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The Retreat

From Beppe Grillo's blog: Italy's most watched !


"In Europe the siren has been triggered and it’s saying "Each for himself and the euro for everyone". The continual manoeuvres, institutional meetings, European summits, new elections and removal of prime ministers that have been happening in recent years, have had a primary, and undeclared aim: to reduce the risk of France and Germany in relation to the countries that are in debt. Thus in relation to Greece, Spain, Italy, Portugal and Ireland: the PIGS. If it should happen that Italy or Spain were to default then the whole European economic system could in fact collapse. Even tiny Greece, with a GDP that is 3% of that of the whole of the EU, has put the stability of French banks at risk. Banks and foreign investors have sold off at any price the bonds of the PIGS and these have been bought by the banks of the PIGS thanks to a loan from the ECB to the banks to the value of a thousand billion euro. The debt is returning to the country that is owed the money while foreign investments in the PIGS are drying up. Since the financial crisis of 2008, the German banks have reduced their exposure to the PIGS by 301 billion and the French banks by 204 billion. Thus France and Germany are stuck at a crossroads. Germany has reduced its exposure to the Mediterranean countries and Ireland by 49.7% and France has reduced its exposure by 33.4%. In two years time, the risk due to the PIGS (and consequently due to the euro), will be down to zero. Perhaps, then their interest in keeping the so-called “single currency”, (“so-called” since it has been adopted only by certain European countries), will decrease. The exposure to PIGS for France and Germany has gone down by about 45 billion in relation to Greece, by 170 in relation to Italy, 153 in relation to Spain, 19.5 in relation to Portugal, and 119 in relation to Ireland. Doubtless this is good work, but it has happened while there has been recession in the PIGS that are sinking with higher unemployment and the closure of companies. The phenomenon of the selling off of PIGS bonds is accelerating. Just last year, about 10% of public bonds in circulation in Italy and Spain were sold by foreign banks and bought back by Italian and Spanish banks. Another loan of 1,000 billion euro from the ECB to the banks of the PIGS, (largely financed by the PIGS themselves!), and the problem will be solved. Euro or not euro!"

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