zerohedge.com / By Tyler Durden / August 6, 2013, 09:13 -0400
With Italy’s sovereign bond yields hovering at 3 year lows, one could be forgiven for falling for the constant stream of gibberish from EU leaders that the worst is over. However, aside from the ‘promised’ OMT foot on the wind-pipe of non-domestic bond vigilantes (fighting an inexorable demand from self-referential banks and pension funds bidding for BTPs), the situation remains bad at best andin terms of debt-to-GDP, the worst since 1925 when Mussoilini was proclaimed fascist dictator. With Letta and his allies forming the 64th cabinet since WWII (and 27th since 1980) his lifespan seems limited to change anything and with Italy accounting for 16.5% of the EU’s GDP (and forecast to contract 1.9% next year) – the current real GDP is smaller now than in 2001. Attempts to revive growth are about to be thrown into tumult once again as Berlusconi’s party threatens mass resignation. As we noted last night, do not be fooled by the apparent tranquility in Europe.
Via Bloomberg Brief (@EconomistNiraj),
Prime Minster Enrico Letta’s attempts to revive economic growth may be in jeopardy as a result of a political storm triggered by Silvio Berlusconi’s conviction for tax fraud. Berlusconi’s People of Liberty party is threatening a mass resignation of parliamentary deputies that will bring down the coalition government unless President Giorgio Napolitano pardons Berlusconi.
Thanks to BrotherJohnF