For Europe’s establishment, it’s out of the frying pan and into the fire.
Just when Brussels thought it had avoided a potential firestorm by forcing President Mattarella to veto the prior finmin appointee, preventing prominent euroskeptic Paolo Savona from becoming Italy’s next finance minister, and instead in the latest proposed government, the finance minister would be the relatively unknown Giovanni Tria, it appears that Tria himself is a rather outspoken eurosketpic.
As we reported earlier, Tria, 69, is currently the head of the economy faculty at Rome’s Tor Vergata University.
However, investors are far more focused and concerned not with his present, but past and especially his views on the economy, the euro and the Eurozone, to determine if he, too, is a dark horse.
And what has spooked the establishmentarians in the early rounds of due diligence is the following article from December 2016 published in the Formiche, titled “Vi spiego la competizione truccata in Europa che favorisce la Germania” or translated “I’ll explain the rigged competition in Europe that favors Germany” in which Tria, like other run-off-the-mill euroskeptics, criticizes the European monetary union and its fixed exchange rate for allowing countries – such as Germany – to run high external surpluses and says fiscal policy should compensate for that lack of flexibility.
Meanwhile, in another article published in March 2017 in In Sole, looking at the outlook for the euro-region, Tria said that the “German economy’s growing surplus shows that monetary expansion, without a policy that aids economic convergence between the various countries, merely fuels an imbalance that puts us in conflict with the rest of the world.”
In other words, it appears that Salvini managed to replace one Euroskeptic with another, and instead of Savona, it will be Tria who will push for exploding the Italian budget, i.e.using fiscal stimulus, to offset Germany’s unfair advantage, i.e., back to the square one we were over the weekend.
Meanwhile, as Bloomberg’s Lorenzo Totaro and John Follain report, Tria publicly called for a debate on the euro in both Italy and in the rest of Europe, saying that “the biggest danger is implosion, not exit,” in an article co-written with Renato Brunetta, a senior lawmaker of ex-premier Silvio Berlusconi’s Forza Italia party.
In short: everyone who rushed to buy Italian bonds and bank stocks on the assumption that all is fixed, is strongly urged to reassess.
via RSS https://ift.tt/2LawKTf Tyler Durden