Friday, 26 September 2014

President Giorgio Napolitano 'helping with enquiries'

As Italy's economic and political disaster takes form - a new dawn has broken, yes it has (to borrow an image) - the Head of State, Giorgio Napolitano is summoned by the magistrates of Palermo to give evidence in the processo per la trattativa tra Stato e mafia [the trial of negotiations between the State and the Mafia]It is unprecedented in Italy for a sitting head of state to be questioned even, as here, as a witness, in any judicial proceedings, never mind judicial proceedings of this order.

There being no provision for such an event in the Constitution, the magistrates will go to the Quirinale rather than requiring the nearly 90 year-old President of the Republic to go to them.  After all, Blair  helped the police with their enquiries in Downing Street when the unthinkable happened in the United Kingdom, although the Italian version is more like Elizabeth II being questioned as a witness than the questioning of a mere prime minister.

Meanwhile the Fourth Estate in the form of the Corriere della Sera - Italy's paper of record - publishes an editorial of such notable aggression and spite against the Renzi government  (and this in the middle of Italy's 6-month presidency of the European Union) that Christ driving out the Pharisees from the Temple comes to mind as a measure of what has happened to Roman power circles.  It seems that a bunch of incompetent, inexperienced, unforgivably young Florentines, unaware of the realities of power, have taken over the rightful offices and positions of the salons of Rome and (to a lesser extent) Milan.  Masonic corruption is hinted (after all, the P2 kept its records only 50 kms from Florence, ooooh), Tiziano Renzi (the prime minister's father) is suddenly under investigation, while his son observes mildly from the UN that it would be difficult to get further from free masonry than he and his family are (boy scouts, yes, Liccio Gelli, no).

Matteo Renzi himself stands accused of being young, with that Tuscan facility of speech that is of itself suspect, and being leader of both Executive and Party; and so extremely popular (evidently a drawback).   Worse, he won't put up with the Troika-isation of Italy by the EU.  Which brings the Presidency of the Republic, particularly in view of the questioning, into consideration.

Even Napolitano can't manage a third go.  He should have gone at the end of his term not stayed for a second in such an iffy manner,  so as to foist the awful Enrico Letta on the country.  The choice of the next President of the Republic is upon us with Renzi in power - what horror.  For the European Union and particularly the Eurozone, Italy cannot be seen to be treated like Greece, Cyprus, Spain, Ireland - it's much to big and founder-memberish.  To put Italy under EU discipline the best thing would be to move Mario Draghi from the ECB into the Quirinale.  As President of the Republic he can save the Euro better from there than from any other position; after all, now that the line the ECB will take, is already taking, is settled, Germany can provide a suitable executor. 

Renzi isn't having that either.  He (and we, the people, that is) see no reason why Italy should be reduced to penury for the sake of neo-liberal economic orthodoxy pretending to be a 'peace-loving' European Union.   Italian national debt stands at 136% of this year's GDP.  The growth rate has been negative for the last three quarters.  Unemployment stands at 42% of people 18-24. A start has been made on paying government debt to enterprises.  Yet the most pernicious aspect of the economic situation is the resistance to any reduction in the returns to the entrenched political classes at any and all levels,  Still, at least we can now hear their pain    

Tuesday, 2 September 2014

Ukraine: the risks of transition

Ukraine misrepresentations and lies, coupled with ignorance are fuelling  widespread displays of media propaganda.  There exists a factual skeleton that cannot be propagandized away though.

It is not in Ukraine or Russia's interest to partition the country.

The Kiev government has lost control of eastern and southern Ukraine.

Calling parliamentary elections in Kiev when so much of the country, with millions of voters,  is no longer governed from Kiev, is a democratic farce.

The current Kiev caretaker government  is widely regarded as Fascist by many and, in some parts of Ukraine, the majority of voters.  Any attempt to validate the agreement with the European Union by the current Kiev government will be regarded as illegitimate by much of the population.  And by Russia.

The response to this has so far been disastrous.  At least 2000 people have been killed.   The EBRD has produced a worst-case scenario in which the sanctions implemented and threatened against Russia will precipitate a Russian recession and bring growth to a halt in the area; there will be serious contagion throughout the global economy and, first, for Europe.

All European former socialist economies have distinctive features arising from their soviet-type starting model.  Escorting them and assisting them through transition is now a well-understood process, if hotly contested by those who want to punish the former socialist errors (and socialists), and those who seek to provide the best route to an economically and politically successful society.

Such a society would not  conform to the hyper-liberal, crony capitalism so beloved of the corrupt of all capitalist economies (sadly only too well-represented in some of the already 'transited' states that fought back to create a more balanced and indeed moral, as well as efficient,  economic and political system and thus largely completed the transition). 

Abolishing or reducing to a minimum the role of the state in transiting economies is not clever.  Market institutions must be created, there must be investment in modern infrastructures (just consider the backwardness of the highly inefficient energy consumption levels of Ukraine industries), market regulation must be a state function, and for any reasonable person there must be great importance given to the provision of employment, the alleviation of poverty, and the assurance of social peace.

Russia will not accept Ukraine (or any other near-abroad state) practising the politico-economic aggression of hyper-liberal, crony capitalism.  In the interests of its defence requirements it has formally annexed the Crimea.  Informally, bluntly, it has annexed also Ukraine as a whole, rejecting the kind of development that will lead to  an unstable and inegalitarian capitalist free-for-all.

Central Europe - Austria, Germany, Hungary, Poland, The Czech Republic - really doesn't need this pseudo Europe of the UK, US, and Baltic peripherals, trying to put tanks on Russia's lawn.