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Germany and Italy within the European Union

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No one is really fine in the European gas chamber but – just to paraphrase Orwell – someone is finer than the others. It is Germany, as you can easily imagine.

Earlier this year, the German industrial production recorded no annual growth and consumer confidence was at very low levels.

However, as is now well-known, since the beginning of the Euro phase Germany has destroyed our manufacturing industry and is replacing us in the major global markets: China, Russia (except for the crazy sanctions due to the situation with Ukraine – an operation much more linked to the US and NATO actions than to the Russian ones).

Hence the crisis of German production was short and regarded the relative compression of the Chinese market, as well as the much more severe negative cycle of the US production.

However, when markets are stolen from the others, everything gets easier and quicker.

The story began with the Social Democrat Chancellor, Gerhard Schroeder, shortly before the phase of the EU single currency started, when – also thanks to the “reabsorption” of the German Democratic Republic (GDR) still underway – he managed the forced lowering of the German mark value and the companies’ production costs, already below the expected Euro waterline, so as to make the “great German factory” already competitive even before the introduction of the single currency.

Moreover the Euro certainly enabled Italy, which was not at all prepared for the single currency, to reconstruct its own debt record, which was approaching the end with an imminent “Argentina-style” perspective.

But the single currency, inevitably too “high,” destroyed the purchasing power of wages and salaries, by halving them, and doubled both production costs and consumer prices.

Italy experienced an 80% deflation, which lasted six month, of which you can easily imagine the social effects.

Social effects experienced not even after the Second World War lost – and that says it all!

Hence Italy was forced to increase exports, which made us gain some positions on the world market, but destroyed – due to an usurious and virtually absent ruling class – the great State-owned industry, sold at a loss, however with one-off “transfers and payments” to the old and new political forces.

Furthermore, the shift to a stupidly “high” currency value further destroyed Italy’s banking system, which is now playing a secondary role compared to the large liquidity areas being created both within the EU and in the rest of the world.

In fact, Italy experienced recession for at least five of the past eight years.

Still today, Italy’s GDP is lower than in 1999 and its sovereign debt has grown by 133% since 1999. Furthermore, since the introduction of the Euro the national average productivity has steadily declined.

But what does it has to do with Germany? Certainly it has to do with Germany.

In fact, the European Union is unable to manage the huge German current account surplus – and indeed it remains silent before it. Said surplus is over 8% – a percentage that no EU Treaty allows and which also funds the current remarkable growth of wages and salaries in Germany (4.5% on average), besides refinancing the local domestic demand, which is the real engine of growth in the current phase in which exports are flagging.

Since the beginning of the 2006 crisis, caused by the US “financial bubble” on the European monetary and banking markets, Germany has slowly but relentlessly forced the other EU countries to be more fiscally “correct”.

This means to increase their domestic taxes in order to support the expected lower purchase of government bonds and to “cash” money to add to their coffers in case of few renewals of bonds at maturity.

Nevertheless, even freshmen in Business and economic universities know that if taxation increases, domestic consumption will decrease and that if the internal market shrinks, there must be an equivalent share of exports offsetting that loss.

However, if the Euro external value changes for each individual country of the Area, Italy’s EU competitors recording a stronger and more stable external value of the Euro will take markets away from Italy also at equivalent prices.

This has meant basically destroying the Italian, Spanish and sometimes even French companies to favour both Germany and the German industrial expansion area beyond the old Iron Curtain.

Since the very beginning, the German labour outside German borders has supported the country’s expansion onto global markets at highly competitive prices, while Italy and the other regions which had not been cynically prepared for the Euro geoeconomics have collapsed under the weight of the unsustainable costs of their exports and international competition.

While former Italian President Ciampi was visiting China’s Great Wall, Chancellor Schroeder quickly landed in Beijing and in one single day signed all the contracts concerning the remarkable expansion of the Volkswagen Group into China.

It is worth recalling that this was exactly the same paradigm used by the Federal Republic of Germany (FRG) against the German Democratic Republic (GDR), reduced to an Anschlűss country, both to avoid the competition of Communist Germany’s companies, which were not performing so poorly, and to use – at a much lower cost – the labour force “released” from those areas.

Hence the model with which the Federal Republic of Germany (FRG) bought the German Democratic Republic (GDR) – with our money, and sometimes even with the GDR money – was replicated for the rest of Europe.

Incidentally, at that time the “moralistic” rules on rigour, which found many inexperienced advocates (but we would also say agents of influence) applied not even to Germany which, in the phase of “rigour”, made three-year investment plans accounting for 5.2% of GDP.

Also at geopolitical level, the strategic relationship between Germany and the United States makes economic sense: the pressure of sanctions against Russia, guilty of taking back what is its own in Crimea and part of Ukraine, undermines the economies more interrelated with Russia, including Italy’s – hence a crisis adds to the other.

The US interest is very clear: the more the European economic fabric and common interest crumble, the more the Dollar area – and, in any case, the US commercial and financial expansion area – is guaranteed and expanded.

The more the United States come back to Europe, the more the German bilateral power on the USA increases and the bilateral power of the other EU countries proportionally decreases. After the notorious “Arab springs”, the latter are now reduced to an internal struggle (such as Italy vs. France for Libya) or to a “joint action” – often fully ineffective – with the United States which, however, think they must walk out of the Middle East, after having madly set fire to it.

In a recently-published book, a CIA executive has candidly admitted that the United States “hoped that the democratic uprising would destroy Al Qaeda” – and we have seen with what tragic and uncontrollable outcomes.

Not to mention the case of the war in Syria and its impact on the EU welfare, which will shortly become totally unsustainable and will place the less cautious and far-sighted EU countries in a tragic situation while, on the contrary, it will create opportunities for profitable investment for the North European and US banks and private insurance companies.

After the EU restrictive rules on the EU Member States’ public budgets, with the 2011 regulations known as “Two Pack Regulations”, France has set itself – at least partially – against the financial (and later political) Germanization of the European Union, while Italy has continued to use the debt lever and the lucky chance provided by the ECB Governor, Mario Draghi, with the programme designed to repurchase – on the secondary market – the surplus of government bonds of countries like Italy.

But it will not last.

There are only two possibilities: either the sequence of “sacrifices” and budgetary constraints is applied – and forget about the story that States spend too much and badly, because all States do so – and hence Italy will no longer have a domestic market to support its industrial output, because it also has a low labour productivity, or it shall incur debt on financial markets and ultimately collapse under the burden of the interest generated by that debt.

Obviously, they will help us die.

Later, they will buy our companies at low cost so as to incorporate them in their European and global networks, with the national workforce that will be a variable – and not a constant – factor of business calculations and profits which will go abroad.

In 2013, Italy already ranked second in the list of Mergers and Acquisition (M&A) of German companies – and it just so happened during the crisis – and currently over 30% of the Italian companies which are now no longer nationally-owned have already been sold to the Germans.

Only in 2013, for example, we recorded as many as 23 deals of German small and medium-sized companies (SMEs) which acquired Italian companies, out of a total of 171 sales of national SMEs between 2013 and 2014.

Given the complexity of these operations, it is obviously not possible to speculate on the activities which are still in progress.

Hence the issue lies in undermining a country and then buy it at very low prices.

A strategy which has long been developed and that Italy, for the fatal inability of its ruling class, did not prepare on time, i.e. before the Euro’s entry into force.

What can be done? Getting out of the single currency is useless.

However, Italy must operate freely on the major global markets where the country can still compete with its European “allies” – and it shall do so quickly and with harsh and resolute methods.

And it must accept foreign to foreign transactions not denominated in Euro, as with China and the Russian Federation.

This is what good intelligence and a ruling class not consisting only of mere parvenus and upstarts, like the current ones, would be for.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Baerbock has publicly declared ‘a war against Russia’

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image source: Wikimedia Commons

On January 25 Germany and the United States decided to provide Ukraine with Leopard 2 and Abrams tanks totaling 45 (respectively: 14 + 31). Some European countries also intend to join these supplies that could reach around 300 main battle and light tanks during this year. The Pentagon official confirmed that collected ‘the armor basket’ could include 300 tanks and ACV/APC during 2023. It will be 28th ‘basket’ of lethal military supplies of the transatlantic alliance to Ukraine that started on a massive scale in 2022.

– Unlike fascist Germany, current Germany openly declared a war against Russia on January 25. Arguing in favor of sending NATO tanks and ACV/APC to Ukraine, German Foreign Minister Annalena Baerbock said EU countries were fighting a war against Russia. US and EU officials have previously gone out of their way to claim ‘they were not a party to the conflict in Ukraine’.

This is a quotation from what Baerbock has stated at PACE. “And therefore, I’ve said already in the last days – yes, we have to do more to defend Ukraine. Yes, we have to do more also on tanks,” Baerbock said during a debate at the Parliamentary Assembly of the Council of Europe (PACE) on January 25. “But the most important and the crucial part is that we do it together and that we do not do the blame game in Europe, because

so far from the German Government, it means that her statement is fully shared by the FRG Government we are fighting a war against Russia and not against each other.”

If she has not been sacked and the Parliament.

It also means that the FRG has radically changed its foreign policy and once again is unleashing the next World War – the Third one.

It means that German tanks again will appear in Ukraine and Russia like in 1941-1945.

It also means that pro-Nazi coalition supports ultra-nationalist regime in Kiev that began its own and unprovoked aggression – initially against Donbass in April 2014, and later against Russia in October 2022.

It means that since January 25, 2023 current joint Ukrainian-NATO actions in Ukraine can be politically and juridically labelled as “a declared direct combined Ukrainian-NATO aggression against the Russian Federation”.

Russia angrily reacted to such abnormal statement. Kremlin spokesman Dmitry Peskov told reporters that tank supplies to Ukraine by Western countries testify their direct and growing involvement in their armed conflict. He added that the flow of western weapons to Ukraine does not help potential negotiations between Moscow and Kiev.

Russian Foreign Minister Sergey Lavrov warned that any shipments containing weapons for Ukraine would become a lawful target for Russian forces,

The Russian Embassy in Germany for its part warned that “this extremely dangerous decision [by Berlin] shifts the Ukrainian conflict to a new level of standoff.”

All five parliamentary political parties at the Russian State Duma are demanding from the highest military and political structures in the country to destroy all Ukrainian-NATO heavy weapons – not only at the front lines, but additionally and primarily near Ukrainian-NATO border as soon as such weapons cross it on land, in the air and at sea.

Such destruction will save a lot of innocent lives amongst civilians and military men.

– Moscow has also cautioned NATO and non-NATO members against supplying Ukraine with depleted uranium munitions (DUM) and with long-range weaponry capable of striking at cities deep within Russian territory.

Supplying Ukraine with DUM for western military hardware would be regarded by Moscow as the use of “dirty bombs,” said Konstantin Gavrilov, head of the Russian delegation to the Vienna Negotiations on Military Security and Arms Control. Speaking at a plenary meeting of the OSCE Forum for Security Cooperation in the capital of Austria Vienna, Gavrilov cautioned “western sponsors of Kiev’s war machine” against encouraging “nuclear provocations and blackmail.”

“We know that Leopard 2 tanks, as well as Bradley and Marder armored fighting vehicles, can use depleted uranium shells, which can contaminate terrain, just like it happened in Yugoslavia and Iraq,” he said. “If Kiev were to be supplied with such munitions for the use in western heavy military hardware, we would regard it as the use of ‘dirty nuclear bombs’ against Russia, with all the consequences that entails.”

Gavrilov also warned that Moscow will retaliate if the West were to supply Kiev with long-range weaponry to carry out strikes against Russian cities. “If Washington and NATO countries provide Kiev with weapons for striking against the cities deep inside the Russian territory and for attempting to seize our constitutionally affirmed territories, it would force Moscow to undertake harsh retaliatory actions. Do not say that we did not warn you,” he remarked.

– Ex-President Donald Trump called on Joseph Biden to end ‘crazy’ Ukraine conflict before it leads to the use of nuclear weapons.

“First come the tanks, then come the nukes. Get this crazy war ended, now. So easy to do,” Trump outlined.

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Davos more of a show, no longer so important

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“Davos has become more of a show, it’s no longer so important”, concluded Liviu Muresan from Eurodefense Romania at the end of the webinar recently jointly organized by Eurodefense Romania and the Bucharest-based MEPEI think-tank. In the aftermath of the Davos World Economic Forum, 20 key-note speakers invited to examine this year’s edition did not hesitate to cast a critical eye upon the outcome and some of them were very straightforward in assessing this year’s  WEF.

Adrian Severin, former Romanian minister of foreign affairs, gave a remarkable definition to the Davos WEF:  “something between mythology and reality because politicians come to Davos to look for intellectual validation and economic support, corporatists come to look for intellectual respectability and political assets, civil activists seek kinship with the political power and financial sponsorship. They make a network of self-legitimized supra-national power that combines the characteristics of occult interest groups, influence groups that associate oligarchic cynicism with democratic hypocrisy. A group of self- proclaimed prophets, self-confirming their prophecies.”

Experienced in foreign policy, Severin could identify new approaches during the Forum, so he portrayed in detail “the Davos WEF that turned from an incubator of ideas into a platform for launching messages and trial balloons, from a doctrinal workshop into a ballroom…from a political designer into a moral whistle-blower ….from a producer of doctrines into a producer of dogmas…from the champion of missionary realism into athlete of utopias ….from a platform of dialogue into a platform of war propaganda…from a believer in globalization into a promoter of globalism…from a follower of inclusion into a promoter of exclusion….Davos is at risk of losing popularity and political failure, it no longer solves problems, it either deepens the existing crisis or generates new crises .”

Severin argued that “this year’s edition was significant through the absences rather than through the presences because only Olaf Scholtz was present this year out of the G7 leaders….Russia and China were absent….The president of the European Commission has become a US ventriloquist , no longer representative of the European Union that is neither  Union, and no longer European…The main representatives of the US were absent. Those present discussed everything but the risk of having the world fractured into two blocks with incompatible cultural identities, with the Euro-Atlantic block increasingly weaker than the Indo-Pacific block and the Euro-African-South-American block…the discussion about green energy and other similar topics  is nonsense as long as solutions are not presented.”

Severin believes that the main concern should be “to stop the war in Ukraine and to normalize the dialogue between the Euro-Atlantic and the Euro-Asian blocks”, especially because this year’s theme was “Cooperation in a fragmented world”.

The most inspirational speech was given by Antonio Gutierez, the head of United Nations Organization, who referred indeed to the fragmented world, but Severin pointed to the fact that Antonio Gutierez gave such a speech in Davos and not in the UN in New York or Geneva, a sign of the failure of the UN, which means that the UN and the OSCE must be revived.

General Corneliu Pivariu, former head of the Romanian Military Intelligence, stressed that the Davos meeting actually does not solve any problem of the world. It speaks every year about economic inequalities without solving that, doing every year nothing else than acknowledging the deepening of inequalities. For instance, according to Credit Suisse, between December 2019  and December 2021, the global wealth increased with 42 trillion USD but 26 trillion USD belonged to the 1% richest population, and 16% to the rest of 99% of the world’s population. Another topic is global warming, which is also never curbed, and an Oxfam report released in November 2022 revealed that a billionaire’s annual emissions of CO2 are one million times higher than a person in the 90% of the world’s population.

Carlos Branco, senior analyst with the National Defense Institute in Portugal, confirmed that Davos meeting did not find solutions to the world’s problems. He reminded that, in Davos, Ursula Von Der Leyen, Olaf Scholtz and other leaders spoke of the need to make Europe independent in terms of energy but they did not explain how exactly Europe will manage to provide itself commodities and raw materials, since Europe currently has 37 strategic dependencies out of which 2% from China and 3% from Russia, while the new technologies will still make Europe dependent on Asia. “The future of Europe will depend on how it will position itself in relation to the advanced technologies, Artificial Intelligence,  a.s.o., but for the moment, Europe is trapped.”

As an outstanding expert on Asia, Viorel Isticioaia Budura, former Managing Director for Asia and the Pacific at the European External Action Service and former Romanian ambassador in China and Japan, pointed to the absence of many G7 leaders in Davos as well as of Asian leaders, among which China, which is “the beauty and Miss Universe of the world’s interdependency”, and mentioned the presence of many Asian business people in Davos this year, while reminding of the importance of Asian countries and of the three high-level summits organized in Asia last year, G20, APEC and ASEAN, and of what Anthony Blinken, the US secretary of state, called “the rest of the world”, namely, Asian countries that do not follow the Euro-Atlantic order but have become a significant part of the global economy. Isticioaia Budura wondered if the “re-globalization of the supply chains would be possible” and declared China “the champion and the promoter of globalization.”

Michael Zinkanell director of the Austrian Institute for European and Security, Vienna, expressed his opinion that “we a living in a bipolar world dominated by the US and China while Russia has no ability to project global power, and some clear conclusions after the Davos meeting are that instability is increasing in the world, the world is becoming more and more interconnected and energy independence and decarbonisation are very important for the future”.  Zinkanell sees natural disasters and socio-economic risks as the main concerns for the future, but also the interactions with some authoritarian countries that are trying to lead in this new multipolar world that will allow multilateralism.

Germano Dottori, editor of the Italian Geopolitical magazine, also agreed that Davos meeting became too politicized and not too useful but he sees the prospects for the future of the world “not so bleak like a few months ago.”

Flavius Caba Maria, president of MEPEI, the Bucharest-based think-tank that co-organized the webinar, expert on the MENA region, mentioned a few aspects among which that fact that the representatives of oil and gas companies were welcomed at Davos, unlike Glasgow, which is a sign that renewables cannot entirely meet the energy needs of humanity.

On the other hand, Caba Maria pointed to the BRICS countries and his remarks could be seen as complementary to the idea mentioned by several speakers that the Western institutions seem to have lost their ability to solve the global problems and to ensure economic equality.

Caba Maria emphasized that “the global South is establishing its own system of alliances, turning them into a source to transform global economy, thus creating a development alternative trend, different from the one promoted by the West, with three regional alliances looming: the African Union, the Community of Latin American States and Shanghai Cooperation Organization in Eurasia. Among all these countries, China stands out and everything that’s going on in China is of utmost interest for the other countries, because it has become the world’s largest economy.”

Facts to keep in mind for the organizers of next Davos meetings.

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Serbia must reject the ultimatum regarding Kosovo

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Photo: Presidency of Serbia / Dimitrije Goll

The President of Serbia, Aleksandar Vucic on January 20th  had a meeting with the Western negotiating team about the solution for Kosovo. European mediator Miroslav Lajcak, American envoy Gabriel Escobar, German and French special advisers Jens Ploetner and Emmanuel Bonne as well as Italian prime minister’s adviser Mario Talo once again discussed with the leaders of Serbia (and Kosovo) the plan(ultimatum) that should regulate relations between Belgrade and Pristina. Officially, the plan for a peaceful solution has not been presented to the public. However, Serbian media published the text of the plan and they clearly emphasize that it is an ultimatum from Quinta.  And what is even more important, no one from the Government of Serbia denied it.

Which clearly tells us that the Government of Serbia is releasing the plan(ultimatum) as a trial balloon. However, that decision turned out to be wise, because the reactions of the citizens of Serbia to the plan were more than clear on the point of view that the plan was unacceptable. Because that agreement, among other things, requires that Serbia in practice (de facto) recognize the violent secession of its own Province that is, allow Kosovo to join the United Nations.

The plan compiled by the advisers of the leaders of the two largest democracies in Europe – French President Emmanuel Macron and German Chancellor Olaf Scholz – represents a gross violation of UN Security Council Resolution 1244, the basic principles of democratic international relations, the UN Charter, and the OSCE Final Document.

The plan(ultimatum) for Kosovo, humiliates Serbia and the Serbian people by ordering that Serbia respect equality, sovereignty, territorial integrity and the so-called state symbols of Kosovo and all other countries, except it`s own sovereignty, territorial integrity and it`s internationally recognized borders confirmed by the UN, OSCE and other international organizations. Serbia is expected to cooperate in dismantling its own integrity, its own constitutional order and international reputation, so that no one could use the “Kosovo case” as a precedent for unilateral secessions, which primarily refers to Ukraine.

The fact that currently five members of the European Union (Spain, Romania, Slovakia, Greece and Cyprus) and four members of NATO do not recognize the independence of Kosovo shows how bad the acceptance of the plan would be for Serbia. The goal is also to place all responsibility for the victims and destruction on Serbia, as a victim of the NATO aggression in 1999, and to use this act to justify the aggression against Serbia, which was carried out against the international law.

Kosovo is not a frozen conflict, as claimed in the West and repeated by official Belgrade, nor it can be resolved by an ultimatum to Serbia. The best example of this is Cyprus, which was invaded by Turkey in 1974, and despite this, neither Turkey nor Cyprus (or Greece) agree to any ultimatums, nor does anyone give them. The question must be asked here, how is it possible for Quinta to issue an ultimatum to Serbia and why are the Serbian Government and the President of Serbia allowing it?!

The Serbian Government must apply new tactics

Negotiations on Kosovo with Quinta must first be conducted on essential matters. And that means, above all, the protection of the current Serbian population in Kosovo and the return of the 250,000 expelled Serbs. Regulating the status of Serbian state property in Kosovo, which was seized by the separatist government in the province. Plus, the return of stolen property to the Serbs, who were forcibly expelled from the province.

Also, bearing in mind the aggressive policy of the Kosovo separatists, who, contrary to the agreement with NATO, are sending special units to the north of the province, while perpetrating violence against the Serbs, a new strategy is needed. And this is primarily reflected in the fact that the Government of Serbia must help establish the Republika Srpska in the north of Kosovo. This means that the local Serbs would have their own police(including a special police unit), judiciary, prosecutor’s office, education, health care and control over border crossings. In other words, parity would be established in the armed forces, bearing in mind that it is not realistic to expect that Serbian president Aleksandar Vucic will ever approve the sending of the Serbian Army to Kosovo. In this way, Serbia would strategically strengthen its positions and would wait for a change on the geopolitical scene of the world, until favorable conditions are created for the full return of the southern Serbian province of Kosovo to Serbia.

Otherwise, if Serbian Government agree to Kosovo’s entry into the United Nations, it would mean that Kosovo could unite with Albania, about which Kosovo Prime Minister Albin Kurti also publicly spoke about. This would than open the issue of secession from Serbia of the Presevo Valley and the geographical region of Sandzak. And what is even more important, an incredibly strong pressure to abolish Republika Srpska in Bosnia and Herzegovina would begin. All of the above would have catastrophic consequences for the country of Serbia, but also for the entire Balkans.

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