Over this weekend, Italy will vote on a referendum that, if passed, will give the government sweeping powers to enact radical change. According to the latest polls, the referendum is expected to fail — which might then pave the way for the nationalist Five Star Movement party to form a government — who literally hate the EU.
Similar to what we experienced here with Trump v Clinton, Italian liberals are out in force — demonizing the right wingers who will vote against the referendum, calling them ‘Trumpistis” — accusing them of spreading pro-Russian fake news.
Sound familiar?
source: NY Times/Fortune
“A protracted period of political uncertainty after a ‘No’ vote could exacerbate the Italian banking issues, unsettle the Italian bond market, and weigh on business and consumer confidence,” says Holger Schmieding, chief economist with Behrenberg Bank in Berlin.
The populist and unpredictable ‘5 Stars Movement,’ as well as the anti-euro Lega Norde of Matteo Salvini, are waiting to exploit any failure of Renzi. As such, says Schmieding, “a political crisis could open up a bigger can of worms in Italy than it would elsewhere.” And that is never good for economic growth.
Some argue this vote could be even bigger than the BREXIT vote, because of the fact that Italy has so much debt and is wholly dependent upon Germany and the ECB to keep them afloat. If the referendum fails and Italy moves to exit the EU, it’s widely expected that the entirety of the Italian banking system, with some of the worst performing stocks in the world in 2016, will collapse amidst a gigantic plume of clown dust — tossing the Germans off the side of the boat to figure out all of their losses in solitude — entirely bedraggled with ruinous losses strewn out across their overleveraged banking system.
Ciao.
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“a gigantic cloud of clown dust” – Classic.
the picture of heath’s joker lighting that stack of cash on fire would be appropriate here.
Eat your peas
One has to assume Deutsche will be keeping a very close eye on this. I’m sure you’ve mentioned this before Dr. but I’ve come to believe the best way to short the EU is to short Deutsche.
Impossible to trust people that eat veal. Unless city dwellers who have never seen the process. Then again whatever.
Only if Renzi steps down will it blow up the banks- he doesn’t necessarily have to one way or another… but it is his word that he will recapitalize the banks, Unicredit and Monte dei Paschi… so it really relies on him staying in power… either way, the “no” vote is winning.
the most annoying form of good bye …
I thought u hated the word ‘ciao’
Perfect. Long overdue.
“Populists”
That’s what I wrote.
Where is this Italy you speak of?