Today's plan for the planning of the eventual plan says Berlusconi Offers to Quit if Euro Reforms Are Passed
Prime Minister Silvio Berlusconi of Italy offered a conditional resignation on Tuesday, agreeing to step down but only after Parliament passes an austerity package — before the country will go to early elections, government sources said on Tuesday evening.Bullsheet from Wolfgang Schaüble
Earlier in the day, the prime minister won a budget vote in Parliament but the tally showed he no longer had the support of the majority. While the opposition leader called on him to resign, Mr. Berlusconi wrote his options on a piece of paper captured by a news agency photographer. “Resignation” was one. He also wrote “eight traitors” about the lawmakers who failed to support him.
Mr. Berlusconi’s coalition received 308 votes in favor of passing the budget bill, but 321 lawmakers did not vote — a clear sign that “Mr. Berlusconi no longer has a majority,” said Pier Luigi Bersani, the leader of the opposition Democratic Party. He also called on the prime minister to immediately hand in his resignation to President Napolitano.
"The problem in Italy is not primarily the real data," Germany’s finance minister, Wolfgang Schaüble, said in Brussels on Tuesday. "The debt is high, the deficit is not — economic data are not that bad. The problem is a lack of trust from the financial markets and that of course is a realistic situation. And this trust has to be strengthened."
Italy may not have a huge deficit now, but it soon will and it still has to roll over as much debt as Germany, on an economy a third the size.
Italy and indeed all Europe not headed for recession, but rather already in recession. All of Europe is deteriorating rapidly. Austerity measures will exacerbate the problem for the the intermediate-term.
Reforms are needed, but where are they? Even if reforms come, it will take years not months to benefit the European economies. And just look at the problems getting those reforms. The reform story is the same in Italy, in Spain, in Portugal, in France as it is in Greece.
Schaüble's portrayal of these problems as a "lack of trust" is nonsense.
Schaüble cannot tell the symptom from the disease. The disease is structural uncompetitiveness coupled with a mountain of debt with no way to pay it back, and with every country fighting badly-needed reforms.
The "lack of trust" is not the disease. Rather "lack of trust" a sign the bond market has finally recognized the disease.
Once again the stock market and the bond market have a different perspective. Please see Italy's Bond Rollover Problem Dramatically Worsens; Yield Curve Inverts; 3-Year and 5-Year Bonds Yield Exceed 10-Year Yield for a bond market perspective.
Mike "Mish" Shedlock
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