Dienstag, 27.06.2017 09:08 Uhr

Soros and Italy

Verantwortlicher Autor: Carlo Marino Rome, 05.06.2017, 11:39 Uhr
Kommentar: +++ Wirtschaft und Finanzen +++ Bericht 3327x gelesen

Rome [ENA] According to the Italian Press Agency (ANSA) from Rome, on the 1st of June, Open Society Foundations chief George Soros, the Hungarian-American financier, told the Brussels Economic Forum that Italy's banking and migratory crises are today "the most dangerous threat" to the European Union. The EU, he declared, is going through an "existential crisis", but the victories of pro-EU candidates in the Dutch and French

elections have given it fresh "impetus". The EU must be "saved" and "reinvented radically", said Soros. One has to consider that Italian’s is a 13-figure debt (whose value is 2,287,088,784,900) and it is equivalent to about 35,000 euros for every Italian, including infants and the centenarians. On average, the Italian public debt grows by about 2,100 euros per second, more than the amount an average Italian family earns in a month. September 16, 1992 is a date that remains carved in the memory of Italy. That same day George Soros made a speculative operation directed against the Bank of Italy: by selling Italian lira (LIT) on the open market (through his Quantum fund), Soros contributed to a currency loss of $ 48 billion.

The consequences of that speculative action were devastating: the Italian lira reported a loss of 30% and the exit from the European Monetary System. The government was forced into one of the heaviest public accounts correction maneuvers in its history - about 93,000 billion lira . With that maneuver, among the many measures, made its first appearance the house tax (Ici), nowadays Imu. Over the next few years, in more than one interview, Soros defined the operation against Italy as a "legitimate financial transaction." Soros based that operation having kept into account the Bundesbank's statements that the German bank would not support the Italian currency. Moreover, he added, "speculators do their job”.

Today, it’s more and more important, in such a critical situation, to foster an efficient functioning of the italian financial and tax systems. The Italian question seems to be one of those problems the G20 should address through the international effort not only to fulfil the financial regulation reform program, but also to stabilize the regulatory framework, avoiding the vagueness which impedes the supply of credit to the real economy. Financial resilience cannot be achieved by regulation alone. It’s crucial to support a wider approach in order to encourage a more effective international strategy of capital flow management, orienting global financial markets towards monetary and financial stability.

Up till now, the divergence of tax conditions and approaches at EU level, for example, entailed significant risks of trade and financial protectionism. Large exchange market intervention at global level or exchange rate movements among States have led to reciprocal accusations of “tax manipulation” or “competitive monetary easing” with the risk of paving the way to retaliatory actions or countervailing measures of all kinds. Even macroprudential policies have been applied in ways that tend to “ring fence” domestic banking and financial sectors. A new, unified, approach to these issues is required.

The G20, as the “premier forum for international cooperation” should not limit its role to giving advice to individual member countries or to promoting a stregthening of financial regulation.The G20 should perform the task of providing a sort of multilateral forward guidance to financial markets, showing the determination to counter unwarranted changes in market interest rates and exchange rates, which may give rise to destabilizing capital movements.On the other side, monetary spillovers, currency wars and cycles of financial boom and bust have thus become the main issues of disagreement in the fora of international cooperation.

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