A Brand New European Union Crisis Lurks Just Around the Bend — Italian Meatball Edition

Italians do not like to be subjugated, which is why, traditionally, they band together to shoot enemies in the face. With the rejection of the 5 star movement’s candidate for finance minister, Italy is now in a constitutional crisis — which may lead to elections, which may lead to a referendum on the EU.

It’s over EuroFAGS. It was only a matter of time before people got sick of your perverted schemes. Now it’s time to hang from the noose.

On Sunday, Italy’s president rejected the nomination of a eurosceptic, Paolo Savona, for the economics ministry by the far-right League and anti-establishment 5-Star Movement because Savona had previously said Italy should leave the euro zone.

But now the two parties, who were rivals in the March vote, are weighing whether to join forces ahead of a fresh election seen in the autumn or early next year.

“The upcoming elections will not be political, but instead a real and true referendum … between who wants Italy to be a free country and who wants it to be servile and enslaved,” League leader Matteo Salvini said on Monday.

“Today Italy is not free; it is occupied financially by Germans, French and eurocrats.”

The euro, bonds and stocks initially rallied on Monday after President Sergio Mattarella vetoed Savona’s nomination, but relief turned to fear over snap elections. The gap between Italian and German 10-year bond yields, a measure of Italian risk, widened to its highest in over four years.

“The election is going to resemble a referendum, de facto, on the European Union and the euro,” said Francesco Galietti, head of political risk consultancy Policy Sonar in Rome. “It’s an existential threat for the entire euro zone.”

If Italians were to cast a protest vote against the EU and euro at fresh elections, it would deliver the bloc’s biggest challenge since Britain voted to quit the union two years ago and raise questions about the future of the single currency.

The net result of all this chaos has been sharply lower equity prices, especially in periphery country — the PIGS. Portugal fell by 1.74% and Italy was lower by more than 2% — with heinous losses found amongst the banks. On the downside, Finecobank, Banca Generali, and Mediobanca led stocks lower with 6-7% drops.

In spite of all that shit, US futures are indicating more gains. The Nasdaq is +27, Dow +38. Over in Brazil, hellfire is being raised and their markets are lower by nearly 3% — thanks to some stupid truckers strike that has crippled the backward Amazonian nation.