On May 27, in Rome, the “populist” government put together by M5S and Lega, the two parties that had won the parliamentary elections, was rejected, in what can only be called a cold coup. The coup was executed by State President Mattarella, but the real string-puller is the ECB. Thus, the oh-so-democratic European elite has once again made perfectly clear that if they are not satisfied with the choice of the voters, they will disregard it!
President Mattarella made no secret of where his allegiances lie. He stated that the government presented by designated PM Giuseppe Conte “could provoke, probably or even inevitably, Italy’s exit from the euro” because of the views of designated Finance Minister Paolo Savona. This, despite the fact that Savona had made clear, in a statement that same day, that, putting aside his well-known euro-critical views, he would uphold the government program which does not contemplate an exit from the single currency and aims to reduce the debt/GDP ratio by increasing growth.
Mattarella departed from the traditional role of State President to give a highly partisan speech, warning that “The uncertainty on our position on the euro has alarmed Italian and foreign investors”, and painting a frightening picture of a sovereign debt crisis, an increase of the spread on Italian bonds, a stock market collapse and a threat to Italian savers. “Membership in the Euro is a choice of fundamental importance for the future of our country and our youth”, Mattarella stated.
Prior to his announcement, the market’s “invisible hand” had made sure that the yield on Italian bonds increased, helped by rating agencies such as Fitch and Moody’s that announced a review of Italy’s debt and a possible downgrading. That is the same scenario implemented in 2011, when the ECB toppled the Berlusconi-Tremonti government.
Soon after his statement, Mattarella announced that he would give the mandate to form a government to Carlo Cottarelli, a technocrat whose views run entirely counter to the program approved by the voters. A Cottarelli government will not obtain a majority vote in Parliament, but will stay on to run everyday affairs until early elections can be held, in September/October at the earliest.
Cottarelli is the man of the markets. After a career at the IMF, he was called by the Letta government to make a “review of spending”. When he proposed to cut 60,000 jobs from the public sector, it was even too much even for Letta’s successor Matteo Renzi who fired him. Cottarelli’s think-tank “Osservatorio sul debito” (Debt Watch) produced the report claiming that the Lega-M5S government program would mean up to €125 bn in new debt.
A technocratic cabinet in Italy won’t last long but it can inflict substantial damage in the meantime, starting with decisions to be taken at the June EU summit on the next five-year budget and EU integration and migration policies.
With this move, the EU elites have once again shown their will to do “whatever it takes” to hold on to their power. By doing so, they fuel the popular revolt against them, thus ensuring that their demise will be even more painful for them.