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Fears linger over Greece and Italy
7 November  2011
 ROME - Pressure mounts on Italy's Berlusconi to quit.
Italy became the latest target in Europe's financial crisis Monday, as soaring borrowing rates intensified pressure on Premier Silvio Berlusconi to resign and let a new government reform the country's spendthrift ways.
Berlusconi batted away reports that he was considering stepping down in favor of early elections, saying they were "without foundation."

But the prospect of financial disaster was real because of Italy's huge debts and slow growth. Unlike Greece, Ireland and Portugal — the three countries that Europe has already bailed out — Italy's economy could be too large to rescue.

The ultimate fear is that Italy cannot pay for its euro 1.9 trillion ($2.6 trillion) debt and need international help. Europe would struggle with a bailout that large, meaning a default that could break up the 17-nation eurozone and drag down the global economy.
During a G-20 summit last week, Berlusconi had to ask the International Monetary Fund to monitor the country's reform efforts, a humiliating step for the eurozone's third-largest economy.

The reform measures include a plan to sell government assets — expected to raise euro5 billion ($6.9 billion) a year for 3 years — and tax breaks to reduce youth unemployment of 29 percent and to get women back into the work force in a country where just 48 percent of women have jobs. The legislation would also allow stores to stay open on Sundays and open up closed professions.

CARNIVAL Cruise ships - Costa Concordia

Italy earthquakes, volcanoes

              Posted   <*))))><   by  

ZionsCRY NEWS with prophetic analysis


S&P downgrades Italy one notch to A
19 September 2011  (MarketWatch)
Ratings agency Standard & Poor's said late Monday that it has cut its unsolicited long- and short-term sovereign credit ratings by one notch on the Republic of Italy to A/A-1 from A+/A-1+, with a negative outlook.

"The downgrade reflects our view of Italy's weakening economic growth prospects and our view that Italy's fragile governing coalition and policy differences within parliament will likely continue to limit the government's ability to respond decisively to the challenging domestic and external macroeconomic environment," S&P said.
"We think that the government's projection of 60 billion euros [$81.6 billion] of savings may not come to fruition," it said.

Is 7% the tipping point for Italy?
7 November 2011  MarketWatch

Phil Barach, co-manager with Jeffrey Gundlach of DoubleLine Total Return Bond Fund, which has no European exposure, says:
“ 7% is the crucial number” for the 10-year Italian government bond.
If rates get above 7%, “the markets will perceive that the story for Italy will become like the story for Greece.

There has to be some change there and the problem is that unlike Greece, Italy is huge. There’s no real fix for Italy.”

Barach continued: “ Greece is to the EU like Chicago is to the United States. Italy is probably like California and New York combined.
The EU has to stop dithering and take some decisive action, but it looks like they just can’t get their act together.
By the time they decide to make a decision it might be too late to put out the fire.”


Thousands demonstrate against Berlusconi
Tens of thousands of opposition activists demonstrated in central Rome on Saturday for the ouster of Premier Silvio Berlusconi.
Democratic Party leader Pierluigi Bersani told the crowd that his party is prepared to work with other opposition groups to lead a new government.

"If there is discontinuity and change, we are ready with the other opposition to create a new government," Bersani told the crowd in Piazza San Giovani.
Berlusconi's grip on power has been weakened by the ongoing sovereign debt crisis and infighting in his coalition that has prevented clear measures. Six members of his party this week urged him to step aside to allow the formation of a broader coalition with a centrist opposition party.

The protesters, who arrived on buses and trains from throughout Italy, were joined by center-left politicians from France and Germany, as well as a group of topless female demonstrators from Ukraine known as Femen.
"We are not credible. I am ashamed of how other European countries see us. It is pitiful. This man (Berlusconi), this marionette, must go away," said Mario Puddu, a retiree.

Berlusconi has promised a confidence vote on new legislation sought by the European Union to shore up Italy's economy. The measures include a plan to sell government assets, tax breaks to encourage employment for the young, and getting women back into the work force. The legislation would also liberalize store opening hours and open closed professions.

Italy also agreed at a summit in Cannes to have the International Monetary Fund monitor the reform efforts, a humbling step for one of the world's seventh largest economies with the second largest public debt in Europe.

Italy's borrowing costs to service its enormous public debt at 120 percent of GDP have been rising since the summer, raising concerns of a default if Italy.
While Europe has bailed out Ireland, Greece and Portugal, euro zone leaders say Italy is too big to bail out.

Fears linger over Greece and Italy
Is ITALY TOO BIG to bailouot?  

8 November  2011
Eurozone sketches out stability plan as fears linger over Greece and Italy.
Eurozone finance ministers have agreed on a timescale for a fund to allay market doubts about sovereign debt.
Limited progress was made as concerns remained over Italy and Greece.
The plan unlikely to be finalized before the end of November.
Meanwhile, market pressure on Italy worsened.
Ireland and Portugal also a serious concern.,,15516610,00.html

Italy borrowing rates hit new record as vote looms
8 November  2011
The Italian government cost of borrowing has risen to a new record
Investors fear that the eurozone's third-biggest economy could become the next victim of the debt crisis.
Italy is now past the point that forced other eurozone countries to seek a bailout.
Greece, the Irish Republic and Portugal have all been bailed out.,,15516610,00.html

Italy bears watching.  Beast system is near.
I see the world rapidly going into the Revelation 13 beast system (antichrist) .. and all television as BeastTV
Beware BeastTV - All the sheepl are told is what the Beast wants us to know.

Berlusconi to resign after parliament OKs reforms

November   8,  2011  Tuesday   ROME (AP)
Silvio Berlusconi promised to resign after parliament passes economic reforms demanded by the European Union,
capping a two-decade political career that has ended with Italy on the brink of being swept into Europe's debt crisis.

Italian President Giorgio Napolitano met for about an hour with Berlusconi after the premier lost his parliamentary majority during a routine vote earlier Tuesday.
In a statement, Napolitano's office said Berlusconi had promised during the meeting to resign once the economic reforms have passed parliament.
A vote on the measures is planned for next week.


November  9,  2011   All world markets DOWN
Italy borrowing costs hit record 7%  

Italian government borrowing costs soar to new highs, with yields on 10-year bonds hitting 6.86%

Italy bonds in danger zone
Some reports Silvio Berlusconi will resign, Berlusconi denys them.
Berlusconi is the last surviving prime minister in the crisis-stricken eurozone.
Eurozone finance ministers met in Brussels Monday night to address Italian and Greek upheavals.

Italy is bust; it’s just a question of when – Italy has a lot of debt, and a lifeless economy
8 November 2011, by Matthew Lynn - London (MarketWatch)

When a man has survived as many corruption, financial and sex scandals as Silvio Berlusconi has over his two decades in Italian politics,
it would be a mistake to assume that a small matter like the imminent bankruptcy of his country will be anything other than a minor setback to his career

Zero Hedge November 8, 2011
Barclays Says Italy Is Finished: "Mathematically Beyond Point Of No Return"

BTPs Breach 87 Support, 86.955 Last, ECB Makes A Political Statement By Not Intervening

L'orrore, L'orrore... In Three Quick Charts

ECB ‘Inaction’ Succeeds In Doing What Nobody Has Achieved In Decades! Sending Risk Soaring

Zero Hedge November 9, 2011
Market Stalls As LCH Announces Margin Hikes On Italian Debt

Italy 10-year yield rises above critical 7% level
9 November 2011, by William L. Watts - Frankfurt (MarketWatch)

The yield on benchmark Italian 10-year government bonds moved above the critical 7% level widely viewed as unsustainable on Wednesday morning after clearing firm LCH.Clearnet raised margin requirements for trading Italian debt.

The yield IT:10YR_ITA -0.98% was seen at 7.09% in recent action, up 51 basis points from Tuesday, according to FactSet Research.
Sustained yields above the 7% level would translate into borrowing costs that would make it difficult for Italy to maintain funding needs, strategists say.

And Now France
9 November 2011
 French Bund spreads have just crossed 147 bps as the "cash bond long yet unable to hedge with CDS" crowd realizes that the Italian contagion is about to hit Paris.
And unable to hedge using creative modern financial instruments, said crowd has reverted to the good old fashioned version thereof.
We call it selling. Expect the spread to hit 150 bps momentarily.

“There Is No Solution for Europe”: Stocks Tumble as Italian Yields Surge

Dow Jones Industrial Average(DJI: ^DJI )
Index Value: 11,780.94
Trade Time: 4:04PM EST
Change: 389.24 (3.20%)
Prev Close: 12,170.18
Open: 12,166.40
Day's Range: 11,736.93 - 12,170.18
52wk Range: 10,362.30 - 12,928.50^DJI

Dow DOWN nearly 400 Nov. 9, 2011

They got to STOP market selloff  
November  10,  2011
Fears that the worlds third-largest debtor nation, Italy, cannot afford its obligations shook world markets, sending investors into the relative safety (?) of the U.S. dollar and Treasurys.  Italian bonds traded above 7% for the first time, a level unsustainable.

Italian PM Berlusconi said he would resign after the 2012 budget is approved, which sent risk markets rallying.
Greece was one thing, but if you let Italy go off the cliff, you question why you have a euro in the first place.

Asian stocks fall
November  10,  2011  Thursday
Asian shares fell over the eurozone debt crisis.
The falls in Asia followed losses in the US markets.

Italy's debt crisis: Why everyone is panicking

Nov. 10, 2011
Fears that Italy will not be able to pay its creditors raises fears of another global economic meltdown.
World financial markets erupted in turmoil this week, as fears mounted that Italy could default on its massive government debt. The crisis has already cost Italy's controversial prime minister, Silvio Berlusconi, his job. But why is it scaring people across Europe, and even here in the U.S.? Here, a brief guide:

Is Italy really in such bad shape?  YES.
The country has financed years of lavish social benefits by borrowing and borrowing, piling up $2.6 trillion in sovereign debt. That's 130 percent of the country's gross domestic product of $2 trillion — way beyond what economists say any country can manage for long.
As investors lose faith that Italy's leaders will ever get their finances in order, Italy is having to offer a higher and higher interest rate on its bonds just to borrow enough money to get by. On Wednesday, that rate spiked above 7 percent, the tipping point at which economists say a country's debt becomes unsustainable. Shortly after Greece, Portugal, and the Irish Republic hit that level, they had to be bailed out.

Why don't European leaders just rescue Italy, too?
It's too big to bail out. It's basically "Greece on steroids," says Kevin Drum at Mother Jones. Italy's economy is the eighth largest in the world, more than six times larger than Greece's. And Italy owes its creditors more than Greece, Ireland, Portugal, and Spain combined owe.
It would take nearly $1 trillion to rescue Italy, Capital Economics' John Higgins tells Forbes, but the European Financial Stability Facility — the EU's bailout fund — has as little as $340 billion left in it.

Can Italian leaders clean up their own act?
Maybe, but it might be too late. Berlusconi's final act was putting together an austerity plan that would slash the country's budget deficit from 3.6 percent of GDP to 2 percent, which is quite low. Take out the interest on its debt, and Italy already runs a surplus. But Italy has let its total debt grow so large that it will have to borrow 300 billion euros — "a massive 19 percent of GDP" — in private capital markets just to pay off bonds that mature in 2012.
"No one wants to lend to a country when that country would use the loan to pay the interest on previous loans," says Robert Peston at BBC News, "That's throwing good money after bad."

What happens if Italy defaults?
Many people fear that Italy's collapse could send borrowing costs spiralling higher across Europe, spreading the crisis to other big economies, such as France. To pay off its debts, Italy might even abandon the euro and pay its creditors with a new domestic currency, at a one-to-one exchange. "The currency would then 'float' (i.e., sink)," says The Economist, and the magnitude of its drop in value would determine how much Italy's default would cost the banks and other investors that lent it euros. The losses could cripple Europe's financial system and spark runs on banks in Italy, then in other debt-burdened countries. Businesses would go under.
The chaos could "send shockwaves around the world," says Michael Schumann at TIME, "that would rival, even possibly exceed, the ones we saw extend from Wall Street in 2008."

Italy Senate approves 2012 budget law: reports
11 November 2011  MarketWatch

Italy's Senate on Friday approved a budget law that includes new austerity measures, clearing the way for the parliament's lower chamber to pass the legislation on Saturday, news reports said.
The bill is widely expected to win final approval Saturday, clearing the way for embattled Prime Minister Silvio Berlusconi to resign, analysts said.

Financial markets have rebounded from a rout earlier in the week on expectations a technocratic government led by economist and former European Union commissioner Mario Monti will replace the outgoing government and will move to implement the austerity plan and measures aimed at freeing up the nation's labor markets and other aspects of the economy.

Italy vote clears way for Berlusconi resignation
The Italian parliament cleared the way for the resignation of Prime Minister Silvio Berlusconi with the approval of a budget law on Saturday, drawing a crowd of revelers to the streets of Rome celebrating his departure.
Once Berlusconi steps down, former European Commissioner Mario Monti is expected to be given the task of trying to form an administration to manage an escalating financial crisis.

Italy, the euro zone's third largest economy, came close to disaster this week when yields on 10-year bonds soared over 7.6 percent, the kind of level which forced Ireland, Portugal and Greece to seek an international bailout.

Berlusconi, who failed to secure a majority in a vote on Tuesday, promised to resign once parliament passed the package of economic reforms, demanded by European partners.
He is due to hand his resignation to President Giorgio Napolitano after a cabinet meeting that will mark the final act of the Berlusconi government and bring an end to one of the most scandal-plagued eras in Italy's post-war history.
Political sources said he was expected at the presidential palace at 2:30 p.m. EST.

Crowds of demonstrators waving banners mocking Berlusconi gathered outside the president's residence at the Quirinale Palace as the billionaire media entrepreneur who has been Italy's longest serving prime minister prepared to depart.

Demonstrators chanting "resign, resign, resign" and "clown, clowns, clowns" also gathered outside the prime minister's office and parliament, heckling ministers as they walked between the two buildings.
"Finally he is leaving. Finally it is over," Renato Cambursano, a deputy in the opposition Italy of Values said during the parliamentary debate that preceded the vote. "This country has lost all its international prestige and the fault is all yours!" he said.

Napolitano is expected to ask Monti to try to form an administration to tackle the financial crisis, threatening to escalate into an emergency across the whole euro zone.
Monti, named by Napolitano as a Senator for Life on Wednesday, is expected to appoint a relatively small cabinet of technocrat specialists to steer Italy through the crisis.

With the next election not due until 2013, a technocrat government could have about 18 months to pass painful economic reforms but will need to secure the backing of a majority in parliament and could fall before then.

With a public debt of more than 120 percent of gross domestic product and more than a decade of anemic economic growth behind it, Italy is at the heart of the euro zone debt crisis and would be too big for the bloc to bail out.

Financial markets have backed a Monti government and as prospects of Berlusconi going became firmer last week, yields dropped below the critical 7 percent level, although they remain close.
"We don't yet have a new government in Italy and we have to wait, but I'm sure if Mario Monti will be appointed he will do whatever is necessary in order to restore the confidence of the financial markets in Italy," Alessandro Profumo, former head of Unicredit, Italy's largest bank, told Reuters.

Berlusconi, fighting an array of scandals and facing trials on charges ranging from tax fraud to paying for sex with an under-aged prostitute, had been under pressure to resign for weeks as the market crisis threatened to spin out of control.
International leaders including President Barack Obama, French President Nicolas Sarkozy and the head of the International Monetary Fund Christine Lagarde have expressed hopes a new government can be in place quickly.

Talks with Italian political parties are expected to begin on Sunday with hopes that a new government can be in place in time for the opening of financial markets on Monday.
However, even as preparations for a transition begin, signs of opposition have appeared, with Berlusconi's PDL party split between factions ready to accept a Monti government and others deeply opposed.

Berlusconi had a working lunch with Monti before the vote, suggesting the outgoing government will not try to block a quick handover, but the attitude of the center-right as a whole remains unclear.
The PDL's main coalition ally, the regional pro-devolution Northern League, has declared it will go into opposition, underlining the risk that the new government will lack the broad parliamentary support it will need to pass deep reforms.

"The convulsions in the center-right at the prospect of a government led by Mario Monti signal a danger: that a divided coalition may be tempted to unload its divisions on the country," the daily Corriere della Sera said.
The center-left Democratic party and smaller centrist parties have pledged support to Monti. Italy's main business and banking associations and some of the moderate trade unions have also called for a government of national unity.

However, the support of the left will be tested if the new government tries to implement the kind of tough reforms to pensions and job protection measures that have drawn strong opposition from unions in the past.
In another warning of the kind of personal attacks he may soon face, the fiercely pro-Berlusconi Il Giornale daily declared Monti had joined "the caste," the tag given to Italy's deeply unpopular political elite.
"SuperMario joins the caste: 25,000 euros a month," it said in a front page article that referred to the salary Monti will receive following his appointment as senator for life by Napolitano this week.

           Mario Monti

The New Italy     13 November 2011  Sunday
Italy hopes the new government will be named before world financial markets re-open Monday.
Ex-EU commissioner Mario Monti remains favourite to take the top job.
The new prime minister will be responsible for implementing austerity measures aimed at tackling Italy debt crisis.

New Eurozone govt forsees collapse of euro


Wow...they are slowly kicking out national leaders little by little...Greece, and now Italy(surprised they waited until NOW to kick out Burlusconi)...things are going to get ugly pretty soon...but look up, as our redemption draweth nigh...THANK YOU JESUS!

The New Italy  
Mario Monti moves in

November  14,  2011  Monday
Mario Monti starts work with urgency to form a new government to lead Italy out of its debt crisis.
The first test of his appointment will come with the opening of European financial markets on Monday.
Asian stocks have already risen in early trading.
Another test will come when Italian government bonds are auctioned.

Europe's real problem: Lack of growth

November  14,  2011  Monday
The mood in Germany is pretty grim.  Europe is facing its most severe challenge since 1945.  The entire structure of Europe could unravel.
European leaders will not address Europe's core problem, a lack of growth.
Germans are trying to find some solution to this crisis that will not let countries like Greece and Italy off the hook.

The real problem Greece budget numbers look bleak is because its growth forecast looks bleak.
What can the Greek economy do to attract capital and investment?  And at what wage levels?

Italy economy has not grown for 10 years.
German growth in only 1.5%.


Monti due to present new Italian government

November  15,  2011   ROME
Prime Minister designate Mario Monti is expected to unveil Italy's new government on Wednesday after an intense two days of consultations aimed at staving off a major financial crisis that has pushed Italy's borrowing costs to untenable levels.

The presidential palace said Monti would meet President Giorgio Napolitano at 11 a.m. (10 GMT) to tell him formally that a government could be formed.
Monti told reporters Tuesday night the "framework is now clearly delineated" for his government but declined to give details, saying he would work them out "in the next few hours" and brief the president Wednesday before announcing them.

Italian media said he would go to the meeting with Napolitano with his cabinet list ready. It was not clear when the government would be sworn in.
The government, expected to be made up of technocrats, will have to tackle a crisis that has brought Italy to the brink of economic disaster and endangered the entire euro zone.

"I would like to confirm my absolute serenity and conviction in the capacity of our country to overcome this difficult phase," Monti said.
Before the end of the week, the new government is expected to outline its program and seek confidence votes from parliament, which will formally invest it with power.

Monti, who won the backing of all political forces except the Northern League, must push through a tough austerity program demanded by European leaders to restore shattered confidence in Italy and take market pressure off the country.

Yields on Italy's 10-year BTP bonds climbed to over 7 percent Tuesday, the level at which Greece and Ireland were forced into bailouts.
Italy is too big to be bailed out with the resources currently available.

Emma Marcegaglia, head of the employers association Confindustria, told reporters after meeting Monti: "We said we will support his government very strongly. We think this government is the last chance for Italy to exit from this situation of emergency."

Crucial to Monti's success was the backing of the PDL party of outgoing prime minister Silvio Berlusconi, who was forced to step down Saturday by the fast-worsening crisis.
Napolitano, who has engineered the extremely rapid government transition in response to the collapse of confidence in Italy, nominated Monti for the premiership Sunday night.

The president has called for an extraordinary national effort to win back the confidence of markets, noting that Italy has to refinance some 200 billion euros ($273 billion) of bonds by the end of April.
Monti said his government should last until the next scheduled elections in 2013, despite widespread predictions that politicians intend to give him only enough time to implement reforms before precipitating early polls.

Monti Forms New Italian Government

November  16,  2011  ROME
Mario Monti, Italy’s prime minister-designate, unveiled his cabinet on Wednesday and named himself as finance minister, underscoring the urgency to repair the country’s teetering economy at a moment of Europe-wide economic instability.

Monti said he hoped the new government could restore market confidence and soothe a tense political climate. “We worked seriously and paid close attention to the quality of the choices,” he said at a news conference. He added that he had been encouraged by Italy’s European partners and the international community and that the rapid formation of the government would relieve the pressure of markets on Italy.

The ministers are drawn mostly from Italy’s academic world, some with strong ties to the Catholic Church, but also banking and the upper echelons of civil service.

Italy yield edges up, Spain down; ECB seen buying
18 November 2011  MarketWatch

Italy's 10-year government bond yield erased an earlier decline, while Spain's yield remained lower Friday morning.
Strategists had reported a further round of purchases by the European Central Bank.

Yields fall as bond prices rise.
The yield on 10-year Italian government bonds edged up 1 basis point to 6.72%, while Spain's 10-year yield fell 9 basis points to 6.35%, according to FactSet Research.
The extra yield demanded by investors to hold Italian 10-year bonds over German bunds rose slightly to 4.8 percentage points, while the spread between Spanish and German 10-year yields narrowed by around 10 basis points to 4.46 percentage points.

France's 10-year yield fell by around 10 basis points to 3.53%, narrowing the spread over the German 10-year yield to 1.65 percentage points after hitting a euro-era record at 2 percentage points earlier this week.
A basis point is one-hundredth of a percentage point.

Is 16-Times-The-Charm For ECB BTP Interventions?
18 November 2011  Zero Hedge

While the disquieting calm (before the storm) of the last hour in European markets suggests traders sitting on their hands into a bazooka-ridden weekend, we thought a look at what happens when the ECB stops playing may help.
Based on the velocity of price-jump, the last two weeks have seen at least 16 interventions by the ECB into the BTP market and still the price is down significantly.
Most importantly, on the two occasions when the ECB has deemed to let free markets reign, we have seen BTP prices free-fall.
Have a great weekend, Europe.

New Italian government does not include a single elected politician


Mario Monti, Italy's new prime minister, appointed a government without a single politician on Wednesday, forming a technical administration which faces the daunting challenge of preventing the country from being dragged deeper into the euro zone debt crisis.

The emergency administration, which is meant to govern Italy until elections are due in 2013, is made up of bankers, lawyers and university professors but not a single elected official – an extraordinary development for a Western democracy.

But it is a deal that much of the electorate and nearly all the mainstream parties have signed up to, in order to save Italy from the economic abyss by trimming the country's bloated bureaucracy, slashing its 1.9 trillion euro debt and unleashing its economic potential after years of stagnation.

Almost none of the new appointees was familiar to the average man or woman in the street – a fact that some Italians hailed as the new administration's chief strength, saying it was above party politics and untainted by any links to the discredited centre-Right government of Silvio Berlusconi or the weak and divided centre-Left opposition. Italy has a track record of appointing 'technical' governments during periods of political paralysis and party deadlock.


They have complained vociferously that he was forced to stand down not by a democratic process but by a "coup d'etat" engineered by Brussels, bankers and the financial markets.

Mr Berlusconi has said that he was not constitutionally obliged to resign, because the vote he lost in parliament last week was not a confidence vote, and that his decision to step down was an act of self-sacrifice and "responsibility".

Read More

Israel - Italy agreement  

November  21,  2011  Monday
Very interesting to see Israel joining up with nations Europe wants to cut out of the EU.
Nov 3 Israel signed an agreement with Italy regarding the construction of a gas line in order to prevent a shortage of natural gas amid threats from Turkey and Lebanon.
A gas terminal will be built near Hadera by an Italian contractor.  
Egypt, Israel's main supplier of oil and gas. can no longer be trusted.
Israel has also signed agreement with Cyprus to share the gas fields and send some of it to Europe as an export.


Goldman Sachs Conquers Europe
November 21st, 2011

The ascension of Mario Monti to the Italian prime ministership is remarkable for more reasons than it is possible to count. By replacing the scandal-surfing Silvio Berlusconi, Italy has dislodged the undislodgeable. By imposing rule by unelected technocrats, it has suspended the normal rules of democracy, and maybe democracy itself. And by putting a senior adviser at Goldman Sachs in charge of a Western nation, it has taken to new heights the political power of an investment bank that you might have thought was prohibitively politically toxic.

This is the most remarkable thing of all: a giant leap forward for, or perhaps even the successful culmination of, the Goldman Sachs Project.

It is not just Mr Monti. The European Central Bank, another crucial player in the sovereign debt drama, is under ex-Goldman management, and the investment bank’s alumni hold sway in the corridors of power in almost every European nation, as they have done in the US throughout the financial crisis. Until Wednesday, the International Monetary Fund’s European division was also run by a Goldman man, Antonio Borges, who just resigned for personal reasons.

Even before the upheaval in Italy, there was no sign of Goldman Sachs living down its nickname as “the Vampire Squid”, and now that its tentacles reach to the top of the eurozone, sceptical voices are raising questions over its influence. The political decisions taken in the coming weeks will determine if the eurozone can and will pay its debts – and Goldman’s interests are intricately tied up with the answer to that question.

CATASTASTROPHE! * Oil 'accident' in the Gulf of Mexico
What part did Goldman Sachs play?

23 pages


Italy forced to pay record interest rates in auction of treasury bills

Global Economic Collapse, nation by nation


Italy sells 6-month bills as yield soars: reports
25 November 2011, by William L. Watts - Frankfurt (MarketWatch)

Italy sold 8 billion euros ($10.7 billion) of six-month bills, but saw the yield soar to a euro-era high, news reports said Friday.

The auction produced a yield of 6.504%, up from around 3.52% in October, according to Bloomberg.

Demand weakened, with the total bids exceeding supply 1.47 times, down from a bid-to-cover ratio of 1.57 in October, the report said.

The government also sold 2 billion euros of two-year debt at a yield of 7.81%, reports said.

Uncle Sam To The Rescue After All
Latest Rumor Sees €600 Billion Bailout Of Italy From USA, IMF

The European desperation is palpable ahead of the EURUSD open in a few hours, which has to deal with the aftermath of the Friday afternoon downgrade of Belgium, the junking of Portugal and Hungary, and the prospect of an imminent downgrade of AAA-stalwarts Austria and France. So what does Europe do instead of actually proposing the inevitable debt repudiation that is the only and final outcome? Why more rumors of course. To wit: last night saw the preannouncement of Welt am Sonntag indicating that in order to bypass the lengthy process of treaty changes, Europe would instead proceed with bilateral agreements that would somehow enforce fiscal stability and convince the market that European states would follow the German leader. Well since that is sure to have absolutely no impact, overnight Italian La Stampa is out with a fresh new rumor which cites "IMF sources" according to which the US-headquartered and funded organization would provide a €600 billion loan to Italy at 4-5%. In other words, Uncle Sam, in his role as primary funding agent of the IMF would lose massive amount of money on the "market to fair value" arbitrage, only to bail out the latest European domino. As a reminder, the whole "under market rates" loan from the IMF was implemented in Greece and worked out just swell: at last check the 1 Year Greek bond was trading with a yield of over 300%. Oh, and La Stampa forgot to mention one thing: any changes to the IMF, which currently is massively underfunded and is why the organization was forced to create two new liquidity facilities: a Precautionary and Liquidity Credit line, since it is unable to fund its New Arrangements to Borrow, have to go through US Congress when it comes to expanding funding capacity. Yup, the most dysfunctional, corrupt and criminal thing in the world - the US House of Representatives, where unless everyone is short Italian CDS, this will never pass. In other words: this rumor is dead in the water.

Italy Is Closer To Collapse Than Anyone Realized,
And So Is The World

Some stories in European press suggest that Italy is working on a very big loan package from the IMF.
I have no doubt that there are ongoing discussions. There has to be. Either someone puts a finger in the dike or Italy goes tapioca.

That thought is difficult for me to fathom. How could we be so close to the brink? At this point there is zero possibility that Italy can refinance any portion of its $300b of 2012 maturing debt. If there is anyone at the table who still still thinks that Italy can pull off a miracle, they are wrong. I’m certain that the finance guys at the ECB and Italian CB understand this. I repeat, there is a zero chance for a market solution for Italy. Either the ECB (aka Germany) steps in and underwrites the debt with some form of Euro bonds or the IMF (aka the USA) steps in with some very serious money.

I have acknowledged in recent articles that I misread the Italian story. I didn't see this coming at the pace that it has. Italian bond yields more than doubled in a month. I was not alone in this very big misread. I believe it has caught everyone flatfooted. Central bankers and finance officials all over the globe are crapping in their pants.

Italy's Monti seeks broad support for crisis measures


ROME (Reuters) - Italian Prime Minister Mario Monti met party leaders on Saturday to drum up support for new measures aimed at shoring up public finances, helping growth and calming the debt crisis in the euro zone's third largest economy.

Italy's cabinet is set to approve the package of reforms on Monday, a step seen as vital for re-establishing Italy's shattered credibility with financial markets after a series of unfulfilled promises by the previous government.

The plan will then be outlined during two news conferences - one with foreign reporters - and presented in both houses of parliament in the afternoon.

Government sources familiar with the plan say the mix of cuts and tax rises will total about 20-25 billion euros over the next two years, about half of which will be used to reduce the budget deficit and help balance the budget by 2013 despite the economic downturn and rising borrowing costs.

The rest will free up resources to try to regenerate Italy's recession-bound economy.

read more

Italy crisis: Mario Monti announces austerity plan

12/4/11  Italy's new government has adopted a package of emergency austerity measures aimed at fending off bankruptcy and saving the euro from collapse.
Taxes on the assets of the wealthy will go up, as will pension ages. There will be a major drive to tackle tax evasion.

Prime Minister Mario Monti said the measures were necessary to "save Italy", and announced he would give up his own salary as part of the effort.
The plans must still be approved by the Italian parliament.
Monti will outline the measures in full to lawmakers on Monday, but a few elements have already been announced.

Pension ages will rise to 62 for women and 66 for men, and most payments will be unlinked from inflation. The pension age for women will rise to 66 from 2018.
The minister in charge of pension reform broke down and cried as she tried to spell out the detail of the changes, says the BBC's Alan Johnston in Rome.

In all, the austerity package is estimated to represent 20bn euros (£17bn; $26.8bn) of savings from now until 2014.
The measures were agreed at a cabinet meeting held 24 hours ahead of schedule because of the growing pressure on Italy's finances.

Monti warns of Greek-style risk to Italy

12/5/11   ROME (Reuters) - Italy risked a Greek-style economic collapse which could threaten the future of the euro
without the austerity package approved by the government, Prime Minister Mario Monti said on Monday, calling on European partners to do their part.

Monti's announcement of the plan on Sunday kicked off one of the most crucial weeks since the launch of the euro more than a decade ago, ending with a summit of European leaders in Brussels on Thursday and Friday to seek a wider set of crisis measures.

"If Italy were not capable of reversing the negative spiral of growth in debt and restoring confidence to international markets, there would be dramatic consequences, which could go as far as putting the survival of the common currency at risk," Monti told parliament.
"Italy is ready to do what it has to do but Europe must not fail to do its part," he said.

The package, dubbed a "Save Italy" decree by Monti, aims to raise more than 10 billion euros ($13.4 billion) from a property tax, impose a new levy on luxury items like yachts, raise value added tax, crack down on tax evasion and increase the pension age.

The following are several pages, scan them all

Financial Collapse and War
Maurice Sklar prophecy

Global Economic Collapse, nation by nation

Germany Gets The Debt Blues As Euro Bonds Loom

Eurozone government, Euro-Collapse


Italy leads bond yields higher after S&P warning
6 December 2011   MarketWatch
European government bonds fell, sending yields higher Tuesday, a day after Standard & Poor's Ratings Services put the credit ratings of 15 euro-zone countries on negative watch.
The move encompassed all euro members other than Cyprus, which was already on negative watch, and Greece, whose CC rating already signals a high risk of default.

The 10-year yield on Italian government bonds, which had fallen sharply on Monday, rose 20 basis points to 6.05%.
Spain saw its 10-year yield rise 4 basis points to 5.17%,
while France's 10-year yield rose 6 basis points to 3.19%.
Germany saw its 10-year yield rise 2 basis points to 2.23%

Monti sees little room to amend Italy austerity plan
Italian Prime Minister Mario Monti moved on Tuesday to head off any attempts by political parties to water down his 30 billion euro austerity package with amendments in parliament, saying Italy had little time at its disposal to approve the plan.

Speaking in a prime time television interview, Monti brushed off calls from lawmakers among the parties he depends on for a majority to amend measures such as a housing tax, raising the retirement age or suspending inflation indexation of pensions.

"There is little time and the margins of flexibility are minimal," he said when asked about the possibility of amending his proposals for pension reform.
Welfare Minister Elsa Fornero, speaking on another television talk-show, said she was willing to re-consider the de-indexation of pensions if parliament could come up with another way of finding the necessary savings.

The austerity plan, approved by the cabinet on Sunday, is immediately effective but must be passed by parliament within 60 days or it expires. It is expected to be approved before the end of the year.

Italy's Monti faces confidence vote on austerity
Dec. 15, 2011    ROME (Reuters) -
Italy's government faces a confidence vote in parliament on Friday, a move to speed up approval of a 33-billion euro ($43 billion) austerity package intended to restore market confidence in the euro zone's third largest economy.
Mario Monti's government of unelected technocrats has an overwhelming majority in both houses of parliament and the vote, to be held in the Chamber of Deputies in the afternoon, should pass easily.

The austerity plan will then move to the Senate, where a similar vote is expected to be held before Christmas, marking the final passage of a decree law that went into effect on December 4 but needed parliamentary approval within 60 days.

Monti's government was appointed last month to face a collapse in market confidence that put Italy at the heart of the euro zone debt crisis. He has raced to push through the package of tax hikes, spending cuts and pension reform aimed at meeting Italy's goal of balancing its budget in 2013.

Fitch says it may cut 7 Italian banks
20 December 2011  MarketWatch

Fitch Ratings said Tuesday it placed seven Italian banking groups' long-term issuer default ratings and viability ratings on rating watch negative.
The move follows the rating agency's decision on December 16 to put Italy's sovereign rating on rating watch negative.

Fitch said it put the banks on watch because it believes pressure on their earnings, funding, liquidity, asset quality and capitalization was likely to increase in Europe's tough operating environment.
The banks affected are Banca Monte dei Paschi di Siena, Banca Popolare di Sondrio, Banco di Desio e della Brianza, Banco Popolare, Iccrea Holding, Intesa Sanpaolo and Unione de Banche Italiane - UBI Banca.

Italy's quarterly GDP declines more than forecast
21 December 2011  MarketWatch

Italy's gross-domestic-product estimate for the third quarter showed that the economy contracted at a faster rate than expected, according to media reports. GDP in the southern European nation declined 0.2% on a quarter-over-quarter basis.
A Reuters consensus expected a 0.1% decline.
The average growth across the 17-nation euro zone is 0.2%.

Italy's Senate approves emergency austerity plan
23 December 2011, by Barbara Kollmeyer - Madrid (MarketWatch)

Italy's Prime Minister Mario Monti secured approval for his €30 billion ($39 billion) emergency austerity package, media reports said.

The package won a final confidence vote in the Senate after a lengthy debate Thursday evening.

Italy's two main parties, the center-right People of Freedom and the center-left Democratic Party, have opposed the plan, but backed it in the end "for a sense of responsibility."

Monti had called a confidence vote in both parliament chambers to try and speed up the package. The lower house of parliament passed the package last Friday.

Italian 10-year yield rises back above 7%
6 January 2012, by William L. Watts - Frankfurt (MarketWatch)
Italian and Spanish government bonds were under pressure Friday, pushing up yields as both countries prepared to auction debt next week in a key test of market confidence.
The yield on 10-year Italian government bonds rose back above the 7% level to trade at 7.11%, a rise of 16 basis points.
Borrowing costs above 7% are widely seen as unsustainable over the long run.
Spain's 10-year bond yield rose by around 5 basis points to 5.63%.

Italy plans gradual liberalisation to boost economy
8 January 2012, Catherine Hornby - Rome (Reuters)
Italian Prime Minister Mario Monti plans liberalisation steps to promote competition in several industry sectors and revive the ailing economy, he said on Sunday, ahead of meetings with European partners to discuss ways to stem the debt crisis.
The liberalizations, which will seek to reduce privileges for dominant companies, will be included in a new set of growth-enhancing reforms due to follow the €33 billion austerity plan passed last month.

ECB Resumes Buying Bonds With Gusto As Italian Yields Remain Well Wide Of 7%
9 January 2012, by Tyler Durden (Zero Hedge)

Italian Bonds Surge To Early November Wides
9 January 2012, by Tyler Durden (Zero Hedge)

Italian Banks Plunge On Capital Raise Concerns
9 January 2012, by Tyler Durden (Zero Hedge)

Monti warns of anti-EU unrest in Italy
Italian Prime Minister Mario Monti has warned that his austerity measures might trigger anti-European protests in his country, pleading for more help from the EU to stem its debt crisis.

“I am demanding heavy sacrifices from Italians,” Monti said in an interview with German newspaper Die Welt published on Wednesday.
“I can only do this if concrete advantages become visible.” If not, “a protest against Europe will develop in Italy, including against Germany, which is seen as the ringleader of EU intolerance, and against the European Central Bank,” Monti added.

Monti, who has pushed through a crushing austerity plan demanded by the European Union, is in Berlin for talks with German Chancellor Angela Merkel on stemming the debt crisis. The two leaders are due to hold a news conference later today.
"Unfortunately, we have to say that our reform policies have not received the recognition and appreciation in Europe that they deserve," the premier added.

Bank of Italy forecasts sharper recession in 2012
17 January 2012, (AFP)

The Bank of Italy forecast Tuesday an economic contraction of between 1.2% and 1.5% this year depending on borrowing costs, a much sharper decline than the government's estimate of 0.4%.

"The uncertainty that surrounds the medium-term perspectives of the Italian economy ... are extraordinarily high and are directly linked to the evolution of the eurozone debt crisis," the central bank said in its economic bulletin.

The bank advanced two scenarios, each based on interest Italy must offer to borrow on sovereign bond markets.

The first scenario was calculated with a rate of about 7.0% currently demanded by investors for 10-year Italian debt and widely considered to be unsustainable.

Under these circumstances, the bank said, the Italian economy would contract by 1.5% in 2012 and would remain stalled in 2013.

Italy wants EU bailout fund doubled - German magazine
21 January 2012, Berlin (Reuters)

Italian Prime Minister Mario Monti wants the lending capacity of the euro zone's permanent rescue fund to be doubled to €1 trillion ($1.29 trillion), German magazine Der Spiegel wrote on Saturday, without citing sources.

"Monti argues that such a measure would create confidence in the currency union," Spiegel wrote.

"He has informed the German government of his wishes."

Spiegel said Monti's fellow countryman and European Central Bank President Mario Draghi agreed the European Stability Mechanism (ESM) should beef up its effective lending capacity beyond the €500 billion planned.

He believes the leftover funds from the European Financial Stability Facility (EFSF), the temporary €440 billion fund lending to Ireland and Portugal, should be put at the ESM's disposal in addition to the €500 billion, Spiegel wrote.

The draft treaty establishing the ESM will be discussed by euro zone finance ministers on Monday and is likely to be approved by EU leaders at a summit on January 30, euro zone officials said last week.

S&P Downgrades 34 Of 37 Italian Banks - Full Statement
10 February 2012, Tyler Durden (Zero Hedge)

A&G's AIG Moment Approaching: Moody's Downgrades Generali, Cuts Megainsurer Allianz Outlook To Negative
15 February 2012, by Tyler Durden (Zero Hedge)

For a while now we have said that the very weakest link in Europe is not the banks, not the ECB, not triggered CDS, and not even the shadow banking system (well, infinitely rehypothecated Greek bonds within a daisychain of broker-dealers, which ultimately ends up at the ECB at a negligible repo discount, that could well be the weakest link - we will have more to say about this over the weekend) but two very specific insurers:

Italy's mega insurer Assecurazioni Generali, which at last check had more Greek bonds as a % of TSF than anyone else, and Europe's biggest insurer and Pimco parent, Allianz, which is filled to the gills with pretty much everything (for more on Generali, or as we like to call it by its CDS ticker ASSGEN read here, here, here, and here).

Well, Moody's just gave them, and the entire European space, the evil eye, and soon the layering of margin calls upon margin calls, especially if and when Greece defaults and a third of ASSGEN's balance sheet is found to be insolvent, will make anyone who still is long CDS those two names rich.

Assuming of course the Fed steps in and bails out the counterparty the CDS was purchased from.

Cash-strapped Italy sells off iconic lighthouses
The Italian island of Sardinia is leasing several formerly state-owned, out-of-use lighthouses to private developers who plan to capitalize on their pristine coastal surroundings.

They command stunning coastal views of one of the Mediterranean’s least spoiled islands, but now, as Italy’s new government attempts to chip away at the country’s €1.9 trillion ($2.5 trillion) debt, a clutch of abandoned but picturesque lighthouses on the island of Sardinia will be sold off.

The sale is part of the Italian government's efforts to balance the books by capitalizing on a valuable portfolio of state-owned property, from disused Army barracks to castles, former convents, and even islands. The lighthouses, which overlook the powder-white beaches and turquoise bays that have made Sardinia such a tourist magnet, are to be leased to private businesses and converted into unusual hotels, galleries, and museums.

They are being offered for sale by the island’s autonomous government. Squeezed by the drastic cuts announced by Prime Minister Mario Monti, the sober technocrat appointed in November, the island's government can no longer afford the cost of maintaining the lighthouses, much less restoring them.

Yields on Italian, Spanish debt rise
6 March 2012, by Deborah Levine - New York (MarketWatch)
Spain and Italy's cost of borrowing rose on Tuesday after a report said a Greek default would likely force Italy and Spain to seek aid.
However, the move took yields back to levels about a week ago, at worst - just before the European Central Bank's latest mammoth lending operation.

Spain's 10-year yields rose as high as 5.05% from 4.95% on Monday.
They topped 5.60% at the beginning of the year.
Italy's 10-year yields increased 10 basis points, or 0.1%, to 4.97%, though still near their lowest levels since last fall.
Italy's 2-year yields increased 3 basis points to 1.80% and Spain's were up 5 basis points to 2.31% -- both still down significantly from a week ago.

Italy politics in tumult after Northern League head, Berlusconi ally quits in finance scandal
Apr 6, 2012  The once-charismatic head of the Northern League, the anti-immigrant party that for two decades was Silvio Berlusconi's critical ally, has called for his party to do the right thing amid a finance scandal that forced his resignation.

A chastened Umberto Bossi said Friday the League was in a "dangerous" situation, under the spotlight by Rome prosecutors investigating alleged party payments to his family members and under criticism by deceived party faithful.
Bossi was meeting Friday with Roberto Maroni, Berlusconi's onetime interior minister and one of three League officials who have been tapped to guide the party following Bossi's abrupt resignation Thursday.
Bossi blamed "thieving" Rome prosecutors for stirring the scandal, but acknowledged the need for clarity.

Analysis: Fat cat Italian politicians dodge Monti's austerity


ROME (Reuters) - When Prime Minister Mario Monti called on all Italians to make sacrifices to avert a Greek-style crisis, the political class that backs him in parliament wasn't listening.

While most voters face higher taxes, stagnating wages and rising unemployment, Italy's army of politicians and senior officials are clinging to fat salaries that far outstrip those of their peers abroad.

Monti, a technocrat who relies on party politicians to get his austerity policies through parliament, recently issued a decree which will prevent public servants earning more than U.S. President Barack Obama. Many now earn considerably more.

Ordinary Italians are paying the price for a decade of political stalemate, profligate spending and corruption.


Italy to delay balanced budget by a year: report
18 April 2012, by William L. Watts - Frankfurt (MarketWatch)

The Italian government will delay its plan to reach a balanced budget in 2013 by a year due to a weaker economic outlook, Reuters reported Wednesday, citing a draft document expected to be approved by Prime Minister Mario Monti's cabinet later in the day.

The plan raises Italy's 2012 deficit target to 1.7% of GDP from 1.6%, the report said, while the 2013 goal is raised to 0.5% from 0.1%.

The plan calls for a nearly balanced budget, with a deficit of 0.1% of GDP, in 2014.

Italy has one of the smallest deficits in the euro zone but is struggling to convince investors it can rein in the size of its overall debt pile, which at around 120% of GDP is second only to Greece in the euro zone.

French Bonds Drop Before Election as Italian Debt Slides
21 April 2012, by Anchalee Worrachate (Bloomberg)

French bonds declined, sending 10- year yields to the highest in almost three months, as investors braced for tomorrow’s election amid concern that European policy makers are failing to contain the region’s debt crisis.

Italian 10-year bond yields rose for a sixth week, the longest run since November, as Prime Minister Mario Monti pushed back his balanced-budget goal.

France will hold the first of two rounds of votes to choose a president, with Socialist Francois Hollande seeking to replace Nicolas Sarkozy.

The rise in France’s yields reflects investor concern that Hollande may relax the nation’s deficit-tackling policy if he takes office, according to Charles Diebel, head of market strategy at Lloyds Banking Group Plc.

“The French election is going to keep people nervous, particularly with comments Hollande is making,” London-based Diebel said.

“With a number of risk events ahead of us, the market is going to re-challenge policy makers.”

French 10-year yields advanced 13 basis points, or 0.13 percentage point, from last week to 3.08% at 4:06 p.m. London time yesterday.

That’s the biggest increase since the five days ended Jan. 6.

The extra yield investors get for holding the securities instead of German bunds rose to as much as 149 basis points, the most since January.

The price of the 3% securities due in April 2022 fell to 99.33 from 100.43.

Italian 10-year bond yields rose 13 basis points to 5.65%.

The rate on benchmark 10-year German bunds slipped two basis points to 1.72%.


Italy borrowing costs rise as eurozone woes grow


=ROME (AP) — Italy has seen its borrowing costs rise as it raised some €2.5 billion ($3.3 billion) in bonds in a market jittery over the French elections and political instability in the Netherlands.

Italy had to pay an interest rate of 3.3 percent in the auction of two-year bonds on Tuesday, up from 2.3 percent at the last such auction, but below the 4.8 percent paid as recently as January.

Analysts had expected borrowing costs would reflect political developments in the wider eurozone as well as Italy's decision to delay its target for a balanced budget from 2013 to 2015.

Rising Italy-to-Spain Yields Keep Banks on Life Support
25 April 2012, by Liam Vaughan and Gavin Finch (Bloomberg)


European lenders, more reliant than ever on emergency aid after borrowing $1.3 trillion from their central bank, may need additional cash infusions until policy makers stem the crisis engulfing Spain and Italy.

After more than 30 bond sales in the first quarter, no bank has sold unsecured debt this month, and the cost of insuring against default has soared to levels last seen in January.

Financial stocks, which rallied 20% following the European Central Bank’s December decision to provide unlimited three-year loans, are now 2% lower since then.

Investors are balking after some lenders used the ECB cash to boost holdings of sovereign debt and governments struggled to rein in deficits.

Because banks post collateral in exchange for the ECB loans, the amount unsecured bondholders would get back in a default has shrunk.

That has raised funding costs for what Morgan Stanley estimates is about €700 billion ($924 billion) of debt lenders must refinance by the end of 2013.

“There is a very compelling case for further intervention from the ECB,” said Barbara Ridpath, chief executive officer of the International Centre for Financial Regulation, a London- based research group funded by banks and the U.K. government.

“Many of these banks simply cannot refinance their maturing debt in the bond market.”

Italian Business Confidence Drops to Lowest in Two Years
26 April 2012, by Lorenzo Totaro and Chiara Vasarri (Bloomberg)


Italian business confidence unexpectedly fell to the lowest level in more than two years in April amid concerns that the country’s fourth recession in a decade may deepen.

The manufacturing-sentiment index dropped to 89.5 from a revised 91.1 in March, Rome-based national statistics institute Istat said today. Economists had predicted a reading of 92.1, according to the median of 11 estimates in a Bloomberg News survey.

“It is premature to say whether today’s decline in business sentiment might be a temporary blip or a signal of a more protracted phase of very weak economic activity,” Unicredit economists Chiara Corsa and Loredana Federico wrote in a note today.

“Still, taken at face value the April figure is consistent with a GDP contraction at the beginning of the second quarter.”

Prime Minister Mario Monti’s Cabinet, which is implementing a €20 billion ($26.4 billion) austerity plan to eliminate the deficit, lowered its forecasts for the euro-region’s third- biggest economy on April 18, saying it will contract 1.2% this year.

The Treasury also forecast that unemployment, at an 11-year high of 9.3%, won’t start declining until 2013

Italy Unemployment Rises to 12-Year High as Slump Worsens
2 May 2012, by Lorenzo Totaro (Bloomberg)

Italy’s unemployment rate rose more than economists forecast in March to the highest since 2000 as companies failed to hire amid signs of a deepening recession in the euro region’s third-largest economy.

Joblessness increased to a seasonally-adjusted 9.8% from a revised 9.6% in February, Rome-based national statistics office Istat said in a preliminary report today.

The reading, the highest since the third quarter of 2000, compared with a 9.4% median estimate by nine economists surveyed by Bloomberg News.

After slipping into its fourth recession since 2001 in the final three months of last year, the Italian economy probably shrank again in the first quarter as rising joblessness undermined domestic demand, employers’ lobby Confindustria said on April 18.

Prime Minister Mario Monti’s Cabinet last month forecast the economy will contract 1.2% this year.

The Rome-based Treasury also predicted that unemployment won’t start declining until 2013.

“Unemployment will keep soaring sharply as the conditions that caused it will remain,” Confindustria said last month.

“There will be more job cuts and an increase in people looking for employment amid a decline in real income.”

The Italian parliament will debate this month an overhaul of the labor code that the government says will spur employment.

The plan gives employers more leeway to fire staff and creates a new system of unemployment benefits.

The initiative is Monti’s fourth major legislative effort to revamp the economy after measures in December aimed at reducing Italy’s deficit and two packages earlier this year to make the country more competitive and to simplify bureaucracy.

Istat originally reported a jobless rate of 9.3% in February.

European Spreadwatch Alert As Italian Bank Borrowings From ECB Rise To New Record
8 May 2012, by Tyler Durden (Zero Hedge)


It may not be a big rise, but the €1 billion increase in Italian bank borrowings from the ECB, from €270 billion to €271 billion in Apirl as just reported by the Bank of Italy, is still a record, and not one Italy should be proud of.

The Spanish bank update is pending and will be out in a few days, although if the recent about face by Rajoy, admitting the Spanish banks are about to be nationalized, which today is no longer sending the markets higher, is an indication, it won't be a vast improvement.

Sure enough, the fact that the market's attention is once again drawn to an indicator of the PIIGS financial sector insolvency is not good for sovereign spreads and at last check everyone was wider, core and periphery together, as

Spain was+5.3 bps,

Italy +3.8 bps,

Netherlands +0.3 bps, and

France 1.8 bps.

Even the futures are shocking not green on more bad news.

Italian Economic Deterioration Accelerates: Q2 GDP Forecast To Drop More Than 1%
10 May 2012, by Tyler Durden (Zero Hedge)

Overnight we got some good news on Italian industrial production.

Well, get ready to scrap them as according to Italian Trade Union Confindustria, and validating the collapse as predicted by PMI indicators,

Italy's Q2 GDP is now expected to shrink more than 1% in Q2: the worst print since 2009, cementing the country's "double dip", and that real-time industrial output in April, now that LTRO has fizzled, is expected to fall 0.6%.

None of this should come as a surprise to anyone: after all the only way the periphery can rise is if it crashes hard enough to force the ECB to intervene again.

Finally, the country that is next in line after Spain to nationalize its banks, need some pretext after all.

Complete economic collapse will surely make stockholders, of other countries' banks at least, happy, as their Italian counterparty risk will soon be footed by the Italian taxpayers themselves.

This is what Italian GDP has been recently. A -1.0%+ print will not make anyone happy

Tax Collection Violence in Italy: Mail Bombs in Rome, Police Clashes in Naples, Molotov Cocktails in Livorno

Violent protests against the hated Equitalia, the Italian tax collection agency, are making headlines in several cities in the past few days. In Rome mail bombings have been ongoing since December. Via Google Translate, this time in Italian, please consider a trio of articles.

Equitalia, six months of mail bombs
MILAN - Equitalia once again in the crosshairs. After the envelope with gunpowder delivered Friday to the see of Rome, in Via Giuseppe Grezar, last night, two Molotov cocktails were thrown against the door of the agency's headquarters in Livorno. This is the latest in a long series of parcel bombs and suspicious envelopes arrived in recent months in various offices of the Italian society of recovery.

THE FIRST PACKS-BOMB - The first package bomb delivered to Equitalia comes in via Millevoi, in Rome, December 9 last year. The bomb explodes in the hands of the director general, Mark Cockaigne, that is wounded in the hand and eye. On 12 December a large firecracker exploded outside the headquarters of the agency Equitalia in Naples. The explosion causes damage of the lower part of the gate valve iron input current Southern.

On 15 December an envelope, containing gunpowder and a primer, is caught in the seat of Equitalia Flaminio in Rome on the Tiber. On 20 December an envelope containing white powder with no sender is delivered to the site via Equitalia Millevoi. On 22 December, two envelopes containing suspicious powder is delivered to the Stock Exchange in the square in Milan and the Business of Equitalia in Via San Gregorio. On 4 January an anonymous caller warns of a bomb the headquarters of Perugia Equitalia. After the appropriate checks reveals a false alarm.

January 5 at Leghorn a threatening letter and a 7.65 caliber bullet is sent to the Director of the office of Equitalia of Livorno. The same day at Caserta a parcel containing gunpowder and intended to Equitalia of Caserta is intercepted by the Post Office, insospettitesi the lack of sender. Inside is also found a threatening letter. On January 9, an envelope containing suspicious powder and addressed to Equitalia is intercepted in the post office of Ischia and a second envelope with gunpowder and a piece of rope as a wick reaches the site of the Tiber Equitalia Flaminio in Rome.

Moody's cuts ratings on 26 Italian banks
14 May 2012, by Drew FitzGerald (MarketWatch)

Moody's Investors Service on Monday downgraded 26 Italian banks to reflect the reduced level of support they might receive from the national government should they run into trouble.

Moody's cut 10 banks by one notch and lowered another eight by two notches.

Six banks received three-notch downgrades and two were cut by four notches.

Five of the banks downgraded Monday are part of larger financial groups.

Moody's has warned in recent months it could lower its credit ratings on number of European financial institutions due to ongoing fiscal woes in their home countries.

The changes often reflect the countries' decreased ability to bail out potentially troubled banks more than any change in the individual institutions' credit metrics.

Italian authorities increase security at 14,000 sites, assign body guards

Italy increased security Thursday at 14,000 sites, and assigned bodyguards to protect 550 individuals after a nuclear energy company official was shot and letter bombs directed to the tax collection agency.

Under the enhanced measures, Interior Minister Anna Maria Cancellieri deployed 20,000 law enforcement officers to protect individuals and sensitive sites. In addition, 4,200 military personnel already assigned throughout Italy will be redeployed according to new priorities.

“Based on a thorough analysis of the situation, Interior Cancellieri has confirmed the need to maintain a high level of vigilance, strengthen the security measures against sensitive targets and those exposed to specific risks,” the Interior Ministry said in a statement.

Spain region, Greek exit warnings rattle euro zone


(Reuters) - Central banks and companies risk making a grave error if they do not brace for a possible Greek exit from the euro zone, Belgium's foreign minister said on Friday, rattling markets already alarmed by Spain's deteriorating finances.

Greek elections are scheduled for June 17 and could hasten the country's departure from the currency club should a government intent on ripping up the country's bailout program result.

Contrasting findings of opinion polls on Friday showed the outcome is too tight to call.

Greece accounts for little more than 2 percent of the euro zone economy but could pose a profound contagion threat if it quit the currency area, throwing the spotlight on Portugal, Spain and even Italy.


Italian yields rise in 5- and 10-year auctions
30 May 2012, by Sara Sjolin - London (MarketWatch)

The Italian government on Wednesday sold a total of €5.732 billion of medium and long term Treasury bonds, at higher borrowing costs than at previous auctions with same maturities, Dow Jones Newswires reported.

The Italian Treasury sold €3.391 billion in 5-year bonds, just below its target range, at a yield of 5.66%.

The government also sold €2.341 billion in 10-year bonds at a yield of 6.03%, higher than the 5.84% produced at the previous auction with same maturity.

For the 10-year bond, the government had aimed at selling between €2 billion and €2.75 billion, according to DJ. In the secondary market,

yields on 10-year Italian government bonds surged 21.6 basis points to 6.111%, according to electronic trading platform Tradeweb.

Italy earthquakes will hit economy hard
30 May 2012 - The strong earthquakes that hit the northern Italian region of Emilia Romagna in the past days will have prolonged economic effects that will worsen an already difficult situation, Italy's main business association said on Wednesday.
"The earthquakes in May, which had very serious effects on people's lives, will also have prolonged consequences for some of the most important industrial regions in Italy and for an area with strong manufacturing activity," business lobby Confindustria said in an economic report.
"This can only worsen an already very difficult situation," it said.

Emilia Romagna, one of Italy' richest and most productive regions, was hit by a deadly magnitude 5.8 earthquake and a series of aftershocks on Tuesday, just over a week after a force 6.0 tremor in the same region.
More than 20 people were killed in the two earthquakes which caused a swathe of destruction across the region.;_ylv=3

ECB Must Print Euros or Italy May Say ‘Ciao:’ Berlusconi
1 June 2012  Bloomberg
Former Premier Silvio Berlusconi said Italy should say “ciao, euro” if the European Central Bank doesn’t start printing money to tackle the debt crisis and Germany should quit the single currency if it won’t back a bolder role for ECB.
“The economic crisis can’t be solved” in Italy, Berlusconi said in comments posted on his party’s website today. He called on Prime Minister Mario Monti to “change his political line” and lobby European leaders to back a money- printing campaign by the Frankfurt-based ECB.
If the central bank doesn’t become a “lender of last resort,” Italy should say “ciao, euro,” the former premier said.

The media tycoon-turned-politician became the latest European leaders to step up pressure on German Chancellor Angela Merkel and the ECB to permit a more aggressive response to the region’s debt crisis.
Monti yesterday called on Merkel to drop her opposition to allowing the euro region’s rescue mechanism to lend directly to banks.

Italian Jobless Rate Rose to 10.2% in April Amid Slump
1 June 2012 (Bloomberg)
Italy’s joblessness rose more than economists forecast in April to the highest in 12 years amid a deepening slump in Europe’s fourth-biggest economy.
The unemployment rate increased to a seasonally-adjusted 10.2%, the highest since the first quarter of 2000, from a revised 10.1% in March, Rome-based national statistics office Istat said in a preliminary report today.

Economists forecast an increase to 9.9%, the median of 10 estimates in a Bloomberg News survey showed.
The jobless rate rose to 9.8% in the first quarter from 9.1% in the previous three months, Istat said.
The economy, in its fourth recession since 2001, will contract 1.5% this year before expanding 0.5% in 2013, Istat forecast in its annual report May 22.
Industrial output probably declined 0.6% last month as two earthquakes in the north weigh on Italy’s outlook with “lasting” consequences on production, Rome-based employers lobby Confindustria said in a May 30 note.

Italy, Spain default insurance costs hit record
1 June 2012  The cost of insuring Spanish and Italian government debt against default via instruments known as credit default swaps, or CDS, hit new records on Friday, according to data provider Markit.
The spread on five-year Spanish CDS widened to 610 basis points from 596 basis points on Thursday.
That means it would now cost $610,000 annually to insure $10 million of Spanish debt against default for five years, up $14,000 from the previous day.
The spread on Italian CDS widened by 22 basis points to 579.
Core euro-zone countries also saw a rise, with the French CDS spread widening by 8 basis points to 225 and Germany widening by 4 basis points to 106, Markit said.

Berlusconi says idea Italy should dump euro was "joke"
ROME (Reuters) - Former Premier Silvio Berlusconi said on Saturday he was only joking when he suggested that Italy should dump the euro unless the European Central Bank agreed to inject more cash into the economy.
"We have to go to Europe and say forcefully that the ECB should start printing money. If it doesn't, we should have the strength to say 'ciao, ciao' and leave the euro," Berlusconi said on Friday in an entry on his Facebook page.
Less than 24 hours later, the former leader reversed his position, which clashed with that of Prime Minister Mario Monti and threatened to undermine the government almost a year ahead of the next national vote.
"That a joke ... could be mistaken for a proposal is certainly a serious mistake for whoever claims to provide political news," Berlusconi wrote on Saturday on his Facebook page.;_ylv=3

Could Italy be next? Fears after Spain bank rescue


Even as the global economic community hailed an agreement to rescue Spain's stricken banks, there was concern in Rome on Sunday that investors could now begin treating Italy as the next weak link in the eurozone.

Those fears have been fueled by a report from Moody's ratings agency warning that Spain's banking troubles could be "a major source of contagion" for Italy where lenders are also highly reliant on European Central Bank funding.

"Italy is now the only country in difficulty that has not had to ask for a bailout," said Federico Fubini, a columnist for the top-selling Corriere della Sera daily, after aid packages for Greece, Ireland, Portugal and now Spain.

Without a stabilisation in borrowing costs on the debt markets for Italy and Spain and a Europe-wide agreement on the banking system, Fubini said that "the uncertainty will be very high and scrutiny of Italy will grow ever higher."

Italy's borrowing costs are lower than Spain's -- indicating greater investor confidence -- but they have been moving in line with Spanish ones.


BANK HOLIDAY June 10, 2012
The Bank of Italy authorized the suspension of payments without communicating anything to the depositors.  They gave the impression of an imminent rescue, then closed without giving any prior notice to the depositors, leaving them in no condition to perform any type of operation, even basic ones for daily survival, such as withdrawals / payments, utilities payments, rates, taxes.
This is not new to Bank of Italy.
(I cant find a link in English)

CJ wrote:
BANK HOLIDAY June 10, 2012
The Bank of Italy authorized the suspension of payments without communicating anything to the depositors.  They gave the impression of an imminent rescue, then closed without giving any prior notice to the depositors, leaving them in no condition to perform any type of operation, even basic ones for daily survival, such as withdrawals / payments, utilities payments, rates, taxes.
This is not new to Bank of Italy.
(I cant find a link in English)

via Drudge:

BNI depositors unable to make withdrawals / payments, payments of utility bills, mortgage payments, taxes
Peter Giordano, Adiconsum: "Grave of the Bank of Italy's attitude that takes action without considering the impact on depositors, and especially on single-income families and pensioners"

Adiconsum Bank of Italy asks for an urgent meeting and the lifting of the

The Bank of Italy authorized the suspension of payments by Bank Network Investments SpA (BNI) without communicating anything to the depositors.

Very serious and unacceptable - says Peter Jordan, Secretary General Adiconsum - the attitude of the Bank of Italy SpA in each BNI, because highly prejudicial to the interests of customers.

Bank of Italy, in fact, after extending the receivership of the bank, thus giving the impression of an imminent rescue, then gave the green light for compulsory winding up, without giving any prior notice to the depositors, leaving them in no condition to perform any type of operation, even basic ones for daily survival, such as withdrawals / payments, utilities payments, rates, taxes.

We must unfortunately note that offensive measures as those adopted to customers BNI - Giordano complaint - not an isolated case. Decisions without taking into account the heavy impact, particularly on savers in possession of a single bank account on which accrediting salary or pension, are not new to Bank of Italy, and also affected depositors of Banca MB.

The attitude of the Bank of Italy - Jordan continues - is bureaucratic and deed and as Adiconsum we asked in a letter sent to the Bank of Italy and the lifting of the BNI and an urgent meeting to define the way in which customers, especially Fixed-income families and pensioners, can perform normal daily operations.

Italy in focus amid fears of contagion

Italy must make more progress with its financial reforms to avoid being targeted by traders looking for the “next in line” for an international rescue after Spain’s request for help.

Economists and analysts warned that Italy could face a turbulent few days amid concerns about contagion from Spain.

Daniel Gros, head of the Centre for European Policy Studies in Brussels, said: “After Spain, there will not be the margins to help Italy. It will be defenceless and forced to help itself if the situation deteriorates.”

The Italian business newspaper Il Sole 24 Ore said the €100bn (£80bn) deal to prop up Spain’s banks “represents the removal of the filter that separates our country from the group of other countries in difficulty”. Another paper, Corriere della Sera, said: “Italy is now the only country in difficulty that has not had to ask for a bail-out.”

Compared to Spain, Italy’s banks are stronger and its borrowing lower. But last week Moody’s said Spain’s banking troubles could be “a major source of contagion” for Italy. The rating agency downgraded 26 Italian banks last month, including UniCredit and Intesa Sanpaolo.

The Spanish rescue was designed to calm markets ahead of the crucial elections in Greece next Sunday. However, this weekend the anti-austerity leftist party, Syriza, was main­taining its lead in the polls. Evangelos Venizelos, head of the mainstream Pasok party, today said that he had written to the other political leaders warning them of a “bogus impasse” that threatens to return another hung parliament.



Italy Moves Into Debt-Crisis Crosshairs After Spain

The 100 billion-euro ($125 billion) rescue for Spain’s banks moves Italy to the frontline of Europe’s debt crisis, putting pressure on Mario Monti’s unelected government to avoid succumbing to a market rout.

“The scrutiny of Italy is high and certainly will not dissipate after the deal with Spain,” Nicola Marinelli, who oversees $153 million at Glendevon King Asset Management in London, said in an interview. “This bailout does not mean that Italy will be under attack, but it means that investors will pay attention to every bit of information before deciding to buy or to sell Italian bonds.”

Italy has more than 2 trillion euros of debt, more as a share of its economy than any advanced economy after Greece and Japan. The Treasury has to sell more than 35 billion of bonds and bills per month -- more than the annual GDP of each of the three smallest euro members, Cyprus, Estonia and Malta.

Spanish Economy Minister Luis de Guindos said on June 9 that he would request as much as 100 billion euros in emergency loans from the euro area to shore up a banking system hobbled by more than 180 billion euros of bad assets. Mounting concern about the state of Spain’s banks and public finances drove the country’s borrowing costs to near euro-era records last month, dragging up Italian rates in the process.

The problem for Italy is that where Spain goes, there’s always the perception that Italy could follow,” Nicholas Spiro, managing director at Spiro Sovereign Strategy in London said in an interview. ’’There is insufficient differentiation within the financial markets. It is clear as the light of day and has been that Spain’s fundamentals are a lot direr than Italy’s. That hasn’t stopped Italy suffering from Spanish contagion.’’


Italian BNI Bank Declares Bank Holiday Until July 1st, People in Panic:

Yields for Spanish, Italian bonds spike higher
12 June 2012, by Barbara Kollmeyer - Madrid (MarketWatch)

The yield on Spain's 10-year bond yield spiked above 6.7% on Tuesday, taking out highs reached last November.

The yield shot up 28 basis points in late afternoon trading, to 6.81%, according to Tradeweb.

That is the highest level on record according to Tradeweb charts, which go back to 2008.

The yield on Italy's 10-year government bond jumped 23 basis points to 6.27%.

As bond yields spiked, European stocks turned lower across the board.

Yields for Spain have been under fresh pressure this week due to disappointment over the bailout plan for the nation's banks.

Italian yields have been moving in lockstep, with concerns as well that that government may need a bailout at some point.

Italy borrowing costs rise on Spain concern
13 June 2012, (MarketWatch)

-- Spanish and Italian yields stay close to highs on fears Spain will need a bailout

-- German bunds under pressure on contagion fears, but auction reassures

-- Italian borrowing costs climb at bill sale

Austrian minister says Italy too may need bailout


VIENNA/ROME (Reuters) - Raising the stakes in Europe's debt crisis, Austria's finance minister said Italy may need a financial rescue because of its high borrowing costs, drawing a sharp denial on Tuesday from the Italian prime minister.

Maria Fekter's assessment of the euro zone's third largest economy stoked investors' fears that Europe is far from ending 2-1/2 years of turmoil - a feeling reinforced by Dutch Finance Minister Jan Kees de Jager, who said the euro zone was "still far from stable".

A deal by euro zone finance ministers on Saturday to lend Spain up to 100 billion euros ($125 billion) to recapitalize its banks was seen by many in the markets as yet another sticking plaster. Spanish 10-year bond government yields soared to 6.81 percent, their highest level since the euro's launch in 1999.

Euro zone rescue funds, already stretched by supporting Greece, Portugal, Ireland and soon Spain, might be insufficient to cope with Italy as well, Fekter said in a television interview on Monday night.


Italy Pays More For 6 Month Debt Than America Pays For 30 Year, As LTRO Claims Its First Bank Insolvency
27 June 2012, by Tyler Durden (Zero Hedge)

Today Italy had a rather critical Bill auction in which it sold €9 billion in debt due six months from today.

Obviously, since the maturity is well inside of the LTRO, the auction itself was rather meaningless from a risk standpoint.

Still, the good news is that Italy managed to place the entire maximum amount targeted.

The bad news: it cost Italy more to raise 6 months of debt, or 2.957%, than it costs the US to borrow for 30 years (2.70%).


Moody’s Downgrades Italy’s To Baa2 From A3, Negative Outlook – Full Text
12 July 2012, by Tyler Durden (Zero Hedge)

Sicily close to the default: salaries and pensions are at risk
16 July 2012, (Wall Street Italia)
(google trans fom Italian)


The Region and the 'brink of failure. Sounding the Alarm 'Ivan Lo Bello, Vice President of Confindustria: "It should be rethought and the autonomy necessary to initiate a truth.'"

And 'Greece of Italy: €5 billion hole.

Rome - Sicily is "bankrupt, close to default."

The warning from the pages of the Corriere della Sera and 'Vice President of Confindustria, Ivan Lo Bello, according to which "must be rethought and also the autonomy necessary to initiate a' process-truth '.

Likely to be the Greece of Italy: in the Court of Auditors and the hole €5 billion.

But the debt consolidated, and 'much more' high, warns Lo Bello. "We must take note of the situation and figure out if and 'can move forward."

Van "completely changed the prevailing model of support and to avoid parasitic elements," Lo Bello said in a posting to RaiNews24.

The intent 'to shake the torpor of the Sicilians, from regional to retired employees of the same region that will be the first to be without salary in case of collapse.

Egan Jones Triple Hooks Italy: Boots The Boot To CCC+ From B+, Watch Negative
25 July 2012, by Tyler Durden (Zero Hedge)

And another country falls to the Egan Who juggernaut.

Synopsis: Italy and its regional governments need to rollover approximately EUR183B in 2012 and EUR214B next year and is likely to experience increasing yields and restricted access without external intervention. Yields on the 10 year bonds are near 6.5%; rates have been rising despite prior ECB purchases. Future intervention by the ECB and IMF will provide some liquidity but might subordinate existing creditors. Italy cannot support all of its debt if the EU economy falters. Debt/GDP will continue to rise and the country will remain pressed. We are downgrading from " B+ " to " CCC+ " , with a neg. watch

Look for the "reputable" raters such to follow suit in downgrading Italy in 2-3 months.


Spain, Italy reject bailout; Draghi says euro 'irreversible'

Spain and Italy rejected Thursday the need for a bailout after markets fell sharply on disappointment that the European Central Bank did not announce new immediate steps to tame the eurozone debt crisis.

ECB head Mario Draghi insisted earlier that the embattled single currency was "irreversible," damning speculative financial market bets against the euro for pushing up government borrowing costs to unsustainable levels.

But in the absence of concrete measures, the markets returned to the attack, with Spanish borrowing costs spiking back to danger levels above 7.0 percent and Madrid stocks slumping more than 5.0 percent as Italy was also hit badly.

United in adversity, Spanish Prime Minister Mariano Rajoy told a joint news conference in Madrid with his Italian counterpart Mario Monti that their "two countries want to work together" to get through the debilitating crisis.


S&P downgrades Italian banks on deeper recession
3 August 2012, by Nathalie Tadena (MarketWatch)

Standard & Poor's Ratings Services raised its economic-risk score on Italy and downgraded 15 Italian banks, noting the country faces a deeper and more prolonged recession than the firm had originally anticipated.

S&P also lowered its outlook on one bank and removed ratings on four of them from negative Credit Watch.

A severe recession likely will increase Italian banks' problem assets in 2012 and 2013 to levels higher than anticipated, and higher than other banks in Europe, the ratings firm said.

At the same time, the banks' coverage of problem assets has weakened in the past few years, S&P said.


Italy's Latest Record Debt Load: Bigger, Faster, More
13 August 2012, by Tyler Durden  (MarketWatch)

Italy just announced its all-time record high general government debt load at €1.973 trillion.

What is perhaps most stunning, given all the talk of austerity, cutting back, reforms, and change is that the size of this debt is growing at an ever-increasing pace that is simply stunning.

Pre-Euro (1999), Italy's debt was growing at a rate of just less than €2 billion per month; in the eight years from then until the crisis in 2008,

Italy's pace of debt growth (fostered we are sure by the convergent cheapness of funding and their immutable belief in invincibility) almost perfectly doubled to €3.8bn per month.

Since 2008, and the onset of excess Keynesian ridicule we assume, Italy's debt load has grown at a stunning pace of €6.4 billion per month and perhaps most incredible; however,

the last nine-months (since the peak 'peak' of the crisis in September of last year) has seen the pace of debt-load growth surge to €9.5 billion per month

Sustainable levels of exponential debt growth - sure!

Moody's downgrades world's oldest bank to junk
18 OCTOBER 2012
Moody's credit rating agency on Thursday downgraded the world's oldest bank, Italy's Banca Monte dei Paschi di Siena, to "junk" status on worries government recapitalisation plans will prove insufficient.
The lowering of BMPS's rating by two notches to "Baaa3", a non-investment grade, reflects Moody's view that "there remains a material probability that the bank will need to seek further external support," the agency said.
Critically exposed to the eurozone debt crisis, in June BMPS was forced to accept a government bailout, borrowing roughly 1.5 billion euros ($1.87 billion) in order to pay off debt and shore up its capital.

450,000 Businesses Shut Down in Italy; Non-Performing Loans Jump 15.3%, Write-Downs 21.6%
25 November 2012, by Mike Shedlock (MISH'S Global Economic Trend Analysis)

Italian debt hits record high of $3.2 trillion
14 December 2012, Milan (AP)$3,2-trillion

Italian public debt has swelled to its highest level ever, reaching €2.014 trillion ($3.2 trillion) in October.

The Bank of Italy on Friday said that the debt pile has risen by 3.7% since January 2012, when it was €1.94 trillion.

The Italian economy, the third-largest among the 17 European Union countries that use the euro, is in recession as the government has enacted spending cuts and tax hikes to get a handle on its debts.

Italy has the second-highest debt level as a percentage of its GDP in the eurozone, behind only Greece.

Italy's borrowing costs have been kept down in recent months, thanks mainly to a European aid program it has the option to tap, despite political uncertainty raised by Silvio Berlusconi's possible return to politics.

Is This The Beginning Of A Horrifying Stock Market Crash In Europe?

Are we witnessing the start of a historic financial meltdown in Europe?  In recent days, two massive corruption scandals have greatly shaken confidence in European financial markets.  The first involves Spanish Prime Minister Mariano Rajoy.  It is being alleged that he has been receiving illegal cash payments, and the calls for his resignation grow louder with each passing day.  The second is a derivatives scandal at the third largest bank in Italy.  Allegedly, there were some very large unreported derivatives deals that were supposed to help hide losses at the bank, but instead they actually made the losses much larger.  The investigation that is looking into this derivatives scandal is starting to spread to other banks, and nobody is quite sure how far down the rabbit hole this thing goes.  But what everyone does agree on is that this derivatives scandal has shaken up Italian politics, and the outcome of the upcoming election is now very uncertain.  Former Prime Minister Silvio Berlusconi is rapidly rising in the polls, and the European establishment is less than thrilled about that.  Meanwhile, stock indexes all over Europe fell rapidly on Monday, and even the Dow was down 129 points.  So will all this blow over in a few days, or is this the beginning of a full-blown stock market crash in Europe?

That is a very good question.  Perhaps there would not be so much concern if the overall European economy was doing well, but the truth is that the underlying economic fundamentals in Europe have continued to get even worse.  The unemployment rate in the eurozone is at an all-time high, and the unemployment rates in both Greece and Spain are now over 26 percent.  Much of southern Europe is already in the midst of a full-blown economic depression, so it really has been remarkable that the financial markets in Europe have been able to hold up as well as they have so far.

But now all of that may be changing.  Just check out what happened on Monday according to Bloomberg…

   National benchmark indexes declined in all of the 18 western European markets, except Greece and Denmark. Italy’s FTSE MIB Index (FTSEMIB) sank 4.5 percent, the most in six months. Spain’s IBEX 35 slid 3.8 percent for a sixth day of declines, the longest losing streak in 10 months. France’s CAC 40 plunged 3 percent for the biggest drop since April. The U.K.’s FTSE 100 dropped 1.6 percent and Germany’s DAX lost 2.5 percent.

Unfortunately, what happened on Monday was just the continuation of a trend that started last week.  The following is from Zero Hedge…

   The last four days have seen the biggest plunge in over six months with the IBEX (Spain -5.7%) and Italy’s MIB -6.7%. At the same time, Europe’s seemingly invincible OMT-promise-protected sovereign bond market has started to underwhelm. Italian bond spreads are 32bps wider and Spain 28bps wider – the biggest increase in risk in two months.

European banks have been hit particularly hard during this recent downturn.

Just check out some of the huge declines that European banking stocks experienced on Monday…

UniCredit SpA: -8.3 percent

Commerzbank AG: -5.9 percent

Santander: -5.7 percent

Intesa Sanpaolo SpA: -5.4 percent

Credit Agricole SA: -5.4 percent

Société Générale SA: -4.8 percent

Banco Bilbao Vizcaya Argentaria SA: -4.7 percent

Those are huge moves for just a single day of trading.  If we have a couple of more days like that, everyone is going to be talking about a “stock market crash” in Europe.

Unfortunately, it does not appear that any solutions to the scandals that are shaking up southern Europe right now will be forthcoming any time soon.

In Spain, it is increasingly looking like the Prime Minister may actually have to resign.  A recent CNN article explained what the scandal is all about…

   Rajoy denied on Saturday allegations that he and other leaders of his conservative People’s Party had received secret cash payments from a fund operated by the party’s former treasurer. Rajoy said he would publish details of his personal wealth and income tax states on the prime minister’s website.

Of course politicians all over the world are accused of doing evil things all the time, but in this instance it appears that there may be some solid evidence that Rajoy may not be able to deny.  The following comes from a Bloomberg report…

   Newspaper El Pais last week published allegations of illegal cash payments, featuring extracts from handwritten ledgers by the former People’s Party Treasurer Luis Barcenas showing payments to officials including Rajoy.

At this point, opinion polls are showing that even most of his own supporters do not believe him…

   Polls show that 60pc of his own supporters do not believe the official explanation. A national petition drive calling for his resignation has already collected almost 800,000 signatures. Socialist oppo­sition leader Alfredo Pérez Rubalcaba yesterday joined the chorus calling for Mr Rajoy’s head, saying the country had ­become “ungovernable”.

So definitely expect things in Spain to get worse before they get better.

Meanwhile, the derivatives scandal in Italy continues to get more “interesting”.  Italy’s third largest bank is on the brink of collapse due to huge problems with derivatives contracts, and that bank just happens to be closely linked with the Italian politician that is currently leading in the polls…

   The Italian scandal is related to Italy’s third-biggest bank, Monte dei Paschi di Siena, which has received two government bailouts and may yet have to be nationalized as its losses mount.

   The bank is closely associated to Italy’s Democratic Party, whose leader, Pier Luigi Bersani, is leading in the polls, though slipping from his highs as former prime minister Silvio Berlusconi makes a late surge before the Feb. 25th general election. “The Monte [banking] scandals now look like overwhelming the Italian election campaign and put [Mr.] Bersani and the Democratic Party’s victory at risk,” James Walston, political commentator at the American University of Rome,  said in his Monday blog.

   The Monte scandal centres on allegedly unreported derivatives deals that were apparently designed to hide losses and instead made the losses deeper. The bank, now under new management, has admitted that the derivatives losses might total more than €700-million.

So who benefits from all of this?  Well, it turns out that as a result of this scandal former Prime Minister Silvio Berlusconi is rapidly gaining more support.  The following is from a recent Telegraph article…

   In Italy, ex-premier Silvio Berlusconi has upset the political landscape just three weeks before elections, surging back into contention with vows to rip up “German-imposed” austerity policies and cancel a hated property tax.

   His Right-wing alliance has risen to 28pc in the polls, relishing a widening scandal at Banca Monte dei Paschi that has embroiled the Italian left.

But even if none of these scandals had happened, it was inevitable that the gigantic debt bubble in Europe would end up bursting at some point

In fact, the entire globe is on the verge of a debt implosion.  This was something that Bill Gross of Pimco discussed in his February newsletter…

   “So our credit-based financial markets and the economy it supports are levered, fragile and increasingly entropic – it is running out of energy and time. When does money run out of time? The countdown begins when investable assets pose too much risk for too little return; when lenders desert credit markets for other alternatives such as cash or real assets.”

No debt bubble can expand indefinitely.  At some point it can no longer hold itself together.

Europe is rapidly approaching that point, and so is the United States.

So how much time do we have left?

Feel free to share your thoughts on that question by posting a comment below…

Wasn't Berlusconi an Italy disgraced PM in recent years?

Wow...whatever up is down, and down is up nowdays.

Pope's resignation could hurt Berlusconi in Italian vote

ROME (Reuters) - Pope Benedict's resignation could limit the chances of former Italian prime minister Silvio Berlusconi closing the gap on the center-left frontrunner before this month's election, some pollsters and analysts say.

Berlusconi, who seemed certain to lose a few months ago, has staged an aggressive campaign based on tax-cut promises that has eroded the lead of Pier Luigi Bersani's Democratic Party (PD) and raised the prospect of an inconclusive outcome.

However, some pollsters say the pope's resignation could clip Berlusconi's wings by eclipsing the election campaign on television and newspapers at a time when he has just 12 days left to win over voters.

"This will put the campaign on ice for a while and that is bad news for Berlusconi who still needs to make up ground," said Renato Mannheimer, head of the ISPO polling agency.

Final polls published on Friday before a two-week blackout ahead of the February 24-25 vote gave Bersani an average lead of 5.7 points, down from above 10 percent before start of the campaign.


Insight: Rome will burn, regardless of Italian election result


ROME (Reuters) - Regardless of who wins next weekend's parliamentary election, Italy's long economic decline is likely to continue because the next government won't be strong enough to pursue the tough reforms needed to make its economy competitive again.

Bankers, diplomats and industrialists in Rome and Milan despair at how Italians are shifting allegiances ahead of the February 24-25 vote to favor anti-establishment upstarts and show disgust with the established parties.

That makes it more likely that no bloc will have the political strength to tackle Italy's deep-rooted economic crisis, which has made it Europe's most sluggish large economy for the past two decades.

Final opinion polls predict that the vote will deliver a working majority in both houses for a centre-left coalition governing in alliance with technocrat former prime minister Mario Monti. Political risk consultancy Eurasia assigns this scenario a 50-60 percent probability.


Italians head to polls in crucial vote for euro zone


ROME (Reuters) - Italians vote on Sunday in one of the most closely watched elections in years with markets nervous about whether it will produce a strong government to pull Italy out of recession and help resolve the euro zone debt crisis.

A huge final rally by anti-establishment-comedian-turned-politician Beppe Grillo on Friday before a campaigning ban kicked in has highlighted public anger at traditional parties and added to uncertainty about the election outcome.

Polling booths will open between 02:00 am-04:00 pm EST on Sunday and 01:00 am-09:00 am EST on Monday. Exit polls will come out soon after voting ends and official results are expected by early Tuesday.

The election will be followed closely by financial markets with memories still fresh of the potentially catastrophic debt crisis that brought technocrat Prime Minister Mario Monti to power more than a year ago.


Hhhmmm...let's see...a once disgraced former PM "decides" to run again making a "comeback"...then somehow "surges" in the polls...only for his "momentum" to come to a halt after the Pope announces his resignation 2 weeks ago.

Kinda sounds familiar over what happened with this last election in America(and pretty much previous elections before that)? Rolling Eyes

Exit polls: Center-left tops Italian national vote

Exit polls: Center-left leading critical Italian election test of economic reform resolve
By Colleen Barry and Frances d'Emilio, Associated Press | Associated Press – 1 hr 13 mins ago

ROME (AP) -- Italian voters appeared to reject Silvio Berlusconi's bid for a triumphant comeback, exit polls showed Monday, as a center-left coalition that has suggested it would stay the course of painful economic reforms took the lead in the country's pivotal election.

The Italian election has been one of the most fluid in the last two decades thanks to the emergence of a strong protest party, and was being watched closely by Italy's eurozone partners and international investors.

The decisions Italy's government makes over the next several months promise to have a deep impact on whether Europe can decisively stem its financial crisis. As the eurozone's third largest economy, its problems can rattle market confidence in the whole bloc and analysts have worried it could fall back into old habits.

The Milan stock market rose 2.9 percent after the polls closed and exit polls were published, with the benchmark FTSE MIB hitting 16,704.19 points.


Early results point to gridlock in crucial Italy elections
25 Feb 2013
The prospect of political paralysis hung over Italy on Monday as partial official results in crucial elections showed an upstart protest campaign led by a comedian making stunning inroads, and mainstream forces of center-left and center-right likely splitting control of Parliament's two houses.
The story of the election in the eurozone's third largest economy was shaping up to be the astonishing vote haul of comic-turned-politician Beppe Grillo, whose 5 Star Movement has capitalized on a wave of voter disgust with the ruling political class.

Another surprise has been the return as a political force of billionaire media mogul Silvio Berlusconi, who was forced from the premiership at the end of 2011 by Italy's debt crisis, and whose forces now seemed poised to capture the Italian Senate. His main rival, the center-left Pier Luigi Bersani, was headed toward victory in Parliament's lower house.
The unfolding murky result raised the possibility of new elections in the coming months and bodes badly for the nation's efforts to pass the tough reforms it needs to snuff out its economic crisis. After surging in the wake of exit polls, Milan's main stock index slumped with first projections before closing up slightly.

This is getting interesting...

Big tally for Berlusconi throws wrench into Italy's election
Silvio Berlusconi's party appears to have won Italy's upper house, thereby likely preventing one-time presumptive premier Pier Luigi Bersani from forming a governing coalition.
Silvio Berlusconi pulled off a Lazarus-like rise from political oblivion on Monday by securing enough support in Italy’s general election to hobble, or block altogether, the formation of a new government.
Early projections were fluid and sometimes contradictory, but the billionaire businessman’s conservative coalition seemed to have won a majority in the senate, the upper house of parliament.

Millions of Italians appeared to have been seduced by promises he made during a fiery election campaign, including pledges to repeal and pay back an unpopular property tax and to create millions of new jobs.

His portrayal of his center-left opponents as unreconstructed Communists, and of Germany as an unfairly harsh fiscal task master imposing austerity on Italians, also struck a chord with many voters.
But his unexpected victory is likely to plunge Italy into protracted political paralysis, dismaying the rest of Europe and rattling market confidence in the eurozone’s third biggest economy.

Messy Italian Election Shakes World Markets
2/25/13 ROME— In a national election meant to push Italy further down a path of economic reform, voters delivered political gridlock that could once again rattle Europe's financial stability.
Markets in Europe and the U.S. gyrated even in response to early returns. The Dow Jones Industrial Average swung nearly 300 points, ending with its worst day in almost four months, as the prospects of a stable government appeared to drop.

A majority of voters endorsed parties that had promised to tone down or even reverse the financial sacrifices Italy has promised its European partners, giving surprise lifts to both the center-right coalition of former premier Silvio Berlusconi and a party of protest led by a former comedian.

Late Monday, the left-wing coalition led by the Democratic Party's Pier Luigi Bersani appeared to have gained a razor-thin victory in the lower house of parliament over the center-right coalition headed by Mr. Berlusconi—29.6% to 29.2% with 99.9% of the ballots counted. By leading the vote count in the lower house, the Democratic Party will automatically get the majority of seats and, therefore, will likely receive the mandate to form a government.

The Senate, however, appeared headed for political impasse. The Democratic Party was the leading vote-getter in the upper house as well, by less than one percentage point. But its 31.6% result fails to provide its coalition with a majority to pass legislation. If a new government isn't able to guarantee clear parliamentary support, Italians could return to the polls within months.

Italian political deadlock casts new uncertainty on eurozone recovery
2/26/13  Markets tumbled and the value of the euro dropped in response to Italy's election results and their unexpectedly loud rejection of German-imposed austerity policies.
Europe’s murky path to recovery was rattled yet again Tuesday as markets and policymakers tried to digest the unexpected Italian electoral results and the consequences, especially on periphery economies.

A political stalemate in Rome all but condemns the country to new elections in less than a year, with all the implications for the economy. But the unexpectedly loud rejection of German-imposed austerity policies fueled market uncertainty over the already wobbly resolve of European governments to stick to fiscal conservative recipes.
Markets were stunned by voter rejection of Prime Minister Mario Monti’s austerity and by the triumph of the Five Star Movement, the anti-establishment party led by comedian Beppe Grillo that won the most votes of any single party.

Parties may struggle to form government in Italy
Challenge of forming coalition government in Italy: protest vote against austerity measures

2/27/13 - A center-left group of parties appears to have the best shot at forming a coalition government in Italy after an inconclusive national election, but the challenge is steep and comes amid public anger over austerity measures.
If Italian parties fail to form a governing coalition, new elections would be required, causing more uncertainty and a leadership vacuum, and that possibility rattled financial markets across Europe on Tuesday. In early Wednesday trading in Milan, the FTSE MIB rebounded 0.5 percent even though the country had to pay higher borrowing costs in a pair of bond auctions. The index has a long way to go to recoup the previous day's 4.9 percent fall though.

Pier Luigi Bersani and his center-left allies appeared on Tuesday to have won a narrow victory in the lower house of parliament, while the Senate looks split with no party in control. Silvio Berlusconi, the former Italian premier whose center-right coalition did better than expected, is a key player since his coalition is now the second-biggest bloc in the upper chamber.

Italy's political crisis deepens, Grillo refuses to support government
2/27/13 - An Italian political crisis that has rattled the euro zone deepened on Wednesday when two party leaders ruled out the most likely options to form a government and avoid a new election.
Populist leader Beppe Grillo slammed the door on overtures from center-left boss Pier Luigi Bersani with a stream of insults while Nichi Vendola, Bersani's junior coalition partner, ruled out a government alliance with the center-right.
These two options are currently seen as the only way to avoid returning to the polls in short order after the February 24-25 election, in which a huge protest vote against traditional politicians and austerity policies plunged Italy into deadlock.

Catastrophe for euro - Europe frets over Italy
2/27/13  Italy’s electoral earthquake is ‘‘a catastrophe for the euro and the European Union’’, according to Luxembourg’s foreign minister, Jean Asselborn.
Italy is big enough to bring down the eurozone if mishandled.
The verdict was much the same in chancelleries across the eurozone, especially in those countries already starting to feel the first wave of contagion.
‘‘The result touches us all,’’ said Spain’s foreign minister, Jose Manuel Garcia-Margallo. ‘‘It is a jump into the void that bodes well for nobody, neither for Italy, nor for the rest of Europe.’’

Italy's Berlusconi investigated in new corruption case
2/28/13 - Former Italian Prime Minister Silvio Berlusconi is under investigation on suspicion of bribing a senator to change sides in parliament, deepening the legal troubles of one of the key players in the country's post-election deadlock.
Berlusconi's lawyer Niccolo Ghedini said the accusation "was without foundation".

The allegations were detailed in a document from prosecutors posted on Thursday on the website of Italy's parliament, which must approve the court's request to search a Berlusconi security deposit box and access his phone records.
The fresh accusations come as parties including Berlusconi's center-right People of Freedom (PDL) struggle to form a government after this week's inconclusive election, which left no one with a majority in parliament.

According to the document, former Senator Sergio De Gregorio told prosecutors Berlusconi paid him 3 million euro ($3.92 million) to switch parties in 2006, a move which destabilized the center-left government and contributed to its eventual collapse.

"I told Berlusconi what I wanted... that the party should give me, either the party or he personally, should pay me 3 million," De Gregorio is quoted telling investigators, adding that he needed the money to get out of financial difficulties.
No comment was immediately available from De Gregorio's lawyer.
The new allegations emerged during a separate corruption probe against De Gregorio, who left the Italy of Values party in September 2006 and was re-elected as a senator, this time for Berlusconi's PDL, in 2008.

In a separate case, prosecutors in Reggio Emilia have opened an investigation into Berlusconi's campaign pledge to return property taxes paid last year if the center-right won the election.
The case was opened after two formal complaints filed by citizens, alleging that the offer constituted vote buying. PDL official Deborah Bergamini said in a statement that the investigation was "an illogical action aimed at intimidating anyone whom magistrates do not like".

In a statement, PDL Party Secretary Angelino Alfano said "the aggression by magistrates against Silvio Berlusconi is beginning again".
He said the party would organize a demonstration "to defend the sovereignty of the People of Freedom and Italian democracy".
In response, the head of the National Magistrates Association said: "We firmly reject the accusations, repeated periodically, that justice is used for political means."

Berlusconi often states that the cases against him are cooked up by "leftist judges" to damage him politically.
Berlusconi is on trial for tax fraud in a case centering on the purchase of broadcasting rights by his Mediaset group, for making public the taped contents of a confidential phone call, and for paying for sex with an underage girl.
He has faced up to 30 prosecutions for fraud and corruption over his career, but has never been definitively convicted.

Italy behind rise in eurozone jobless to record

LONDON (AP) — Italy's voters gave their verdict on the austerity medicine they've been forced to take when they went to the polls earlier this week. By Friday, one of the reasons behind the protest was highlighted when the country's unemployment hit its highest level in at least two decades.

Official figures Friday showed that unemployment in the country in January rose to 11.7 percent from the previous month's 11.3 percent. January's figure was the highest since the current way of measuring unemployment was introduced in 1992.

The unexpectedly large monthly spike was one of the key backdrops to the election results earlier this week that reignited concerns over Europe's dormant debt crisis. No party, or coalition of parties, emerged with enough votes to govern alone, triggering uncertainty in the markets about the future course of Italian economic policy.

The rise in the Italian rate, which comes as the country is stuck in an 18-month recession and after a wave of economic reforms and tight budgetary controls introduced to control the country's debt, was also the main reason why unemployment across the 17 European Union countries that use the euro rose to a record 11.9 percent during January from the previous month's 11.8 percent.


UPDATE 2-Grim jobless, debt figures underscore Italy's crisis

* Jobless rate hits highest since records began
   * Data shows economy has shrunk since 2001
   * 97,000 jobs shed in January compared to previous month
   * Youth unemployment nears 40 pct

   By Gavin Jones and Naomi O'Leary
ROME, March 1 (Reuters) - Italy's unemployment rate has hit
a 21-year high and its economy is now smaller than it was in
2001, data showed on Friday, underscoring the challenges the
country faces as it struggles to form a government after a
deadlocked election.
Joblessness jumped to 11.7 percent in January, and
unemployment among 15-24 year-olds rose to 38.7 percent, both
the highest figures on records dating back to 1992, statistics
agency ISTAT said.
"Italy is in ruins," said Rahma Aden, 28, who travels into
central Rome from the suburbs to do cash-in-hand odd jobs and
cleaning work for about 7.50 euros an hour.
"People all around me are losing their jobs... If you have
work you hold on to it tight, and keep your mouth closed even if
they treat you badly. Otherwise you'll have your dismissal
letter in your hand in an instant."
The country shed 97,000 jobs in January compared with
December, while 310,000 were lost compared with the same month
last year.
Italy has been the most sluggish economy in the European
Union for well over a decade. In 2012, real GDP adjusted for
inflation was below the level of 2001, meaning that its economy
has shrunk overall over the last 11 years.


Bersani ultimatum may bring new Italy election closer

ROME (Reuters) - Italy could be inching closer towards another election within months after center-left leader Pier Luigi Bersani issued an ultimatum to anti-establishment 5-Star Movement boss Beppe Grillo to support a new government or return to the polls.

Last week's inconclusive election, in which Grillo won a huge protest vote, left no group with a working majority in parliament, making an alliance with a rival the only way out.

In an interview on RAI state television late on Sunday, Bersani underlined his opposition to two of the options currently being floated - another technocrat government like the outgoing one led by Mario Monti or a grand coalition with Silvio Berlusconi's center-right.

That would leave only one possibility to avoid elections - Grillo's backing for the center-left, which won the lower house in the election but does not have enough support to rule in the Senate.


UPDATE 1-Berlusconi parties were for prostitution - prosecution

* Prosecution says "bunga bunga" parties involved prostitution

* In statement, Berlusconi says lucky enough to never have to pay

* Berlusconi and "Ruby", then a teenager, deny they had sex

* Media magnate's dental hygienist accused of prostitution (Adds Berlusconi statement)


Italian president mulls new technocrat government: sources

ROME (Reuters) - President Giorgio Napolitano is considering appointing a new technocrat government led by a non-politician as one way out of Italy's political stalemate, Italian officials said on Tuesday.

Such a solution would come into play if center-left leader Pier Luigi Bersani failed to form a government after receiving an initial mandate from Napolitano, as is expected, they said.

"Napolitano wants a government with the broadest possible support that will last as long as possible," one of the officials told Reuters.

Bersani won a majority in the lower house of parliament and says he has the right to be the first to try to form a government, although he has no workable majority in the Senate.

However, 5-Star Movement leader Beppe Grillo, who holds the whip hand after winning a huge protest vote, responded to speculation about a technocrat government in Italian media on Tuesday by saying he would not support such an administration.

"Technocrat governments don't exist in nature but only political governments supported by parliamentary majorities. The Monti government was the most political government since the war," he said on his blog.


Italy's Bersani seeks way forward after vote impasse

ROME (Reuters) - Italian center-left leader Pier Luigi Bersani, under fire for falling short in last week's election, sought on Wednesday to rally his party behind a plan to form a minority government backed by populist leader Beppe Grillo.

Bersani, whose coalition threw away a 10-point lead in the opinion polls before the February 24-25 vote, won control of the lower house but let slip a workable parliamentary majority by failing to win the Senate.

The result has left no group able to form a government on its own and Italy facing weeks of uncertainty. A new election could be called within months if no accord can be reached between the divided parties.

In an address to officials of his Democratic Party in Rome, Bersani, a 61-year-old former industry minister, acknowledged that the result was a defeat but said the left was the only political force capable of forming a government.


Berlusconi Convicted in Wiretap Case
Former Italian Premier Silvio Berlusconi was convicted Thursday over the illegal publication in a newspaper owned by his media empire of wiretapped conversations related to a bank takeover attempt.

A Milan court found Berlusconi guilty of breach of confidentiality and sentenced him to one year in jail, though it did not issue an order on carrying out the sentence. In Italy, it is rare for anyone to be put behind bars pending a possible appeal except in the case of very serious crimes like murder.

The verdict, the first of three expected for Berlusconi in the coming weeks, comes at a moment of political uncertainty for the country after February national elections failed to elect a clear winner. Berlusconi's center-right coalition finished second.

The conviction, however, has no bearing on Berlusconi's eligibility to participate in discussions on forming a new government, which are expected to begin March 20. Lawmakers have failed, despite several attempts, to pass a law banning candidates from Parliament after any criminal conviction.

While Berlusconi's party won't be tapped to form a new government, a task that is expected to fall to Pier Luigi Bersani on the center-left, President Giorgio Napolitano will be looking to secure as broad agreement as possible for legislative priorities.

Napolitano's role as president is to preside over coalition talks by convening the parliamentary groups for private meetings in which he seeks to gain consensus for a new government — a particularly difficult task given the three-way gridlock resulting from last month's vote.

The third player with influence on the discussions is comic-turned-civic leader Beppe Grillo, who has said his movement —which gained 25 percent of the vote — won't formally support any government with a vote of confidence, which must be secured by Italy's constitution. It remains to be seen how this conflict can be resolved.

Berlusconi, in a statement, accused the courts of judicial persecution "that continues for 20 years and is revived every time there are particularly complex moments in the political life of the country."

He said he expects convictions in his pending Milan trials: an appeal to his October conviction on a tax fraud charge and the sensational sex-for-hire trial that accuses him of having paid for sex with an under-age teen and using his influence to cover it up.

Berlusconi's brother, Paolo Berlusconi, was convicted of the same charge and sentenced to two years and three months. Paolo Berlusconi is publisher of the Milan newspaper il Giornale, which published the transcript of the conversation.

Silvio Berlusconi's defense team and political allies accused the court of seeking a speedy verdict for political impact.

"It is always more clear that there is an attempt to eliminate Silvio Berlusconi by judicial means, having failed by electoral or democratic measures," said Angelino Alfano, the head of Belursconi's People of Freedom party.

The charge relates to the 2005 publication of a wiretapped call that was part of an investigation into the Unipol financial services company's bid to take over the Banca Nazionale del Lavoro. The bid was later blocked by Italy's central bank, contributing to the forced resignation of then-Bank of Italy chief Antonio Fazio — and led to a series of trials that saw Fazio and others convicted.

Wiretapped conversations are widely published in Italian media, despite the risks of prosecution.

In a potentially more damaging case, the verdict is also nearing in Berlusconi's appeals trial on a conviction of tax fraud in the purchase of rights to broadcast Hollywood films on Berlusconi's Mediaset network. Prosecutors have demanded the court uphold the conviction and four-year sentence. They also are seeking a five-year ban from public office.

Berlusconi also is on trial in Milan for allegedly paying a Moroccan teen for sex during his now-infamous Bunga Bunga parties, with a verdict likely this month.

Prosecutors in Naples are investigating him for corruption for allegedly paying an opposition lawmaker €3 million ($3.9 million) to join his party, a move that significantly weakened the previous center-left government of Romano Prodi.
Thousands of Struggling Italian Firms Hang on Edge

GUIDONIA, ITALY — Emanuele Tedeschi wiped sawdust from his hands and gestured around the cavernous woodworking factory that has been in his family for two generations. The big machines, which used to run overtime carving custom furnishings for private homes, Roman palazzi and even the Vatican, sat idle on a shop floor nearly devoid of workers. “A year and a half ago, the noise from production was so loud that you had to shout to be heard,” said Mr. Tedeschi, walking amid pallets of cherry and other fine woods stacked up and waiting for a purpose.  Since a government austerity plan designed to shield Italy from Europe’s debt crisis took hold last year, the economy has tumbled into one of worst recessions of any euro zone country, and Mr. Tedeschi’s orders have all but dried up. His company, Temeca, is still in business. For now. But among Italy’s estimated six million companies, businesses of all sizes have been going belly up at the rate of 1,000 a day over the last year, especially among the small and midsize companies that represent the backbone of Italy’s €1.5 trillion, or $2 trillion, economy.

Two-thirds of Italians oppose returning to ballot box
13 Mar 2013
ROME (Reuters) - Two-thirds of Italians oppose returning to the ballot boxes after last month's national election left the country in limbo with no political force holding enough seats to form a government, according to a poll published on Wednesday. The center-left coalition led by Pier Luigi Bersani won control of the lower house, but not the Senate in the February 24-25 vote. Both are needed to govern. Bersani has since made repeated overtures to the anti-establishment 5-Star Movement for support in the Senate, all of which have been rejected by the bloc's leader, comic Beppe Grillo, raising the specter of a snap vote.

Half of Italians said the best solution for the current gridlock would be a government led by Bersani and backed by the 5-Star Movement, an IPR Marketing poll said. A third of respondents said another technocrat government like the one that caretaker Prime Minister Mario Monti has led since November 2011 would be the best way to avoid an immediate election, the poll showed. A technocrat government would require right-left support in parliament, and would presumably exclude the 5-Star Movement.

Italian Parliament elects center-left leaders
16 Mar 2013
Italian lawmakers on Saturday elected center-left leaders for both chambers of Parliament, paving the way for difficult talks to form a new government to get started.
Normally a routine procedure for a new Parliament, filling the positions required four rounds of voting in both the lower house and the Senate, highlighting Italy's political gridlock following February elections that gave no party a clear victory.

Italy forms new government after 2-month stalemate
4/27/13 — Center-left leader Enrico Letta forged a new Italian government Saturday in a coalition with former Premier Silvio Berlusconi's conservatives, an unusual alliance of bitter rivals that broke a two-month political stalemate from inconclusive elections in the recession-mired country.
The daunting achievement was pulled off by Letta, who will be sworn in as premier along with the new Cabinet on Sunday at the presidential Quirinal Palace.

Letta, 46, is a moderate with a reputation as a political bridge-builder. He is also the nephew Berlusconi's longtime adviser, Gianni Letta, a relationship seen as smoothing over often nasty interaction between the two main coalition partners.
Serving as deputy premier and interior minister will be Berlusconi's top political aide, Angelino Alfano. He is a former justice minister who was the architect of legislation that critics say was tailor-made to help media mogul Berlusconi in his many judicial woes.

Well, looks like it didn't take them long to get this dog and pony show over - we'll see the fruits of their Hegelian Dialectic they played out

Tens of thousands march in Rome against unemployment
23 Jun 2013

* Italian unemployment at record high
* Union chiefs attack Letta government for lack of action
* Government to present package to create jobs for young

Thousands of workers and unemployed people marched in Rome on Saturday to protest against record unemployment and call on Enrico Letta's two-month-old government to deliver more than empty rhetoric on the issue.
The rally, organised by the country's three largest union confederations, CGIL, CISL and UIL, was the first major protest since Letta's broad, left-right coalition took office following an inconclusive election in February.

Italian unemployment hit 12 percent in April, the highest level on record, and joblessness among people under 24 is at an all-time high above 40 percent.
Union chiefs, speaking before a flag-waving crowd estimated at more than 100,000 by the organisers, criticised Letta for what they called a lack of action on an urgent problem.

ITALY bus plunges off highway
July 29, 2013
 Italian bus crash kills 38 after plunging off viaduct, Italys worst road accident for decades.
38 people were killed and 10 injured when a bus plunged off a viaduct in southern Italy.
A tour bus filled with Italians plunged off a highway into a ravine in southern Italy on Sunday night after it had smashed into several cars that were slowed by heavy traffic.
Many children were among the 50 people on board.

Flashing signs outside Naples had warned of slowed traffic ahead before the crash occurred.
The bus driver lost control of his vehicle. (or was going too fast not paying attention.)
11 people were hospitalized with injuries, two of them in very critical condition.


Accidents in Europe summer 2013

Train in Spain derails killing dozens
July 24, 2013 - 79 people were killed

Switzerland -  2 trains collide
July 30, 2013
Driver dead, 35 people were injured, 5 seriously, when 2 trains collided head-on in western Switzerland. Forum Index -> World NEWS Page 1, 2  Next
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