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Grillo: French Revolution without the Guillotine

Handelsblatt’s Italian correspondent Katharina Kort had an exclusive interview with Italian politician Beppe Grillo about his ideas for change in Italian politics. The article is in German. However, I have read it and wanted to present a few salient points for discussion.

The outline goes like this:

  1. Headline:  French revolution without the guillotine – The Italian election winner Beppe Grillo calls for radical change in Europe.
  2. Purpose: Not to be Prime Minister but to bring about a “radical rethinking” about the economy in Italy and Europe.
  3. Need: Greater transparency and democracy within Europe.
  4. Actions: Online referendum for Euro. Votes on EU treaties and directives and a lot more
  5. Question: Why has only Germany prospered under the euro
  6. Prediction: The northern Europeans will only support Italy as long as their banks have Italian sovereign exposure.

Again, as our Italian reader summarized for us after the election, the vote for Grillo is more about eradicationg corporatism, corruption and the lack of transparency and democracy in Italy and Europe than about anything else.

Much more below for Gold subscribers

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Below is my translation of the article into English.

“We are the French Revolution – without a Guillotine,” summarizes Beppe Grillo about his” five star ” movement, which cleaned up in elections in Italy. In an interview with Handelsblatt,  the movement leader, who does not want to be a Prime Minister in any case, calls for a radical rethinking of the economy, in Italy and in Europe. Above all, he wants citizens to have more say in decision-making: “I would make an online referendum on the euro,” says Grillo. He also wants votes on EU treaties and directives, on issues, “in which our constitution is involved”. 

Grillo does not see himself as anti-European. He only wants a Plan B for Europe. “We must ask ourselves: what has happened to Europe? Why do we have no common method of sharing information, no common tax policy, no common immigration policy? Why has only Germany gotten richer? Grillo is convinced that “Italy is de facto already out of the euro.” The northern European states will hold on only “until they are able to rein in their banks’ investment in Italian government bonds. Then they will drop us like a hot potato.”

“We are honest. We don’t steal”

Rome’s surprise winner about Italy’s future in Europe, a radical rethinking and honest politicians.

The interview was conducted by Katharina Kort in Milan.

Q: Mr. Grillo, should Europe be afraid of your five-star movement?

A: Europe should not be afraid. On the contrary, Europe should be happy that we are here. Look at what is happening in Greece with “Golden Dawn”. We, on the other hand, are doing democracy a big favour.

Q: How is that?

A: We want more democracy, not less. I’m not a leader, but a guarantee. We are not a party, but a movement. We want there to be discussion on the law not just in parliament, but also on the Internet. Then an online referendum should be voted on. Today, the bureaucracy has replaced democracy. The community of citizens must be the state.

Q: This is revolutionary.

A: We are the French Revolution – without the guillotine.

Q: Is it true that you want to leave the Euro?

A: This is something I cannot decide alone. I would put the euro to an online referendum, likewise with the Bolkestein Directive, the Treaty of Lisbon – and all the issues which concern our Constitution.

Q: In Germany an anti-euro party has been formed. Are you on the same wavelength?

A: I don’t know what they say. But de facto, Italy’s already out of the Euro. The country is on the floor. The northern European states will stay with us only until they are able to rein in their banks’ investment in Italian government bonds. Then they will let us fall like a hot potato.

Q: Hasn’t Mario Monti saved Italy?

A: Mario Monti was just a bankruptcy administrator on behalf of the banks. Instead of cutting with the top earners and the state apparatus, he has saddled citizens with higher taxes.

Q: Last Friday, the ratings agency Fitch Italy took away the last A in its credit rating. They pointed to the unstable political situation as rationale.

A: Who is Fitch? We already are considering legal action against Fitch. The Italian political parties and media use Fitch to put the blame for the problems that they have caused on us. But look how calmly the market reacts. We have no pope and no government – and the spread…

Q: … well the risk premium on Italian government bonds against the German one…

A: … is still where it was before. Even after the verdict by Fitch.

Q: But “five star” prevents a government from forming…

A: We aren’t stopping anything. We are moving forward. We will decide law by law, whether we agree or not. But a vote of confidence for the parties? That we will not give.

Q: Why?

A: The old parties are finished. They should give back what they have stolen, and then go. Berlusconi is physically finished. Bersani’s name won’t be spoken in 15 days. We are at the beginning of a new era, but they don’t understand it yet. Either they follow us, or they are lost.

Q: What does “Five Star” do differently?

A: We are honest. We do not steal. Our parliamentarians are younger than the others. 90 percent of them have a university degree, and half are women. Politicians that don’t steal – this is a dream for Italy.

Q: “Five Star” is not taking the reimbursement of election expenses. How is the movement financed?

A: We have collected 550,000 Euro from small private donations between 20 and 30 euros on the Internet. The state can keep the money for the election.
 
Q: And with 550,000 euros you financed your campaign?

A: On my tour, volunteers built the stage, electricians took over the lighting. Everyone has given something. But people don’t understand that. So they watch us suspiciously.

Q: If “Five Star” could decide economic policy, what would it look like?

A: First we need an emergency plan: We need to help the unemployed and the small and medium-sized businesses. With support for the unemployed, but also with tax breaks for those companies that invest in research and recruiting young people under 35 years of age.

Q: How do you plan to finance this?

A: By reducing the costs – by pulling out of Afghanistan, which costs a billion euros, by taxing gambling machines, by eliminating almost a billion euros in government subsidies for the newspapers, by merging municipalities, getting rid of provinces, reducing deputies and large pensions by more than 10,000 euros. We pay more than 13 billion euros a year for these gold-plated pensions! That’s why they fear us – because we will get at those privileges. And we will publish all of it on the Internet! 

Q: Do you also want to go after manager salaries?

A: Yes, top managers should not earn more than twelve times their employees. And small investors should have a vote, not some internal committee.

Q: D you welcome the salaries referendum in Switzerland?

A: Definitely. But Switzerland shows above all the power of the Internet. A hacker has found out about the severance of ex-Novartis CEO Daniel Vasella and posted it online. Now it is discussed. Most people do not understood the Internet yet – and certainly not Italian politicians.
 
Q: Do you consider yourself anti-European?

A: I have merely said that we need a plan B. We have to ask ourselves: ‘What has become of Europe? Why do we have no common method of sharing information, no common tax policy, no common immigration policy? Why has only Germany gotten richer?

Q: And Italy?

A: Italy will not grow at all in the coming five to ten years. We need a complete rethink. That is why we talk of investment, not of growth. I make use of you Germans as well: the sociologist Wolfgang Sachs of the Wuppertal Institute. In other areas too, Germany is definitely an example for us.
 
Q: In what way?

A: Germany has grown its GDP by twelve-fold over the past decades. But the Germans are not working more hours now than they were, even though the population is twice as large today. This is due to productivity, which is important. We also need to increase it. This only happens with investment.

Q: What role does alternative energy play?

A: This is a key part of our program. Here too we use to the Germans as an example. Moreover, we are in contact with the U.S. journalist Jeremy Rifkin. We also want to us the net on this. Individual private energy producers can sell their surplus energy, like their solar systems on the roof, via the net.

Q: Does Italy even stand a chance?

A: I think a fresh start is possible for this country. We have entrepreneurs and engineers that are the envy of the world. Our researchers are world-class. I want them to come back, so that this country has hope again. And this hope is us.

Q: Mr. Grillo, thank you for the interview.

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Source: Handelsblatt

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.

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