months, the massive presence of giants such as Vanguard, Norges Bank and Blackrock have emerged, capable of dominating the main shareholder meetings.” This is a recent title of an interesting article in the newspaper Repubblica on Italian banks (5). Italian savings are increasingly in foreign hands, and leaking abroad. Aside from IntesaSanPaolo, where the banking foundations still have a steady control, Unicredit and other major Italian banks are now largely led by foreign shareholders who certainly think more of their portfolios than the interests of Italian savers.
The euro and the subordination of Italian governments to Europe are reducing Italy to a status that was once called Third World. The Italian landscape is dramatic both in economic and political terms. We have only one strength that still saves us from full colonization and the arrival of Troika: the positive balance of trade. We export more than we import. Only for this reason, and for the ECB’s QE, have we not yet met the same end of Greece. But exports are not enough to enrich a country: for a real economic breakthrough, internal demand must be revived.
Public, national solutions
To do this, it is necessary to relaunch public investment in the strategic fields of industry and finance. But above all, it is necessary to find monetary resources to raise spending by households and public investment. Only if domestic demand is boosted is also possible to revive private investment and employment.
To re-allocate domestic demand, the state should issue securities with a fiscal value – valid that is to pay taxes after three years from issue – and these securities should be distributed free of charge to households, businesses and public bodies in order to increase their spending capacity.
State bonds can immediately become euros to spend on the real estate market due to their conversion in financial markets, just like BOTs, BTPs (6). The issuing of the new state currency for some tens of billions of euros would have a decisively positive effect on the national economy. GDP would increase to such an extent that it does not create tax gaps when these fiscal or tax credits expire. The complementary currency would lower the debt / GDP ratio and mean we would not be forced to leave the euro, and so avoid another serious crisis with uncertain results (7). With the new currency sovereignty, democracy and national unity would be greatly strengthened (8).
Italy is falling apart; it is becoming a colony under the control of EU institutions and financial capital that, speculating on public debt, imposes its depressive policies to the detriment of national development. The financialization of the European economy causes a crisis and demands the sale of national jewels. Fiscal currency and national industrial policy become indispensable to counteract disintegration.
1 One of the most explicit and exemplary positions of abstract left-wing pro-europeism was articulated by Marco Bascetta in Il Manifesto, when he criticized my article , an article in the same newspaper; this criticised the acquisition of a majority stake in Telecom Italia by the Spanish company Telefonica. Bascetta’s leader article stated: ‘Enrico Grazzini, in his article, stated that “economic patriotism is necessary to counter savage globalization.” All this is worrying … we must organize supranational struggles to transform Europe, combating neo-liberal policies. Below the European level, locked in the national courtyard, one always loses.’ Bascetta did not worry at all about the fact that our telecommunications industry had fallen into Spanish hands, because Telefonica was …. European!!! See “Il capitalismo non ha nazione”: Il Manifesto. Author: Marco Bascetta September 28, 2013.
2 Imf Country Focus, Italy: Reforms Needed For Stronger Growth and Stability, July 27, 2017
3 See the conference on public debt organised by the MS5, at the beginning of July 2017
4 See Corriere della Sera, Marcello Minenna, “Perché il Q-Exit può far male all’Italia” (Why Q-Exit could hurt Italy) “, 24 July 2017
5 See Repubblica, “Cambia la mappa del potere in banca: le mani dei fondi sulla finanza italiana”, by Andrea Greco and Raffaele Ricciardi, 19 June 2017
6 See eBook Published by MicroMega: “Per una moneta fiscale gratuita. Come uscire dall’austerità senza spaccare l’euro” (“For a free tax currency. How to get out of austerity without breaking the euro”) by Biagio Bossone, Marco Cattaneo, Enrico Grazzini and Stefano Sylos Labini, with the preface of Luciano Gallino.
7 See on Micromega.net Luciano Gallino:” A tax money to get out of ‘Austerity without breaking the euro’
8 See EconomicsPolicy.com, Enrico Grazzini i “Quale Moneta fiscale? Un confronto tra alcune proposte” (“What Fiscal Currency? A comparison of some proposals). ” July 14, 2017 (July 31, 2017)
Translation and edit by Revolting Europe