It's not even a full fortnight since the glorious result of the EU Referendum and already the World is a brighter, happier much more cheerful a place then many would've dared to imagine as Polling stations closed at 10pm on Thursday 23 June. #Brexit finds us amid the fratricidal ideologically driven mutual carnage both within Conservative and Labour parties, as well as a mob of superannuated former undergrads with right-on views playing at Sedition and wanting to overthrow constitutional governance in the UK. The self-styled " 48% " ,all dressed down to mingle with ordinary folk as is the custom among the privileged metropolitan-domiciled,Oxbridge educated elite;they want to riot vicariously and posture loudly and articulately that they're hard done to.One or two stalking horses from Tory & Labour are despatched to do stand up demagogue routines on their rostrums. They spout a gutless version of actual Sedition and claim the role of martyrs for the cause; the cause they steered unerringly onto the rocks and to inexorable abject defeat. But the piece de resistance, is the reignited banking crisis about to take down the entire Italian economy. Here's what " Zero Hedge " reports; I just love it when Corporate Capitalist Money men talk explicitly. Here's the unexpurgated cert:18 original.
With all eyes distratcted by the post-Brexit euphoria, the last week has seen a far more existential crisis accelerating in Europe. Italy's banking system is in tatters (from a EUR40bn bailout 6 days ago, to EUR150 emergency support 3 days ago, to a bank bailout and chatter of further support from pension funds Friday) but, in what seems like a clear admission that things are really bad, The FT reports that Italian prime minister Matteo Renzi is prepared to defy the EU and unilaterally pump billions of euros into its troubled banking system if it comes under severe systemic distress, a last-resort move that would smash through the bloc’s nascent regime for handling ailing banks.
As we noted previously, Brexit will be just the scapegoat used by Renzi and Italy to circumvent any specific eurozone prohibitions. And if it fails, all Renzi has to do is hint at a referendum of his own. Then watch as Merkel scrambles to allow Italy to do whatever it wants, just to avoid the humiliation of a potential "Italeave."
And sure enough, as The FT reports, Matteo Renzi, the Italian prime minister, is determined to intervene with public funds if necessary despite warnings from Brussels and Berlin over the need to respect rules that make creditors rather than taxpayers fund bank rescues, according to several officials and bankers familiar with their plans.
The threat has raised alarm among Europe’s regulators, who fear such a brazen intervention would devastate the credibility of the union’s newly implemented banking rule book during its first real test. In the race to find workable solutions, Margrethe Vestager, the EU’s competition chief, has laid out options for Rome to address its banking problems without breaking the bail-in principles of Europe’s banking union.
Italy is the eurozone’s biggest vulnerability following the shock outcome of the UK vote to leave the EU, with bank stocks plunging by a third. Concerns are building before the outcome of bank stress test results due this month and a constitutional referendum in Italy in early October, on which Mr Renzi has wagered his job. Citi has described the referendum as “probably the single biggest risk on the European political landscape this year outside the UK”.
After several of its ideas on intervention were rebuffed, Rome is considering whether to act alone. “We are willing to do whatever is necessary [to defend the banks], and do not rule out acting unilaterally, although that would only be as a last resort,” said one person familiar with the government’s thinking. European officials fear any Italian intervention would carry high risks, opening a battle over illegal state support that would put off private investors.
Angela Merkel, German chancellor , last week rebuffed Italy’s request for a suspension of state aid and bail-in rules in order to recapitalise its banks. Benoit Coeure, a senior European Central Bank official, has said any suspension of bail-in rules would spell the end of the banking union “as we know it”.
Mr Renzi has bristled at suggestions he is ignoring rules, saying he will not be “lectured by the school teacher”.
And #Brexit won! and the reverberations will go on and on and on and it might incentivise our next dumb P.M to get the hell on with it and invoke Article 50 of the Lisbon Treaty. Who knows, I couldn't care less ,we won the Big One!
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