Wednesday, 26 June 2013

Alla Deriva

At the end of the last century derivatives were used by  national Europhiliacs to bring the ratio of deficit to GDP below 3% in Italy.  This was known quite widely then, and since as a practice used by others (Greece for example) and shrugged off in the over-riding interest of setting up the currency union as a mechanism for driving ever-closer European Union.

Unfortunately some of these contracts dating back to the 1990s were renegotiated last year   which once again brought them to wider attention when the renegotiated contracts attracted losses of 8 billion euros - not good considering the state of Italian public debt. 

Much worse, however, is that La Repubblica  writes that Italian total derivatives exposure is of the order of 160 billion euros; this, at the same rate of loss, would involve an additional 32 billion euros. The scale of irresponsibility is such that we are running out of directions in which to look where nothing disastrous is happening: political, institutional, economic, ethical, all areas are desolations.  

1 comment:

dearieme said...

There's a deal o' ruin in a nation.