Interview with Loretta Napoleoni Part 1 (December 2011)

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Good morning to everybody! Here you can read the transcription of an interview which I have realized with the economist Loretta Napoleoni on December the 9th. Enjoy the interview and stay tuned!

 
We are here with Loretta Napoleoni, economist, economics professor at the Judge Business School of Cambridge, consultant of many governments about terrorism issues and of the think-tank Fundacion Idèas both
 
What is your opinion about the birth of a Europe with two levels, during the EU summit and what does it means especially for the P.I.I.G.S group?
 
First of all, we can’t speak of a Europe with two levels because such reality would occur in the presence of a Euro of A and B division, and so the newspapers which insert titles like “EU with two levels” are wrong. The situation currently is the same of yesterday, the countries outside the Euro zone remain in that position, and there are no other countries which have left the Euro zone. What has been decided is that the countries, outside the Euro zone, have stated that they won’t adhere, in disagreement with the Treaty, stating that they don’t want to stand to the new rules which will be decided during this summit, so I think that we should say that we have a structural problem inside the Treaties rather than an Europe with two levels. There is a Treaty subscribed by all the 27 countries and this Treaty stands, then 17 countries in the Euro zone will impose to themselves different rules, so it would have been better if they have decided to create a Europe with two levels. What’s happening it’s almost complex and also negative; if for example, the 17 countries decide to impose a taxation on the financial transitions, the countries which have not adhered to the Euro zone, can state that they don’t wait and consequently there’s no way to force them to introduce this taxation. The issue is serious, we’ll see what they we’ll decide today (9th December) during the reunion about the Euro, but as first step, it can be considered in a negative way.
 
What are your opinions about the behavior of Monti and Papademos’ governments? Which interests are moving these governments and which can be the possible evolutions for Italy and Greece?
 
I believe that these are Euro bureaucrats’ governments, in fact I also wrote this thing, and they will obviously do everything that will be asked to do from Bruxelles. Unfortunately, these governments have no private initiative or identity different from the European ones and currently we would need governments able to impose themselves. England, for example, it’s a country, which is facing an economic crisis almost deep as the Italian one, but no one attacks England. There is no problem of solvency and bankruptcy, because England has maintained the monetary sovereignty, can do quantitative easing and it keeps an attitude almost rebellious towards Bruxelles, but pursuing the interests of British people. The elements listed should be used by Italy and Greece both in order to present their own agenda to Bruxelles, not based on an austerity which will strangle the economy, rather on an expansive agenda which will sustain it. The English are following the austerity, by making almost the same maneuvers that the Greeks and the Italians want to do, but they have monetary sovereignty, they can do quantitative easing and they keep on sustaining economy, by printing money currency; we can’t do such things. These issues should be analyzed by these governments, but these are precisely Euro bureaucrats’ governments, and above everything else, these are neoliberal executives, unable to see the negative consequences of this policy, because they are ideologically neoliberal.
 
You have spoken recently, concerning Italy, of a chance or a perspective of a return to the Italian Lira. Which consequences could have a similar return on the short and long period?
 
We must see which kind of return to the Italian Lira is operated; if this return is operated, voluntarily, with a driven default it’s a matter, but if it’s operated because suddenly, we must face the default, it’s completely another thing. The costs are high for sure, there has been a study realized by Ubs, which calculated the costs around 4.000 euros for each family for the first years to be added, clearly, to the costs of the following years around the same values. The cost is high, but it’s also true that it could be the only way to restart our economy, because the alternative is to experience the Greek condition, with a relevant contraction of the economy, because even if money are provided to Italy (as to Greece) and the country reaches salvation,  the contraction of the economy will be related to the irony austerity policy which will be imposed, that, as we have seen in Greece, has impoverished a large amount of the population , decreased the pensions and the wages and also increased unemployment. These maneuvers are totally damaging in the short and long period both, and that’s the reason why, even in front of the money provision, we’ll see the negative effects of these operations on the next year.
 
 
 
 

 

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