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Five Star and Lega Ask ECB to Cancel €250 Billion in Debt!

An agreement reached today between M5S and Lega contains an explosive request: Debt Cancellation!

Rumors last night the coalition was about to collapse seem to be false. Explosive details emerge today as noted in these Tweets.

Details

  1. Five Star and the League expect the ECB to forgive 250 billion euros in Italian bonds bought via quantitative easing, in order to bring down Italy's debt
  2. The two parties want to re-open European Treaties and to "radically reform" the stability and growth pact. The coalition would also want to reconsider Italy's contribution to the EU budget.
  3. According to @HuffPostItalia, the 5 Star/League draft agreement would include an opt-out mechanism to leave the euro in an "agreed manner" were there to be a "clear popular will" to do so.
  4. The draft document says Italy should stay in Nato, but asks for an immediate withdrawal of sanctions vs Russia, so that Moscow can return to be a "strategic partner" in conflict zones
  5. According to @HuffPostItalia, the 5 Star/League draft document says there would be a "flat tax"... but with several tax rates and deductions
  6. taly's pension reform would be dismantled: workers would be able to retire when the sum of their retirement age and years of contribution is at least 100.
  7. The draft coalition agreement of a 5 Star/Lega government leaked to @HuffPostItalia calls for a revision of the Dublin regulation on immigration and for compulsory relocation of asylum seekers across the EU
  8. The draft coalition agreement of a 5 Star/Lega government leaked to @HuffPostItalia calls for a revision of the Dublin regulation on immigration and for compulsory relocation of asylum seekers across the EU

This cannot possibly fly, but that's the platform.

Yesterday, Italian President Sergio Mattarella warned Lega and Five Star against an anti-EU platform.

Last night, there were rumors the coalition would collapse.

Today we see this agreement as outlined on Huffington Italy and as described above.

Addendum

Ferdi Guigliano who made the above translations now posts this:

I do not know what the revised deal includes.

Addendum Two

Draft confirmed except for exit of Euro

PD calls proposal irresponsible

Mike "Mish" Shedlock

I would start with 1 trillion as a opening negotiating position. Why not? The reasoning be that it's printed (not real) money, anyways.

I agree with Maximus_Minimus, they should start at 1 trillion.

Overall, pretty interesting platform.

"5 Star/League draft document says there would be a "flat tax"... but with several tax rates and deductions"
Not sure how that would work. :)

"workers would be able to retire when the sum of their retirement age and years of contribution is at least 100."
How are retirement benefits supposed to work with the citizen's income? How can they pay for both?

EU/ECB give nothing without asking for it's pound of flesh in return. The reforms they would demand would likely be as onerous to negate any debt forgiveness benefit. It's all hot air, nothing will change until there is a major crisis forcing everyone's hand.

I have been reading more and more lately about a debt jubilee /forgiveness whenever the SHTF again. There is never any mention in the articles about the mechanics of the jubilee but it basically states that governments will never be able to pay off their debts and will need to be restructured. I tried to google this and the only thing I could find was that the central banks would buy all the govt debt and when the govt pays the interest the fed would return the interest payment back to the govt. This financial enginering has to have some consequence to it however. I am not sure of what but I expect something like this will eventually happen

It wouldn't surprise me if the ECB gives in to Italy's demands. They will do anything to save their Euro.

When it sinks in that the creditors (ECB/Germany) WILL NEVER be paid back they may as well write it off. However, in return they will want a tonne of concessions/controls going forward and will have to sell it to German tax payers without saying exactly what it is - German savings going up in smoke in the name of achieving a more integrated Europe. I think they will try to do that and it will need to be called out for what it is by the alternative media as the mass media and powers that be will white-wash to avoid a backlash.

The "reset" might just be a pooling of all Eurozone assets and liabilities with central budget and fiscal control sold to the members as an act of solidarity. "We Europeans" as Merkel would say. They'll probably get away with it too, or at least delay a breakup that will be even more traumatic a few years hence. All they can envisage is more of the same on steroids. Each state a vassal to bureaucrats.

@caradoc-again, German savings will not go up in smoke. The debt was bought via quantitative easing.

Careful about buying gov. debt directly. It would be the admission of bankruptcy and default. QE was similar but it was channeled through banks. Besides, treasuries are an important part of the financial system: most used collateral. When the SHTF, it will be the government saving the banks, pensions etc. by creating more debt (even though the trust in this solution is gone). The wet dream solution; debt destruction by inflation, failed miserably by creating the everything bubble.

Once you demand/request that existing Government debt be cancelled, how do you continue to issue more of it? What morons would buy it?

(Other than the European Central Bank, of course).

Never, ever will the ECB give a dime. Greece has been waterboarded for a decade in the effort to protect creditors. Italy's day has now come. Its either pay your debts or leave the EU.

Except you can bully Greece. Italy is a founder and 3rd largest. It would be an admission of failure of the project for Italy to leave. They won't let that happen unless there is a shift in German politics imho,

Italy will dance the dance as long as it suits them. They will look how long the euro and ECB will give them something and after that it is default time. Nothing new here for someone that has lived in Italy and knows its history.

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