by Tyler Durden
Not even an hour after Tremonti addressed parliament discussing the various ways Italy would have to reform in order to meet European demands for austerity, the now traditional serial collapse of Italian banks resume, with the halt of the unholy trinity Unicredit, Intesa, Banca dei Monte Pasci, as well as Mediobank ensuing. Concurrently the same Italian weakness appears to have spread to France where BNP falls over 5% and SocGen down over 6%, affecting financials across the Eurozone, and sparking visions of a repeat of yesterday's collapse in European markets led by the fins. And while there is the usual plethora of rumors as to what may be responsible for this renewed weakness for now it is best not to speculate for fear of black helicopters, what is certain is that Italy's main opposition leader is setting the stage for a rerun of Greek daily strikes, by objecting to the balanced-budget plan at the heart of the Italian deficit cutting program. As Reuters reports, Italian opposition leader Pierluigi Bersani on Thursday rejected proposals for a blanket constitutional rule forbidding budget deficits but said his party was ready to support rules for greater budget discipline. Bersani said his party was ready to support measures to reinforce discipline in public finances but said it made no sense to impose unrealistic constraints on policy. "First, let's not talk about things that don't exist in any place in the world," Bersani said during a hearing of the parliamentary constitutional committee. "Balancing the budget in the constitution -- well, we don't intend to castrate ourselves for centuries from any possible economic policy." "So let's find a solution that has flexibility." Translation: we now have at best a few weeks before the strike (and riot) cam moves from Syntagma Square to Piaza Navona. As for Italian (and French) bank halts: our advice - don't exhale or the entire thing will collapse, and the smallest rumor will bring the European financial sector to a screeching halt yet again.
Reuters on Tremonti's speech:
Italy is ready to act following European requests for labour market reform and privatisations to spur growth as well as other measures to balance its budget by 2013, Italian Economy Minister Giulio Tremonti told parliament on Thursday.
A letter from the European Central Bank last week asked for large-scale privatisation of local services, pension reform and greater flexibility in the labour market, Tremonti said.
Tremonti said Italy needed stronger austerity measures to meet its target of balancing its budget by 2013, and pledged stronger action to fight tax evasion and abuse of fixed-term employment contracts.
And the contextual interpretation:
Economy Minister Giulio Tremonti appeared in parliament on Thursday to discuss the government's response to the euro zone debt crisis amid increasing criticism of its failure to provide any detail of austerity plans.
Prime Minister Silvio Berlusconi told unions and employers on Wednesday that the cabinet would approve an emergency decree with deficit reduction measures by August 18 but provided no concrete proposals.
With tense financial markets hungry for detail of government plans to fast track some 20 billion euros of austerity measures to balance the budget by 2013, Tremonti addressed the parliamentary constitutional affairs committee.
Pierluigi Bersani, leader of the centre-left opposition Democratic Party, said the extreme turbulence on financial markets over recent weeks showed that more urgency was needed.
"The government didn't say anything to the unions and employers yesterday, that's the point, just as they didn't say anything in parliament 10 days ago," he told state television. "I hope Tremonti comes with some more detail today," he said.
Berlusconi has made a handful of statements on the escalating markets crisis since the beginning of the month, addressing parliament last week and giving a news conference on Friday when he pledged to fast-track reform measures.
But there has been widespread criticism that the government has not been clear enough about its plans to repair public finances in the face of a collapse in market confidence.
"European bourses, in their disastrous fall, cannot wait until Aug. 18," the respected daily Corriere della Sera said in a front page editorial, adding that so far no credible proposals had been offered.
At least now we have a date (one week from now) when we can add Italian daily strikes to the roster of daily entertainment. And with the FTSE MIB already so fragile a mere whisper an ocean away halts the market, we can't wait to see what antics those pranksters at the CONSOB come up with to prevent this latest house of cards from dropping terminally.
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