Italy Openly Discusses Euro Exit in Parliament: Debt Restructuring or “Italeave” on the Way?

• Italy Openly Discusses Euro Exit in Parliament: Debt Restructuring or “Italeave” on the Way?
  by Mish, https://mishtalk.com/
  In Europe, where it is essentially taboo to publicly discuss anything deemed politically incorrect, some interesting conversations are taking place in the Italian parliament regarding the future of Italy in the eurozone. Via email, Eurointelligence asks Is Italy heading for debt restructuring or euro exit?
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  We are reporting from an important conference in Rome yesterday that has caught the Italian news headlines this morning – on the future of Italian public debt. It was organized by the Five Star Movement, held in the Italian chamber of deputies, and openly discussed issues such default mechanism inside the eurozone, sovereign debt restructuring mechanisms, parallel payment systems, and of course euro exit.
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  What is important about this debate is that it is now taking place in public – you can’t be more public than inside the parliament. Italians, not only the Five Star Movement, are openly talking about these issues.
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  One of us was on the podium, where we reiterated our criticism of the Five Star Movement’s previous-held cavalier notion of a euro referendum. The essential point we were trying to make in the debate, well reflected in this morning’s coverage by the main newspapers, is that euro exit is not a decision to be taken lightly. The announcement of a referendum would produce a financial crisis and might turn into a self-fulfilling prophecy. Euro exit belongs to the category of things that, citing Shakespeare’s Macbeth, “if it were done when ‘tis done, then ‘twere well It were done quickly“.
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  Path Towards Italeave
  I have noted before that all of Italy’s major political parties with the exception of Matteo Renzi’s Democratic Party have flirted with or actively support leaving the Euro. The path to Italeave is a difficult one, requiring a referendum and a constitutional change, but trouble is brewing on a huge number of fronts simultaneously:
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  1. The Italian banking system is insolvent
  2. Another refugee crisis is brewing (this time via boats from Libya)
  3. Italy’s youth unemployment is a whopping 37%
  4. The ECB is the buyer of only resort for Italian bonds
  5. Italy’s debt to GDP ratio is over 130% to the consternation of Eurozone officials
  6. The global recovery is extremely long in the tooth
  7. Italy made no progress during the recovery
  8. The topic of Italeave is no longer taboo
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  Any number of things could start a chain reaction making Italeave look good to a majority of Italian voters.
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  read more.

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