O/T, Italy's Nuclear option

[TheBlackHorse]

...... in life, some people can be compared to salmon and guppies. Salmon tend to know where they’re going; guppies tend to feed aimlessly on scraps. Drillerpie is a guppy. Leaders tend to make decisions knowing, often at best, 80% of the facts. Dp probably wants all the facts and even then wouldn’t make a decision or come to a conclusion.
Italy was a corrupt state before the EU was invented. The EU simply enabled the further spread of its disgusting tentacles in business and those running the EU are either blind or complicit because they are powerless and/or lack the will to stop the corruption. The name of the EU game is always compromise and the corrupt know this. You cannot compromise with corruption; but those in power do because power corrupts absolutely.
So, we mustn’t shoot those nasty boat traffickers as they might take us to the Court of Human Rights. Instead, we’ll take the nice 1000Euro’s they so kindly offered and help them on their way.
At this point, dp asks for evidence of bribary. Dp, go forth ...

[AltyPie]

Interesting thread. I suppose one relevance to the EU is that as we all contribute, you’d want to know if one of your partners had a large %, relative to you, of working age population working in the black economy for obvious reasons.

I had a go at looking at some actual stats/links on this.

Link here : http://www.italianinsider.it/?q=node/4470
Says that 3.5 million Italians work in the black economy. I also found there’s about 38,800,000 Italians of working age – so that’s about 10% of the working age population in the black economy. It’s not exact I know, but let’s say that means about 10% of the actual Italian GDP is from the black economy as well.

This link from 2013 : http://www.telegraph.co.uk/finance/e...-says-IEA.html
Says that about 10% of the UK economy is from the black market.

This link (2014): http://www.dw.com/en/germanys-underg...row/a-17408836
Says in Germany the parallel economy will amount to about 12% GDP.

Based on this brief (and not very extensive) research it doesn’t look at first glance like any of the three countries, UK, Germany or Italy are very much worse than each other in terms of %GDP coming from the black economy.

[drillerpie]

The bail out would not have happened if they were not EU members, it was done to stabilise the Euro and prevent the monetary union from collapsing. Until this loan is repaid, are they net contributors in the true sense?

The same with, Portugal, Greece and ROI

This post proves Vlad hasn't the faintest idea what he is talking about and was trying to wing it.

He says the Italian govt's bailout of Italian banks wouldn't have happened if Italy wasn't in the EU (nonsense) and that there was some kind of loan from the EU to Italy which needs to be repaid, and as such Italy can't be considered a net contributor, even though it is one (also nonsense).

[drillerpie]

...... in life, some people can be compared to salmon and guppies. Salmon tend to know where they’re going; guppies tend to feed aimlessly on scraps. Drillerpie is a guppy. Leaders tend to make decisions knowing, often at best, 80% of the facts. Dp probably wants all the facts and even then wouldn’t make a decision or come to a conclusion.
Italy was a corrupt state before the EU was invented. The EU simply enabled the further spread of its disgusting tentacles in business and those running the EU are either blind or complicit because they are powerless and/or lack the will to stop the corruption. The name of the EU game is always compromise and the corrupt know this. You cannot compromise with corruption; but those in power do because power corrupts absolutely.
So, we mustn’t shoot those nasty boat traffickers as they might take us to the Court of Human Rights. Instead, we’ll take the nice 1000Euro’s they so kindly offered and help them on their way.
At this point, dp asks for evidence of bribary. Dp, go forth ...

I'm sure that sounded amazing in your head.

[tarquinbeech]

This post proves Vlad hasn't the faintest idea what he is talking about and was trying to wing it.

He says the Italian govt's bailout of Italian banks wouldn't have happened if Italy wasn't in the EU (nonsense) and that there was some kind of loan from the EU to Italy which needs to be repaid, and as such Italy can't be considered a net contributor, even though it is one (also nonsense).

Attached is a 13-page report explaining why Italy is pretty much a basket-case of Economic problems, that threatens to collapse the EU.

http://www.cer.eu/sites/default/file...CO_20dec16.pdf

The report is only 7 months old, full of graphs and plain-speak.....the first 2 charts alone show how unemployment is horrendous at 12%, GDP growth is only 0.5% over the last 22 YEARS and is worse than Greece's growth......I honestly didn't think there was an major EU contributor that could be in worse growth than Greece!

EU approval ratings now has Italy as the 3rd WORST country in the whole of the EU....only Greece and Czech Republic are considered "worse" risk countries.

There is a whole section on the Banking Sector which is known to be carrying 350 Billion in bad debts, with their assets set to be revalued by forthcoming new EU rules......several Italian banks have already been bailed out, and if many more continue to struggle then it could bring down the whole EU "pack of cards"

Banking extract - In the autumn of that year, the government rescued four
small banks (Banca Etruria, CaRiFe, CaRiChieti and Banca
Marche). In the process, the government had to wipe out
their shareholders and impose losses on (‘bail in’) junior
bondholders, many of whom were retail investors. There
were widespread protests, despite a fund to compensate
retail investors who had bought these bonds without
being properly informed about the risk.
The four small banks were just the tip of an iceberg,
however. Italian banks currently carry over €350 billion in
non-performing loans (NPLs). Even though the value of
NPLs seems to have stabilised and Italian banks have set
aside funds to cover losses, NPLs weigh on banks’ ability
to lend for three reasons. First, provisioning for losses and
managing NPLs reduces profits. Second, regulation forces
banks to fund NPLs with more of their own funds, leaving
less capital to fund new lending. Some banks, including
Intesa Sanpaolo, the country’s largest, have a strong
capital position, but others, such as Carige or Monte dei
Paschi di Siena (MPS), are substantially weaker. Third,
banks with large holdings of NPLs are perceived as riskier,
increasing their funding costs.

[tarquinbeech]

So what's the relevance to the original point? The EU didn't pay for the bail out so what did you bring it up for?

Driller - The EU imposes rules on member countries, so that they don't have to prop up failing countries (like Greece) when they get into an even bigger mess. This is effectively the Stability and Growth pact where countries cannot borrow beyond a certain %age of it's GDP

Certain countries like Germany and France can break the rules because they are too big to bully......Italy has now joined the "club" by bailing out it's banks with tax-payer's money and ECB loans....and the EU were complicit in turning a blind eye (two of the banks were sold for 1 Euro, but the true cost to the tax payer is 5 billion in cash plus 12 billion in "guarantees")

Those ECB loans include purchasing Italian Bonds......so actually the EU, via the ECB DID pay to bail-out Italian banks BTW.

So why do the EU allow these "bigger" countries to break the rules and prop up their failing political parties by borrowing yet more from the EU via QE?.....because they are frightened of political unrest and the further rise of the EuroSceptic parties.

They've already seen that the UK has told them to "do one", narrowly escaped a disaster in France despite the rise of Le Pen and now it has to placate Italian banking customers that were set to lose billions.

Basically it's **** the rules, elections are on the horizon and we need Jobs-for-the-Boys and Business-as-Usual.....kick the debt down the road, someone will pay for it all, one day.

[tarquinbeech]

Jesus Christ almighty. 25% of the working Italian population do not work on the black economy. There might be pockets of the south (ie below Rome) where that is true but nationally no way. It is simply untrue. I don't know what else I can say.

I still don't understand what that has got to do with the EU but it looks like you're going for an NCM first of logging on to comment on a thread and then spending the next ten posts refusing to defend your point of view.

Driller - Whilst it's not actually possible to work out the precise number of people working in the "Black Economy" for obvious reasons, it IS possible to work out the amount of VAT fraud involved, by country, in a league table simply by knowing the size of the GDP (goods and services) and the amount of VAT collected.

I'm sure that you're aware, being a reasonably educated person, that a report is published annually by the EU, in line with their regulatory and fiscal checks of member countries.

The "accepted" level of VAT fraud is around 10%, with the UK coming in at almost dead on 10% for 2013 and 2014.....Sweden were the clear "honesty" winners at 1%, Lux 3.8% and Finland 7%.

The out-and-out "cheats" were Romania 38%, Lithuania 36% and Malta 35%.......strangely enough both Greece and Italy were also rather naughty at 27% ie almost 3-times the level of the "norm" and actually ABOVE the level of Vlad's assessment of those working in the Black Economy.

Whether it proves his point is open to debate.....but it sure highlights the fact that both Italy and Greece have huge problems collecting taxes, a point often highlighted in various EU articles to be found online.

EU commission report here:
http://europa.eu/rapid/press-release_IP-16-2936_it.htm

The report is in Italian, but the pdf download - top right is in English with league tables

Edit - Italy's "missing" VAT of 37 Billion, is over 20% of the total missing monies in the whole of the EU, (160 Billion in 2014).....AND IS ACTUALLY THE LARGEST AMOUNT BY ANY SINGLE COUNTRY (France was 2nd on 24 Billion, Germany on 23 Billion and UK on 18 Billion) ......Scary huh?

[drillerpie]

Tarquin - a few specific points about this thread to start with:

Italy's low growth coincides with Berlusconi time in power. That's what happens when you spend all your time and effort making laws to keep yourself filthy rich and out of prison. Tax evasion didn't start with him but he certainly didn't help with that either, constantly showing tax evaders in a sympathetic light on his tv channels.

The UK is a major European contributor with slower growth than Greece.

You describe quantitative easing as a loan from the EU, but it isn't.

I'm not sure but I presume the rate of VAT fraud is calculated from registered transactions? If that's the case it's completely unrelated to the black economy which is by definition hidden.

I feel the need to point out that I commented on two specific things on this thread - the political orientations of the main Italian parties and the fact that 25% of Italian workers absolutely do not work cash in hand. I stand completely by what I wrote about these two points.

I have never said that tax evasion isn't a problem or that the Italian economy is in exemplary condition. Pointing out that it isn't doesn't make me wrong.

A couple of general points:

The Italian banking sector won't be allowed to go bust any more than the UK one was. Banks going bust means chaos and rightly or wrongly no major government will let it happen. The real problem is the way lending is (or isn't) regulated meaning a bank can be exposed for many many times more than its cash deposits.

Before we start feeling too superior to the Italians we should look at our huge private debt bubble.

[tarquinbeech]

Tarquin - a few specific points about this thread to start with:

Italy's low growth coincides with Berlusconi time in power. That's what happens when you spend all your time and effort making laws to keep yourself filthy rich and out of prison. Tax evasion didn't start with him but he certainly didn't help with that either, constantly showing tax evaders in a sympathetic light on his tv channels.

The UK is a major European contributor with slower growth than Greece.

You describe quantitative easing as a loan from the EU, but it isn't.

I'm not sure but I presume the rate of VAT fraud is calculated from registered transactions? If that's the case it's completely unrelated to the black economy which is by definition hidden.

I feel the need to point out that I commented on two specific things on this thread - the political orientations of the main Italian parties and the fact that 25% of Italian workers absolutely do not work cash in hand. I stand completely by what I wrote about these two points.

I have never said that tax evasion isn't a problem or that the Italian economy is in exemplary condition. Pointing out that it isn't doesn't make me wrong.

A couple of general points:

The Italian banking sector won't be allowed to go bust any more than the UK one was. Banks going bust means chaos and rightly or wrongly no major government will let it happen. The real problem is the way lending is (or isn't) regulated meaning a bank can be exposed for many many times more than its cash deposits.

Before we start feeling too superior to the Italians we should look at our huge private debt bubble.

Driller,

Point one - You appear to be saying that the Italian tax evasion is there, and it's linked to the fact that their PM is a crook.....so along with the EU's own assessment of 27% tax evasion of VAT.....we appear to be in agreement, but you're not happy with the figure of 25% Black Economy (which by definition, can never be proved)

Point two - No idea why you are comparing the UK with Greece?

Point three - The ECB is the arm of the EU that regulates the strength of the Euro. One of it's stated methods is using QE to print money and buy Government Bonds in struggling EU countries......therefore if the Italians lob 20 Billion at their struggling banks, THEN REFUSE TO COLLECT TAXES, it is ultimately the ECB/EU that is picking up the tab......there are various articles online explaining the con.....type in "Italian Banks, too small to fail"

Point four - VAT fraud is NOT unrelated to the Black Economy......if the EU know that Italy had net imports of 20,000 air-con units that "disappeared" into the system without net VAT receipts, then someone had to fit them (my son works in the air-con industry).
Each unit has a re-sale value PLUS a labour charge for fitting and servicing which attracts VAT......the same with satellite systems, solar roofing etc etc etc.......so if 27% of vat-able "stuff" is going missing, by the EU's own on-line assessment.....there is a phenomenal amount of people working cash-in-hand.
That's why the EU have reprimanded the Italians.

Point five - Agreed, the repeal of Glass-Steagall was the start ..............and Labour's handling of the 2008 Banking Crisis was a disgrace IMO

Point six - Reports this week are that Private Debt is getting worse, not better.....I'm buying Silver.....if we get another major crash, FIAT currency will be worthless.

[Old_pie]

Driller,

Point one - You appear to be saying that the Italian tax evasion is there, and it's linked to the fact that their PM is a crook.....so along with the EU's own assessment of 27% tax evasion of VAT.....we appear to be in agreement, but you're not happy with the figure of 25% Black Economy (which by definition, can never be proved)

I don't know if Wedgie can confirm this but at least in certain parts of the South of Italy everyone is fed up with austerity and there is an increase in regular shops and businesses doing a "part cash" payment so that a lower receipt can be issued and this is done with the support of the population at large. Whether this is on top of or part of the figures you mention is anyone's guess.