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So I think we should lay out the scenario explicitly, and see what our attitudes towards it are.

To me, Italy is a clear target for this anti-Euro talk. Because Italy's economy has been hit particularly hard by the German Euro, and alone among the major Euro economies, there is a major political party which has made a lot of hay on the Euro issue, which may well be in government soon.

So what is the Trump plan, insofar as there is one? Drive a wedge, sure. Encourage Italy to leave the Euro? What can they offer as enticement? From a trade point of view, what they want is for the EU to disintegrate, so that they can make leonine treaties with each member state. Getting Italy out of the EU seems a long shot. But driving the Euro up against the dollar, by picking off the weaker economies, is a probable Trump goal.

As we all know, re-balancing the euro area through fiscal transfers would fix the problem, and the frictions. This requires a change of government in Germany, but would a Schulz government be any better?

It is rightly acknowledged that people of faith have no monopoly of virtue - Queen Elizabeth II

by eurogreen on Sun Feb 5th, 2017 at 07:13:55 PM EST
[ Parent ]
Do we know of any Bannon Italy connection? Because otherwise I don't think Italy would show up on anyone's radar. But in general there would be very little they could do without the whole US government system being behind it. Well they could send tanks to Frankfurt I suppose. Otherwise they could offer Fed support if the Fed was game or financial backing if Congress is onboard. None of this seems like it would play well to a domestic audience. For the congress case the Brandon faction would first have to capture the media narrative and redeclare the EU to the USSR-west. The only foreign country you can just hand money over in the US under normal circumstances is Israel. The Fed route is a bit more plausible but seems only relevant for small countries like Greece. The idea is that you could refuse to clear transactions from new GreeceCB but you can't really do so if they go over the US payment system. Though the logistics of this seem more complex than what I would credit the Trumpkins with. So in conclusion I don't think they can do all that much.
by generic on Mon Feb 6th, 2017 at 09:11:20 AM EST
[ Parent ]
Europe might possibly be saved if the euro is trashed, Maastricht is rewritten, or the ECB were made transparent.
Unlike LePen, 5*MV is willing to threaten a referendum to exit the currency_in order to reform it -and junk austerity-_
And only if that doesn't make Germany rethink its beggar-my-neighbour attitude, then -and only then- stage 2, Italexit.
What Trump's doing is accelerating the EU's demise, as the quality of leadership, and the revolving door between lobbyists and parliamentarians have made the EU's unsustainability -as is- inevitable.
In some ways the sooner this happens the sooner we can build version 2.0, with the necessary precautions baked in to avoid the problems we suffer from currently.
Right now it's a logjam.


'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty
by melo (melometa4(at)gmail.com) on Tue Feb 7th, 2017 at 12:12:50 AM EST
[ Parent ]

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