E.U., in a First, Rejects Italy’s Proposed Budget

Disappointingly Trumpian/Brexitian/Orbanian comments. Let's face it: out EU/Eurozone club has some rules. They make sense, and we have all signed them. Now Italian government wants to keep its reckless campaign promises, and it is going to blatantly break those rules and risk all of our countries' future. Italy counts on its partners being too timid to let it fail, and it counts on its Eurozonian partners' taxpayers (like me) to foot the bill. A Greece on steroids, in other words. I have sent more money to Greece during the recent years than to my own kids. No more Mr. Nice Guy. Not a Euro from my wallet to the Italians. If and when they fail, it is goodbye and good luck.

A few key points: 1. A stupid one first, but it takes 10 seconds on Youtube to find videos of Mr. Junker drunk and falling down in public. This is a man who governed the economy of many nations with an iron fiscal fist. 2. The Italian government is inhumanly racist - or at least its League component is, and no excuse or defense of them on that field can nor should be made. 3. That said, the Euro regulations are a maximum of a 3% of GDP budget deficit, and the EU has called for Italy to hold to under 2%. The difference between 2 and 2.4% is unlikely to mean bankruptcy. Further, ALL economies were further in debt percentage-wise at the end of WWII and GREW out of it, as the Italians are trying to make happen. EU austerity fundamentalism is holding Europe back. 4. The EU since the Lisbon Treaty has become a prison-house of peoples, though many of us once hoped for more. 5. Max Weber defined capitalism as a system where states must compete for "mobile capital" on the terms dictated by the latter. This is the basis of the lack of democracy inherent in capitalism. Bretton Woods did not end this investor-financier tyranny but it did limit it. The whole world by now should stop tolerating, after 5 plus centuries, the unaccountable rule over democratically elected governments, and whole nations, of "the investor community", which is not a fact of nature, but the most powerful institution of a particular historical epoch, and which one day must end.

Make no mistake, this is the beginning of the end for the EU. Eventually other EU members will realize that a group of unelected bureaucrats in Brussels with enormous authority and no responsibility and member sates with enormous responsibility and no authority is not a stable situation.

I am all for supporting poor and middle class. But that should be financed by cuts for the rich + a hard eye on corruption - not by creating more debt. That debt will have to be paid back - and usually by the poor + middle class like we saw in Greece. But Italian voters cheer on the short term gain. They should request accountability from the 1% (or make that 10%)

Austerity has been a disaster for working people and a boon to the 1%. It has eviscerated heath services, education and welfare. It has supersized the transfer of what’s left of the common good to the wealthy. And what’s as bad it has stymied economic growth in the real economy. Austerity and misery go to together and though I abhor much of what the Italian government is committed to their attack on austerity is a fight worth supporting.

When American presidents complain that NATO countries don't live up to their commitments to fund NATO the allies object to American bullying. When Italy doesn't live up to its EU commitments the union insists that living up to commitments is necessary for economic stability and continental cohesion; Italy objects to EU bullying. Where you stand depends upon where you sit, I suppose. Perhaps NATO and the EU would be the more solid if governments just did what they agreed to do.

It is amazing how the EU Bureaucrats no full well the previous Italian “commitment” was made by the previous Italian government voted out of office, so the new government implements its electoral mandate, and the EU says no can do! The EU crude disrespect for democracy is shocking, and follows the pattern of attempting to punish British voters and government for Brexit. Brits and Italians need to stand firm, Europe is not the EU.

I'm not selling but if you want to see what a mess has been made of the economy have a look at Adam Tooze's new book on the Financial Crisis. It's called "How a decade of financial crises changed the world".

There is no way a confrontation can be avoided between Italy and the EU. Italy is stuck in a structural depression. The EU sees no cause for any economic change. A brick wall and an immovable object. Hmmmm..... Investors should look at this like a forest fire......if it spreads beyond Italy then it could become a massive conflagration.

The yield on the Italian 10 year bond has more than doubled in the past six months. This ripples through Italian economy as banks raise rates and tighten credit. The total debt (sovereign, household, routine commercial and financial sector) in the Italian economy is probably just North of 6 trillion Euros. The impact of higher interest rates on economic activity is going to far outweigh the benefit of the stimulus from the higher budget deficit.

In 1982, I went to Italy and bought a beautiful leather coat made locally. Last year, I couldn't find anything to buy that wasn't a Chinese import or exceedingly expensive. Much of Italy has been turned into a giant Disney Land. Italy was a proud nation which ruled its own future but now it is just a vassal state of the EU. The policies being followed by the current government might not be the best but rejecting open borders, globalization and economic control from Brussels is the right path. Italy needs to balance its budget and trade. They need to run Italy for the Italians. They need to take care of their children.

This is about the doctrine of austerity and Austrian economics. It is not just about bad Italy that wants to have an undisciplined budget. There is method to it that many economists and political leaders refuse to acknowledge. Austerity as it is being done in the EU is erroneous, and that error has harmed the whole south of Europe, to the profit of the lenders of Germany and Britain, primarily their big banks. The way out for mutual gain is to grow out of this mess, and that requires the banks to share the pain of what they inflicted by their financial games ten years ago. So far, they've only profited from their own errors and greed, and they want more. So far, Italy and Spain and others have suffered for that profit of the lenders.

EU is increasingly acting like the estranged father who doesn’t understand and seeks to control and punish its disobedient offspring, the unfavoured sons Greece, Italy and the wayward British. The disfunctional EU. Or maybe it’s the Hotel California, you can check in but you can never leave....

The EU was doomed to fail from the beginning. The idea you can combine and regulate economies between such disparate nations was nonsense from the beginning. Brexit, Italy, Greece, and what's destructively going on in so many EU countries was a future that had to happen.

As an Italian living currently in Italy, it pains me to see those cat-fights and pompous slogans. While it's probably true that we need a stimulus to actually save our ravaged economy, our huge (and sadly increasing) level of corruption is a reality as our lack of efficiency at every level. We can't reform and when we, like M5S, have tried to shake things up, it all goes down to more welfare, more guarantees, more of anything, except what it's needed. I didn't support the left in the past elections, like many others let down by a confused approach to the art of government; it's a pity that what we currently have, not only ignores the basic rules of decency, but shows complete disregard for any critique or assessment. Although in the South some people will rejoice the forthcoming universal income (reddito di cittadinanza), roughly 10.000$ per year, the majority has already realized how we are dangerously playing with fire. As we already know, eventually you burn yourself.

Everyone complaining about Germany should remember the painful restructuring it went through after reunification and then again under the SDP Schroder government. Germany operated under austerity for many years and already reduced its deficits and public debt. Many actually think Germany needs to now increase spending to address infrastructure and social needs. Italy’s problems are the result of enormous levels of corruption, tax evasion, and absurd regulations. It’s basically Greece but with an important industrial sector in northern Italy. Northern Europe has a robust social welfare system, but high taxes, high tax compliance, high education levels, and more liberal labor regulations. Italy wants a robust welfare system but without any of the required sacrifices. Other EU members are not going to let this happen. If they let Italy get away with this, then other EU members will also openly flout the rules. When fundamental EU obligations become optional, the project unravels.

Five Star and League people are shameless quoting Franklin Roosevelt. They have no clue about how to get themselves out of the mess they are only making worse. Roosevelt had a plan, put competent people in place, and united the country. He didn't pit one group against another, as these bigots do. At the risk of blaming the victims, though, until Italians take governing seriously and push back against entrenched systemic corruption, they will suffer. They need to elect people who are serious about public service, not just who want to sew hatred and make cheep points with their base (that's just so american). At the same time, we can see that "Europe" is a house of cards. Northern Europe uses the euro as a blunt instrument to punish their swarthy neighbours to the south. As an Italian both of these phenomena pain me. But it looks like neither side is really interested in solving problems. There shouldn't even *be* sides.

Yup, the whole EU thing is unraveling at an accelerating rate. Won't be long now until that abomination is finally relegated to the ash heap of history. Cleaning up the mess it will leave behind is going to be a non-trivial task. If European history is any guide...

Italy holds all the cards. There is no EU without Italy. Merkel and her underlings in Brussels have to decide whether to hold the hard authoritarian line or preserve the EU. If Italy bolts, the EU is toast. Italy can live without the EU but the EU cannot live without Italy.

“The only thing that we have to fear is fear itself,” Luigi Di Maio, Italy’s vice premier and the leader of the anti-establishment Five Star Movement told reporters” At least someone out there appreciates the “new deal”.

Lets be honest: Europe didn't reject Italy's budget, Merkel and Germany rejected Italys budget.

Italy and Greece should merge. Same "values" and discipline.

'Hate to say it but we've been to Italy more times than we can count, and always always always you can SEE the corruption in the disrepair of buildings and streets, and I mean disrepair of notable buildings we've returned to time and again seeing lasting YEARS and getting worse all the while. Ultimately, it is the people who have failed to rise up and destroy not only the criminal underworld but the corrupt bureaucracy bought and paid for by the Cosa Nostra and their web of under-the-table graft. The banks loaning money to the government?-- how can anyone in their right mind not see how many of these loans have been greased by bankers on the take or they'd have to have been insane to make such loans in the first place. The sooner Italy goes under, the sooner desperate people will see they have no choice but to take desperate measures. And as for the ECB supporting this corruption by loaning even MORE money to the Italian government?-- it's not gonna happen. Ciao, Italia. Bye bye. Game over.

By the end of this year US public debt as percentage of GDP will be about same as Italys, and the US public deficit (federal, state and local) will be about 4%, much more than the terrible terrible proposed Italian budget. Just saying.

The problem with austerity is that it makes the lower and middle classes poorer for the sake of protecting the investment and ruling classes. Heaven forbid investors would ever have to take the fall for their own destructive actions.

In September, there was an International conference in Rome, Italy that was dedicated to the idea of Direct Democracy. https://2018globalforum.com/ Italy's Minister for Direct Democracy (The first such position ever in the Western world) addressed the conference on the first day. https://www.swissinfo.ch/eng/business/-globfor2018_world-democracy-summi... The populist revolution that has been sweeping the Western world has taken a new and bold turn within the realm of Italian politics. In many ways, this populist revolution is now turning into a Democratic Renaissance. Instead of trying to leave the European Union as the solution to the democratic deficit found in the treaties that form the foundation of the European Union. Many now see the idea of a new treaty guaranteeing a role for direct democracy imbedded within the text, as the ultimate solution to curbing Brussels power. Considering that the Italian city states like Florence were the birthplace of the Renaissance, it is just fitting then that the Italians point the way forward once again.

I don't have parents who can teach me how to understand Economics and my university professors recommend that I read Yahoo Finance more often but as you can see, my dreams of becoming an economist have been shattered by the hand that molded the statue, I just couldn't pass my exams for Accounting so I don't know what to do, hopefully things will turn around and hopefully soon. Cheers, thanks for reading this comment. Oh, I think Economics was invented in Italy! Editor’s note: This comment has been anonymized in accordance with applicable law(s).

When unelected beaurocrats - all but one of whom is not an Italian citizen - presume to dictate how duly elected officials of the Italian government must act, the time to exit (Brexit) the European Union has come. Any time governing officials are untethered from the democratic process, the seeds of totalitarianism are sown.

don't let this article gloss over the truth. Italy is a mess. their debt is insurmountable. and their plan to cut taxes and increase welfare spending is not a workable plan. add the current populist movement against immigration and migrants and it becomes a recipe for disaster. and the rest of Europe is not much better. Germany and Angela merkel are in trouble, ireland is looking at hard borders and a return to "the troubles" between northern Ireland and the republic as a result of the UK not being able to resolve the border issue for Brexit. catalonia wants to secede from spain. both Spain and portugal economies are a shambles. the list goes on and on...

The EU deep state needs to step back and evaluate the political landscape. This may not be the wisest stance. Britain, the EU's financial centre and 1 of only 2 functional militaries is going out the door France has a dead-man-walking Pro-EU president Germany has a dead-women-walking Chancellor Sweden has an anti-EU party holding the balance of power Hungry, Poland, Austria have anti-EU governments What benefit will the Italian gov't get from following these dictates?

There's a whole generation of young Italians languishing in under employment or, even worse, unemployment. They're still living with their parents, trying to start their own businesses, or they're working in a cycle of apprenticeships, then learning new technical skills, to only be rewarded with another, temporary, dead end job. They're not marrying, and not buying their own homes, but instead are doomed to spend their free weekend evenings congregating in the nearby piazza, staring at their phones while drinking one euro liter bottles of beer and smoking their own handrolled cigarettes. All this while they ignore scores of young African males trying to sell them lighters, battery powered cute little animal toys, and other trinkets. This is what has become of southern Europe under the Euro and 'austerity'. But the Germans, Dutch, and other 'hardworking' northerners are doing fine, thank you, and have absolutely no intention of doing anything different at all. This 'tale of two economies' does not portend well at all for the future of Europe as we know it today.

The EU negotiators have rightly surmised that the UK's current trend of aping the US (fracking, a corporate decision making process, taking hard positions, trying to bluster its way through) is playing into their hands. The decision to slap Italy in the face was really a warning to the UK. This is not going unnoticed in Europe.

Italy should have reelected Berlusconi, the closest thing to Trump they have, he ran up its debt in the first place, and he still knows how to bunga bunga.

Isn't this what they needed to do a long time ago? The budgets of any country were not to exceed a certain limit. There is no real monetary ability for Europe to control its overall financial picture than by implementing responsible fiscal planning. Why is this even news? Except for the fact that it has played fast and lose with its own rules for a very long period of time, but now is the time to reign it al in, finally. Britain, never really in, is on the way out, and to whom is each the greater trading partner? If the EU can forget them, it will be to the demise of Britain. Britain, on the other hand, cannot forget the EU. It is dependent on them in reality, and this is why it is all such a hard go for Brexit. It's not just the border with Northern Ireland. It is the border with all of Europe that is at stake and the EU has nothing to gain by collapsing in the face of this withdrawal by capitulating to the Brits.