In the end the central theme of most articles reporting on EU events, is that all roads end up leading back to Berlin, the powerhouse of Europe.
And who knows, perhaps Mario Draghi’s upcoming resignation and a possible wish to be the next Italian president is a sign that he wants to go back and save Italy from the wrath that Greece has suffered: Complete capitulation to Germany in exchange to economically stay afloat and keep from descending into social chaos as a result.
Italy is one of the world’s leading tourist destinations. The ruins of the Roman Empire, in particular, the Coliseum, Palatine Hill, the Pantheon and the Forum, are major attractions. New ruins are now being created to mark the political decay at work at the heart of Italy’s democracy and economic policymaking. These new ruins could well include the country’s central bank and parliament as well as the Eurozone as the stage is set for Europe’s next big economic debt crisis.
At the center of the brewing storm is the issue of confidence. When investors trust sovereign debtors, governments have access to credit markets. When investors lose confidence in a country’s ability to pay, they head for the door. The cost of borrowing goes up and at some point it hits a level where it becomes unaffordable to raise money.
Such a loss of confidence afflicted Cyprus, Ireland, Greece and Portugal between 2010 and 2012, shutting them out of public borrowing, creating the European debt crisis and forcing them to seek financial assistance from the European Union, European Central Bank and International Monetary Fund. Italy barely avoided that embarrassment. Continue reading