Italy’s parallel fiscal currency: all you need to know

By Marco Cattaneo,
from Basta con l’Eurocrisi

There is an increased talk in Italy about fiscal money as an instrument to resolve the economic crisis, which is not over yet. Despite the optimism shown by the Italian government and the EU, the Eurozone economy is far from being in an acceptable condition, and this applies in particular for Italy.

In 2017 Italy’s real GDP will grow by 1.5% compared to the previous year, which is 6% less than what it was in 2007, ten years earlier! Within the same period unemployment has doubled, the number of people in poverty tripled from 1.5 million to almost 5, and this trend does not seem to be reversing. The Italian economic system is working far below its potential: this gap has been created first by the global financial crisis of 2008 and then by the austerity policies “prescribed” by the EU in 2011. Italy can solve this problem by introducing an adequate quantity of purchasing power in its economic system. It can’t do it by issuing euros, nor (due to the mechanisms of the Eurozone) by increasing the state deficits.

All these difficulties stem from the fact that Italy is not an issuer but a user of the currency, the euro. The introduction of a fiscal currency might help to bypass the constraint that Rome cannot print money and maintain the impression that the euro works. The fiscal money concept goes back to chartalism theorised by German economist Georg Friedrich Knapp at the beginning of 1900 and then expanded by the economists adhering to the “Modern Monetary Theory” (MMT). Continue reading

Poland’s borders entrusted to Rosary Prayer

It is sometimes claimed in the 80ies Poland delivered a death blow to the Soviet system that was in place then in central Europe. At that time the spark was struck by a religious event: the visit by the Polish pope, John Paul II, to his homeland. Today another religious event has attracted hundreds of thousands of people. Will Poland do the same to the EU system?

About a hundred people at the foot of the Karkonosze Mountains in south-western Poland. The border with Czechia is just a kilometer away, across the rocky crests. A group of people, young and old, men and women, families and singles, of all professions and walks of life are praying the rosary, repeating two hundred times Hail Mary, interwoven with Our Father and interspersed with short meditative texts. The group is headed by a professional female tourist guide. It all takes up full two hours, out there, in a romantic setting of a forest, with towering mountains.

It’s not an isolated group. There are approximately four thousand of them around Poland, posted along the 3.500-kilometer-long Polish border, gathering altogether at least one million Catholic men, women and children, which is a modest estimate, given by the mass media not particularly close to the Catholic Church. The prayer action had long been promoted by well-known celebrities from the world of sports, entertainment, and politics who also take part in it. Poland’s Prime Minister Beata Szydło, whose son is a priest, expressed her support for the action by way of Twitter. People pray in the open, in churches and chaplets, on mountain tops, on the beaches and on boards of boats and ships. Continue reading

Catalonia’s independence is a retaliation for the 1939 defeat

After 80 years, the civil war in Spain has found its conclusion in the current attempt of tearing away Catalonia, ruled by successors of the republicans, from Spain. The referendum and the secession is clearly a retaliation on the part of the left for the defeat suffered in the years 1936-39 and for General Franco’s long rule.

The violent independence referendum in Catalonia, in which the vast majority voiced their support for secession is a part of Catalan tradition of rebellion against the conservative rulers and monarchs in Madrid.

Some of the commentators are of the opinion that Catalans wanted to stop Madrid from redistributing the wealth produced in this province and assigning it to poorer parts of the country; some others look at the phenomenon from a political or ideological perspective. For a long time Spain has been the battlefield between adherents of the political right and left. In 1909 during the Tragic Week (la Setmana Tràgica) the anarchist, anti-militarist, and anti-colonialist rebellion in Barcelona was crushed with heavy-handed methods. General European condemnation in the press was immediate. During the 1936-1939 Spanish Civil War Catalonia was a “republican” stronghold, supported by the Soviet Union and communist volunteers from across Europe. Continue reading

No future for Africans in Europe

An exclusive interview with Anna Bono for Gefira
Guest author: Daniel Moscardi

GEFIRA asked in an exclusive interview the opinion of an expert on Africa about the current situation in Italy, about the “asylum seekers” coming mostly from sub-Saharan countries. Professor Anna Bono recently made headlines in Italy with a book that completely debunks the ongoing narrative of “poor Africans” running away from starvation and knocking on wealthy Europe’s doors through Sicily or other ports of southern Italy.

Prof. Anna Bono has been a researcher in African history and institutions at the University of Turin until 2015 after living many years in Africa. She has collaborated as an expert on Africa with a number of Universities and Institutions, including the Italian Ministry of Foreign Affairs, and written over 1600 articles, essays and books on topics such as international relations and cooperation with Africa, as well as demographics and migrations.

GEFIRA: Can we identify one of the more specific events as the beginning of the ongoing biblical numbers arriving in Italy?
ANNA BONO: It all started with the removal of Qaddafi. Qaddafi, bound by the 2008 treaty of cooperation with Italy, implemented an effective control of Libyan coasts, thus preventing the departure of migrants from other African countries. The numbers of arrivals of Africans to Italy prior to Qaddafi’s overthrow were manageable; moreover, they were not organized as they are today. It is important to remind Europeans that Libya prior to 2011 was a relatively wealthy and stable country, hosting approximately 1 million foreign workers mostly from sub-Saharan Africa. When the civil war broke out, some of these foreign workers went home, but the majority started to look for ways of crossing over to Italy.

G: Could we define the current demographic growth of Africa as “unsustainable”?
AB: Not necessarily. Africa, remains, after all, the least populated of all continents. The bottom line is all about Africa’s resources. The way these huge natural resources continue to be mismanaged – to say the least – is at the core of every possible discussion about the continent. The economic policies of most African governments fall short of any real accomplishment, with the result that only a fraction of the population receives any benefit, with corruption, deeply ingrained in most African countries, remaining as the chief obstacle to a serious and harmonized growth. Thanks to institutionalized corruption, Africans are literally squandering away their resources. One example: Africa exports oil in huge quantities, but then lacks refineries, and therefore imports refined fuel.

G: Most corrupted countries? Continue reading

A global conflict is knocking on the door

Another world war is looming large. China’s technology is advancing rapidly, while Russia is rich in resources, and the United States is still a world power. Who will win is uncertain. Future combat will verify the military might of the warring parties. The first world war started in Bosnia and Herzegovina; the second in Poland; will the third one start in the Far East?

Geopolitics and geostrategy deal with social and political processes and are preoccupied with the problem of the security of states relative to their location on the globe. Jacek Bartosiak, the advocate, doctor of social sciences, author of “Pacific and Eurasia. About War”, co-founder of the National Center for Strategic Studies, is a Polish expert in this field.

His views are worth discussing as they touch on the key global problems. He presents timeless rules governing politics and deriving from history, the mother of all knowledge. He analyzes the current political situation and draws conclusions for the future. His point of view differs from the one presented in most of the current studies and draws on the original theory of 1904 developed by British geographer and politician Halford Mackinder, which according to Jacek Bartosiak is still valid despite the development of technology.

For all practical purposes the globe contains one continent, Eurasia, and the rest are just islands. He who rules this continent rules the world. Eurasia can be divided into two zones: heartland (centre) and rimland (edge). The heartland has limited access to the sea, which hinders its participation in world trade and thus contributes to its economic weakness. So, in order to be able to play a role in the world, heartland countries, like Russia, tend to have strong armies and governments.

Rimland in turn is a coastal area which can benefit from cheap maritime transport while trading with the world and so is generally better developed. Profitable location favours capital accumulation. Rimland countries, like those of Western Europe, tend to fall under the dominance of a player with the strongest fleet. Heartland and rimland are separated by a crush zone where tensions accumulate and wars break out. Poland, and Ukraine, to give an example, lie in such a zone. Continue reading

The Kremlin has Trojan Horses All Around

President Putin is the world’s master of Trojan horses. According to the Western press he can handle them all over the globe, whether it is the White House or the Turkish military industry.

The Trojan horse, one of the myths and symbols handed down to us from antiquity, has always had a political application, also at present. Recently, this term has been frequently used by the Polish opinion-forming political news outlets in reference to a number of countries. Gazeta Wyborcza poses the question whether Turkey is Russia’s Trojan horse within the NATO.The question seems to be well-grounded especially when we think of the rapprochement between Ankara and Moscow and the purchase by the former of the Russian anti-missile defence system S-400.

The na:Temat portal ran a text entitled “Bulgaria: the Trojan horse of the European Union?” in which among others it informed the readership that 49% Bulgarians did not approve of the sanctions imposed against Russia by the UE. Continue reading

Spanish debt will spin out of control if Catalonia declares independence

What would happen to Spain in case of Catalonia’s secession? In terms of the debt sustainability parameters laid down by the Treaty of Maastricht, it’d be the Eurozone debt crisis 2.0. As Spain now maintains the second year of 3% GDP growth, an even bigger, immediate fiscal threat is looming. After multiple ineffective referendums in the previous years, this time the Catalan government is likely to finally assert independence. What will it look like against the background of the Maastricht financial requirements?

Debt to GDP ratio

The Treaty of Maastricht says it should be 60%. Spain’s debt to GDP ratio was 39% in 2007, but after the financial crisis it gradually rose to 99.4% today. Should Catalonia leave, there are two possible scenarios:

  • Catalonia agrees to take a share of the Spanish total debt, as a “divorce bill”, because after all it benefited from the government spending in Catalonia itself;

or

  • Catalonia leaves without taking any share of the total Spanish debt.

In the first case, nothing would change, assuming Catalonia would agree to take the share of Spanish debt equal to its share in Spain’s total GDP. In that case, Catalonia accounts roughly for 20% of the Spanish GDP, which means it would take 20% of the Spanish debt. Given that the Spanish debt is right now almost the same size as the Spanish GDP, calculations are rather simple. Continue reading