Italy is compelled to generate 23 Billion by increasing taxes

This week Italy's Interior Minister, Mr. Salvini, is calling for early elections, while other parties are afraid of going to go to elections and loosing influence. From a political point of view, it is not time for elections in Italy, as the country needs to do an agreement with the EU and rebuild its political agenda. But it is also true that if a new government is not formed, Italian Parliament will be likely dissolved.  

The mainly problem of this political crisis is that many companies and strong economic powers, which have always backed Mr. Salvini from North-East Italy, now claim to be better heard from the government. Salvini's economic idea  is for growth of national product and measures which should encourage enterprises' productivity. But this couldn't be done without solving the problem at the moment of Italy's public debt, which is double than Germany and one fourth higher than France. Italy travels around 132% in terms of public debt/GDP ratio, and Salvini said this is not a problem. 

Salvini is the typical strong man that far right movements would like to see in power. Unfortunately, he is backed by economic powers which are interested in Federalism and Flat tax, and the Italian Prime Minister, Mr. Conte disagrees with these two points just mentioned. Flat tax means more money to the 10% richer and less money to the public budget. Consequently, Italian people would get less public services, such as healthcare, education, public transport, ect.  

Meanwhile, in order to comply with EU's deficit rules, Italy has vowed to the European Commission that it will be generating € 23 Billion by increasing sales taxes from the start of next year. There are no doubts that Italy needs a new stable government with the aim of helping to raise economic growth rate, create more jobs, and decrease public debt.

Protecting business with Iran

Since the US began to increase pressure on Iran, we have heard that the Rouhani regime has been passing  3.67% uranium stockpile limit permitted by 2015 nuclear deal. It is a very low level, which proves that Iran is not working on a nuclear weapon.

In this context, while the US is still imposing severe sanctions against Teheran, the Europeans should allow their companies to make business with Iran. Companies that want to import oil from Iran they have to be protected from the US.

According to international law, America can't interfere in the internal Europeans affairs, telling them who they can trade with, and who they cannot trade with. In addition, some calculations show that European economy is larger than US economy, and the European population is larger than US population. Consequently,  the EU has leverage on the Americans.

Meanwhile, after British Royal Marines had seized an Iranian oil tanker near Gibraltar, Iranian boats tried to impede a British oil tanker near the perilous strait of Hormuz.

Although the tension in the region is rising by the day, the US, UK and Iran say they don't want to escalate conflict.

Sea-Watch 3

On July 3rd an Italian Judicial Court rejected the validation of Carola Rackete’s arrest, declaring she acted out of an obligation to save migrants. The judge disputed the crime resistance to public officials was justified “in a performance of a duty to save lives at sea”.

Consequently, since July 3rd vessels’ commanders of the NGO involved in human trafficking, who pretend to help people, may feel free of an obbligation while they will perform illegal migrants smuggling through the Italian territorial sea. So Europeans, who are interested in prostitution and illegal low wage employment in agricultural sector, can continue to steal human resources from the African continent. Actually, the Italian magistrates aren’t able to find evidence about the relationship between rescue vessels and people who exploit human trafficking. As it is known, on June 14 the NGO vessel “Sea-Watch 3” refused to take rescued migrants to the Libya’s capital, after it “had saved” migrants next to the Libyan territorial see. The Dutch rescue vessel asked for a port and obtained it in Tripoli. “Sea-Watch”  said Tripoli is not a safe port. 

While the Italian judge was stating that the German captain of the rescue charity ship had not broken the law, at least 44 migrants and refugees were killed by an air raid on a detention centre in the Eastern side of Tripoli.  Although there is no evidence yet, it seems there is a combination between the two events. Since July 3rd rescue vessels must not go back to Tripoli,  as it is no safe for migrants, because of the air raid. The military attack involving aircraft was conducted by Egypt and UAE, who delivered bombs purchased by France’s government on Tripoli's suburbs. Since 2011 France has been responsible of civil war in Libya, which caused illegal migrants smuggling and human trafficking. France's government decided to start a military operation against Libya, which  caused very serious damages, not to mention of humanitarian aspects. European people today is totally divided on the existing interests of France and Germany, as European politics has been too far from people and too close to finance and human trafficking. That's why people in the UK decided to leave the EU when they voted the 2016 Brexit referendum. Actually, there are criminals at global level who want to continue to steal human resources from the African continent.

To summarize, at the moment NGOs and smugglers may ship thousands of migrants towards Italy, under the pretext of rescuing, because Italian judge stated  “Sea-Watch 3” captain, Carola Rackete, didn’t break the law when she sailed through the Italian territorial sea and docked her migrants rescue vessel on the Island of Lampedusa without permission".

Still human trafficking

After the Dutch vessel "Sea-Watch" had been seized by Italian authorities, because of illegal immigration and human trafficking, its German commander, Carola Rackete,  was  defined as another communist with a lot of money.  Actually, Ms. Rackete, who is also a  veteran of a German NGO, is looking for the opportunity of being admired. She's looking for popularity. In addition, she is backed by criminals at a global level, people who are interested in business related to illegal immigration. 

If Ms. Rackete really wanted to help people, she would go to Africa. I know Italian volunteers who have been building orthopedic centers in Madagascar and sewage systems in Uganda. That's what some African countries need. We haven't to steel their human resources.  And those unscrupulous people who exploit any opportunity to steal human resources from Africa present them selves as communist, socialist or democrat.    

With the aim of trying to stop human trafficking through the Mediterranean sea, Italian Parliament recently adopted a decree pledging fines up to 50,000 Euros for captain and owner who take vessels in Italy without authorisation. The decree was criticised by the United Nations, which called sea rescue a "humanitarian imperative".

As we have seen, policy makers who want to stop human trafficking are defined as populists, and sometimes as fascists by the media establishment.  I hope people began to understand who are really fascists. it's time to understand who really are criminals in our country and in the EU.

Russian-Chinese cooperation

Since the US has begun its trade war on various fronts, including custom duties imposed by Trump's Administration, China and Russia have been trying to strenghten their ties. The leaders of two bigger Eurasian powers say their countries are closer than ever been.

Actually, Russia is considered by Beijing's Government as a source of energy, and Chinese activity in Russia's infrastructures project is on the rise. In addition, the two countries are close allied on many global issues including Syria, North Korea and Iran.    

In this perspective, the Russian-Chinese closer relationship is not just about economic and business cooperation, it is also a reaction tho the attemp by Washington to weaken both China and Russia as geopolitical competitors. From 11 to 17 September 2018 we saw the biggest military exercise between China, Russia and Mongolia througout the Siberian plateau and Russia's Far East.

It seems that new economic centers have emerged and the balance of power has been shifting: since 2001 Russia and China have been leading a security economic and political alliance, the Shangai Cooperation Organization (SCO), which has eight member States and represents 40 % of global population (20 % of global GDP).  

Obviously, the functions of the International Financial Organization and the role of the US Dollar may be changed. The EU has already put in place a new special payment system to help facilitate non-dollar trade with Iran. And with regards to Iran, the two Eurasian superpowers have just expressed concern in strong statements over a military confrontation in the perilous strait of Hormuz. Russia and China disagree with US's practice of extreme and provocative pressure  on Iran. Their ultimate goal is to push the US out of the Asian and Indo-Pacific areas. 

EU is going to be among two or maybe three giants

In the middle of this century the world is going to have two o three giants, such as America, China or India, because they are large population countries, huge economy and huge military power. As argued some years ago by the British former Prime Minister, Tony Blair, these super powers are going to be much bigger and  more powerful than other smaller countries such as Brazil, Indonesia or South Africa. They are large population countries but not nearly as large as China or India. From a geopolitical point of view they are considered medium-sized countries.

In this world, if the medium-sized countries aren't banding togheter, the super powers above mentioned are going to sit on them. So if medium-sized countries were to join togheter, they would have some influence. But separately they are not going to be strong enough. Unfortunately, it's just a fact.

By saying that, we are not diminishing countries which are smaller than China or US. When countries like Germany, Spain or France are banding togheter in the EU, they are with a group of others. Consequently, they become able to operate as strong collective. 

In this contest, each European country is part of the EU, which is the biggest political union in the world. How can we think that Britain or Italy are going to gain by giving up that relationship? Tony Blair defined it as an umbelievable act of self-denial.

In a globalised world economy as above mentioned, how can British and Italian people think to go it alone? As soon as Britain leaves the EU, people in the UK will have no choice but to follow US policy, everywhere. Not to mention of loss of credibility and sovereignity.

The Single Market is vital to Scottish companies

Since June 2016 most Irish people have been thinking what happens if Scotland remains in the EU by leaving the UK. Like Scotland, the majority in Northern Ireland voted to remain in the EU. Not surprisingly, Northern Ireland may become an independent state of the EU in its own right, considering that its territory is larger than some existing EU members states, such as Luxembourg and Malta. 
With regards to Scotland, three out of four its international trading markets are in the EU (Germany, France, Netherlands, etc.). On June 23, 2016, Scotland voted "Remain" by 62% to 38%, while 55.8 in Northern Ireland voted to stay in the E.U. and 44.2 % "Leave". People who live in those peripheral countries of the UK disagree with the exit from the custom union, as traders fear Brexit will see Scotland and Northern Ireland lose access to the EU Single Market.

With food and drink exports reaching £ 5 billion, Scotland's products are in demand in the world over. As a matter of fact, Scotland is the third largest producer of farmed salmon in the world. Scotch whisky accounts for almost 80% of Scotland's food and beverages export market, not to mention Scottish sales of oil, gas and refined products to the rest of the world.

Scotland voted to stay in the UK in 2014, but against Brexit in 2016, and will probably be driven out of the EU against it will. Of course, most Scottish people think the European association of countries trading with each other without restrictions or tariffs is vital to Scottish economy. For this reason, Scotland should hold another referendum to leave the UK.

As already mentioned by many experts, as soon as the UK leave the EU, British economy will slow sharply, as the country will pay tariffs on goods and services it will export into the EU. For this reason, since June 2016 British business leaders have been afraid the UK will not be an attractive place to do business. According to figures, almost half of UK's exports are to the EU, therefore it's easy to know the impact of Brexit on the UK's economy. For instance, British car makers, who are the UK's biggest exporters, have warned that the UK's departure from the EU Single Market poses the "biggest threat in a generation".

European policy makers have been underlining that whoever decides to leave the European association of countries, which are trading with each other without restrictions or tariffs, cannot expect all obligations to be omitted while keeping its privileges. According to the domino theory, other Members States would follow the UK with the aim to leave the EU. Not surprisingly, things in the EU may get a little out of hand, considering that many anti-europeanism leaders face important elections in the course of this year. Meanwhile, after the House of Commons had rejected the withdrawal agreement, the European Council proposed a one-year flexible extension, with the aim to allow the UK to exit as soon as possible.  

New meaningful vote

On 12 March UK's lawmakers will vote a new meaningful vote: if Theresa May's deal were to pass, the UK would leave the EU with a deal.

On the contrary, if the new meaningful vote were to fail, MPs would vote on no deal on 13 March. And if, as expected, the UK parliament votes against leaving the EU without a deal, then there would be a third vote on whether to have a short delay to Brexit. Probably about three months. 

In this perspective, Labour  MPs want a new referendum, and other politicians in the UK think the same.

Chinese President Xi Jinping visits Italy later this month

Italy's Government is negotiating a preliminary deal to become part of China's "Belt and Road" infrastructure plan. It would be a non-binding initial framework, which will be signed when Chinese President Xi Jinping visits Italy on 22 and 23 March.

With the aim to link China by sea and land with South Asia, Central Asia, Middle East, Africa and Europe, the "Belt and Road"  initiative will boost trade and investments through an infrastructure network on the lines of the old silk road.

Job seekers' allowances. Unemployment expected to fall in Italy

This month Italian lawmakers issued, for the first time, a law which provides for a social security benefit. It will help people who are out of work and are seeking jobs.
Economic development needs the strenght of aggregate demand, which consists of public expeditures, such as investments, and consumer spending. The latter is strictly related to the change in demand for goods and services, which may be the main result of a rise in wages, benefits,  etc.

The relationship between consumer spending and income has always been of interest in the history of economic thought. According to classical economists, the wealth of nations in 1700s was related to aristocracy consumers in luxury commodities, such as tea, coffee, silk, cotton, gold, sugar, and so on. On the contrary, Marxian economists asserted that liberal economy systems need inequality: the more consumers spending the more socio-economic inequality. The experience of 1900s socialist systems by countries around the world showed the social and economic effects of  low consumer spending. 

Nowadays Keynesian economists, who recognize the "dark side" of liberal economy, think that aggregate demand have to be increased through public spending in education, healthcare, infrastructure projects, and sewage systems. These policies are strictly related to the Welfare State, which may increase public debt.

As above mentioned, Italian lawmakers are trying to implement a policy based on unemployment benefits, considering that the rise of jobless rate generates spending decline and a need for liquidity.
Since the early 1970s, successful public programs of unemployment compensation and job seekers' allowances have been designed to offset income shocks in some Anglo-Saxon countries, such as the UK and the US. That's why those countries haven't seen huge consuption losses in the last thirty years, compared with South Europe countries. In Italy and Spain the Welfare State have failed to mitigate the consequences of important labor income shocks, like those arising from the rise of unemployed people.

In Italy, unemployment benefits and job seekers' allowances are guaranteed by the Article 38 of the Constitution. Although Italian Government is still defined as "populist" by the establishment of the EU, the new decree in the field of job seekers' allowance, which had been issued in Italy this month, may help young people to successfully move from education  to employment.