Friday, September 16, 2016

George Friedman: Italy Is the Mother 
Of All Systemic Threats
George Friedman highlights the plight & the economic challenges of Italy, links this to the overall financial threat to the euro zone & to the world .. "Italy has been in a crisis for at least eight months, though mainstream media did not recognize it until July. This crisis has nothing to do with Brexit, although opponents of Brexit will claim it does. Even if Britain had voted to stay in the EU, the Italian crisis would still have been gathering speed. The high level of non-performing loans (NPLs) has been a problem since before Brexit. It is clear that there is nothing in the Italian economy that can reduce them. Only a dramatic improvement in the economy would make it possible to repay these loans. And Europe’s economy cannot improve drastically enough to help. We have been in crisis for quite a while .. The EU must address Italy’s and Germany’s problems, but its regulations make finding solutions very difficult .. This is most of all a political and administrative crisis. The European system was created to administer peace and prosperity, not to manage the complex gyrations of an economy. The argument from those who are against internationalism is simple. Sometimes the major international systems fail. The less entangled you are with these systems, the less damage you suffer. And since such systemic failures historically leads to political conflict and crisis, the case for nationalism increases – assuming you aren’t already trapped in the systemic crisis. In any event, increasing nationalism follows systemic failure like night follows day."
LINK HERE to the essay

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