RE: Populism is Popular in Italy -- Brussels is in Trouble
If by austerity you mean withholding taxes from the southern regions, then yes. But, at the same time, they wouldn't lose access to the EU markets if they left the euro... though the EU would threaten and bluster all day every day about that. Moreover, reimposing the Lira would lower the cost of those products to sell to an over-priced euro-zone as well as the rest of the world.
The euro is strangling Italy at this point and that, frankly, has always been the plan. The Northern League has been openly secessionist for more than a decade on this very issue. They know that their customers in Europe will still buy their stuff. It will be Brussels that will have a hissy fit, but Brussels is very vulnerable right now, given that the ECB is literally the only buyer of Italian debt.
And that problem is the ECB's problem, not the Bank of Italy's. When you owe the bank a thousand dollars it's your problem, when you owe the bank 300 billion dollars? that's the bank's problem.
I think it's obvious to most that many EU countries are moving away from the German vision of the EU, but as you mentioned above, in the case of the Vicegrads they aren't necessarily all moving in disparate directions. Most of the skeptics, me included, think break-up is inevitable, but for the fun of it are any of these situations possible? A. Blocs form their own (Eastern) EU, B. France plays ball with the Blocs (or Italy + France) to wrest control from Germany, C. Germany folds on immigration to maintain status quo, D. We're all just Russian puppets trying to sow discord
I think the most likely scenario is that the south breaks off because it's in their interest to do so. And the Euro becomes a northern eruopean currency bloc because that's where the comparative advantages of each area are aligned.
The least likely scenario, because Germany will never fold on this issue, is to consolidate all of the debts of the Euro-zone into the EU itself and have the ECB be the only issuer of euro-denominated debt.
The time to do this was about 25 years ago.
Germany is already folding on immigration, but still wants to use the politics of it to hammer the Visegrads over the head with it. I don't think it will work... because the major ones retained their own currencies.
And, from my perspective, you have scenario D backwards. Russia wants nothing more than an end of the use of monetary and foreign policy to subvert its re-emergence as an economic engine. Russia's issues are with the power structures in both the EU and the U.S., not with Europeans or individual countries.
The problem is the intensity with which both Americans and Europeans have been gaslighted on this issue many can't see this. And Germany is trying to play both sides to get cheap Russian gas to run its industries and control its flow back to states like Poland and grind them under its heel.
Germany's politicians, in my mind, are the freaking problem, and the German people are beginning to see it for what it is.
Great discussion, BTW. Enjoying this. :)
Certainly better Saturday morning than watching Netflix in chilly Chicago!
What a perfectly concise way of describing that.
That pretty much sums up the entirety of US/China economic relations too doesn't it?