Italy's populist budget

Since last week the EU has warned that Italy will end up worse off under the populist government's spending plan. It's easy to see that the EU establishment and its media system define "populist" all  Member states who disagree with their policy about immigration and unemployment. Actually, the new Italian goverment want to raise the public debt by 8.5 Billion, as the Prime Minister would like to introduce jobseeker's payments.  

As it is know, the UK, Germany, Ireland, and other UE countries, have introduced jobseeker's payments and unemployment allowances since very long time. And from 2011 to 2017, while the two previous Italian governments were raising public debt by 400 Billion, the EU and its establishment didn't say anything. The two governments were not defined as populist, and the EU agreed with their policy. On the contrary, after the EU Budget commissioner had said three months ago "financial market would show Italians how to vote",  Italy's "populist" budget began to draw concern from the UE. 

I can't understand who give them the right to say that to the Italian people.

 

Russia and China's war games.

From 11 to 13 September this year Russia and China conducted joint military live fire exercises in Siberian far East. It was the largest war game by Chinese and Russian troops since the 1991, considering that there were three thousand troops, thirtysix thousand tanks and army vehicles, and a thousand of planes and ships.

Russia and China's leaders say they will increase bilateral relations, as boost to ties were announced at Eastern Economic Forum in Vladivostok this month.

Since last decade the two giants have cooperated on various levels, as Moscow is looking to China as alternative Russian energy customer. In this perspective, in May 2015 the two world powers cooperated at a military level in the Mediterranean sea, where their interests coincide: China is interested in its gateway in Greece to distribute goods across central and eastern Europe, and Russia wants to protect its small naval port on the Syrian coast. Moreover, Russia gave a demonstration of power and influence in the Middle East. 

No deal is better than bad deal

London, Gracechurch Street

This week the Director of the International Monetary  Fund, Christine Lagarde, has warned of dire consequences if no deal is reached before 28 March 2018 between the UK and EU, as leaving the EU with no deal would be costly for the British economy. Actually, Mrs. Lagarde has said: "The larger the impediments to trade in the new relationship, the costlier it would be". She has pointed out a black picture if there is no-deal Brexit, considering the negative impact it could have on the UK in terms of "Shock to supply" of goods. In the case of  no-deal Brexit the EU is obliged under WTO rules to impose tariffs on goods which will be imported from the UK.

In 2016 British people would given the option to remain or to leave, but they didn't think how to leave the EU. It has become increasingly clear that people didn't know  what they were voting for, and some people now are regretting having voted the way they voted.   

Being part of the EU or not has been an issue into the UK's political framework for decades. In addition, it isn't easy to understand at this stage how pro-Europe or anti-Europe voices within the parliamentary majority are stronger this days. And while the government is still divided on this issue, EU leaders have warned UK that it can't cherry-pick aspects of membership.

In the meantime, the UK's Prime Minister, Theresa May, who has accused the EU of not treating the UK with respect, has said "No deal is better than bad deal". She knows there is not much time left until the deadline on 28 March next year.

No deal or bad deal

Most people who live in London think there is no consensus about how Britain leaves the EU. Actually, they are afraid of the impact on the public finance and private businesses related either to a "no deal", or a "bad deal" scenario.

In this perspective, the mayor of London, Sadiq Khan, has called for a new vote on membership of the EU, considering that the UK have to leave the EU on 29 March 2019. The Prime Minister, Theresa May, has said a second vote would be an action that betrays British democracy.

Actually, the clock wouldn't strike on 29 March 2019, if all 28 EU member states agreed about a 6-month estension of time.

Furthermore, if we see a "good deal" scenario, other member states, such as Ireland and Greece, will follow the UK out of the EU. 

Three Brexit scenarios

As it's  known, the UK is going to leave the  EU  on 29  March  2019, thanks to 52  percent  of  people  who  voted  in favour of leaving the common  market. And  if  the  UK  and  EU were not  to  reach  a  deal  before  March  2019, consumers and businesses  in England, Scotland, Wales  and Northern Ireland would have to pay more for goods and services.

In other words, a no-deal Brexit would be related to slower processing times for payments between the UK and EU, and custom duties would be paid for goods going to and coming from the European single market. 

At the moment most experts argue there are three possible scenarios:

1. If Mrs May's deal is rejected by the Parliament, the UK would be plunged into crisis.
2. The UK and EU could reach a good deal. In this case little would be likely to change when the UK leaves the EU.
3. According to opinion polls, British society remains deeply divided over Brexit. That's why a second referendum may be "on the table".

With regard to the third scenario above mentioned, we should consider that on 23 June 2016 about 12,000,000 registered voters didn't vote the EU Membership Referendum. We don't know how they would answer the following question: Should the United Kingdom leave the European Union ? And although in June 2016 Leave's margin of victory was 1,269,501 votes, Northern Ireland, Scotland and London voted to remain. 

Friendship treaty between Italy and Libya

In 2008 Italy and Libya signed a friendship treaty with the aim of seeking to turn page on 40 years of bad relationships between the two Mediterranean countries. According to the treaty, Libya would work to stop illegal migrants embarking from its shores. 

Unfortunately, as it is known, the deal was suspended in 2011 after the Libyan dictator, Muammar Qaddafi, was forced from power. And after  Muammar Qaddafi was killed in 2011, smugglers began to send thousands of migrants across the Mediterranean sea to the Italian shores.

Nowadays Italy and Libya are reactivating the friendship treaty signed ten years ago, as the co-operation between the two countries is essential to resolve the immigration emergency and avoid human tragedies.  

US-China trade war will not show a winner

Since May 2018 every social, economic, and political institution, at global level, has been under threat as a consequence of the US biggest protectionist approach. America has imposed $ 34 Billion worth of tariffs on steel and aluminium, and China has responded with its own tariffs on some US goods, including soybeans, chemicals, cars, and medical equipments. That's why there is uncertainty in the US stock market, as investors are moving to haven assets such as bond and gold.

Last week some UE politicians talked about a trade war and potential collapse of the world trade system. Actually the protectionist approach to the US economy will not be related to economic benefits. Americans may protect some jobs, but they will lose for more jobs in the medium term. 

In the long run the US will lose jobs, will lose investments, and will lose its economic power, because over the last three decades America has benefited from trade from East Asia. As above mentioned, on the one hand, China is also taking action and will soon establish commensurate measures, considering that US policies have been used to achieve protectionist goals. On the other hand, China president, Xi Jinping, recently said his country will continue to import EU goods and foreign investments.

It seems that this trade war between the US and China will not show a winner.