By the world financial markets of course! Nor by the big three Credit Rating Agencies (Moody’s, Standard and Poor’s and Fitch). If Italy prefers not to cut its national debt, that’s her business and nobody else’s except perhaps Italian voters and taxpayers. Hey, what can I say that hasn’t already been said? Not much. Di Maio alternates between the tough guy act, which is out of character with his boyish looks and demeanor and disbelief (“I do not believe Italy will be “attacked” in September.”) The guy may be right as by most accounts the unloading of Italian bonds is expected to begin sooner rather than later. Already a major auction a few days ago of some 600 Million Italian BOT’s (short-term Bonds) went deserted. A no sale at current interest rates. The real question is why do Italian leaders of all persuasion repeatedly put themselves behind the eight ball of a huge national debt (of 2.3 Trillion Euro)? Consider that economics is not taught in the Italian public school system. In the end only “ragionieri” and “commercialisti” (book-keepers and accountants) study the subject matter and know something about macro and micro economics. And, since the Italian constitution does not require candidates for parliament to meet minimum standards of education relatively few Representatives and Senators have any clue either as to what economics is all about. A recent survey by Italian financial services established that the average Italian has little or no financial training, and possesses but rudimentary notions of how a market economy works. The average Italian used to keep what little money he managed to save in the bank or in Italian Bonds. So what you have here is very much like the proverbial “blind leading the blind”, at least on economic issues.
A question nobody in the media (mainstream or not) seems willing to ask point blank at guys like Di Maio or even more competent politicians like Tria, Girogetti or Savona is why? Why did this government that bills itself “of change” also fail – like all that have come and gone before it since the Republic was founded in 1947 – to immediately address and put foremost at the top of its Program a few clear measures aimed at cutting back the national debt? Why do they continue to dribble the issue? What keeps Italy’s “Government of Change” from announcing and taking steps to cut the national debt by at least 25 to 30 percent to avoid gouging Italian taxpayers with further tax hikes? For example, by selling a fraction of the Country’s huge gold reserves (third largest in the World) and / or by selling Government Assets, including some if not all of the Government’s Multinationals or Real Estate within the Public Domain.
Why do “they” insist on sending the wrong signals to investors the world over such as, waiting until the end of August to close the “ILVA” deal with the new ownership? Why do “they” insist on making world investors laugh after all has been said and (not) done to nationalize again the bankrupt Alitalia by somehow merging it with the Government’s Railroad holdings?
Do “they” think the Chinese are going to applaud such solutions and agree to buy Italian Bonds against vague Italian quid pro quo concessions in seaports and other infrastructure?
I remember how years ago people would smile (in admiration) at the incredible news of the discovery of isolated Japanese soldiers found still armed and entrenched in their pacific island dug-outs, unaware that Japan had lost the war and surrendered some twenty years before.
I doubt people will smile (at all) should the irreparable happen, when the incredible news leaks out that it all could have been avoided as late as August 2018, simply by reducing the national debt by 100 to 200 Billion Euros.
Like the Irish, the Italians consider themselves to be a “lucky” people. Let’s hope they are right.