EU fiscal compact passes while Monti loses favor

The Italian parliament voted in favor of the austerity-laced EU "Fiscal Compact," which is scheduled to be signed by EU leaders on Jan. 30, a date properly fitting with the anniversary date of Hitler's coup in 1933.


The Fiscal Compact has been described by former Economy Minister Giulio Tremonti as "a declaration of war" against Italy.



According to the pact, Italy will cut EU45-50 billion from the budget every year for the next 20 years, in order to cut government debt from 120% to 60% of GDP. 


This comes on top of the "budget balancing maneuvers" which the government will be forced to implement to keep the deficit to 0%. Such maneuvers will weigh increasingly heavily, because the (monetarist) deficit/GDP ratio will zoom as GDP collapses from erosion caused by the deflationary policies.


The bill passed by Parliament effectively combines the Fiscal Compact with a series of other measures which had been previously issued as a government decree. 


Decrees (executive orders) must be voted on by Parliament within 40 days. However, Monti, for the third time now, put the confidence vote on the bill. Thus, MPs who vote against the content of the bill are accused of aiming at toppling the government.


Nevertheless, Monti has consistently lost votes as compared to the first confidence vote. When he was appointed, Monti had gotten 556 votes in the Chamber. 


On Dec. 16, on the first austerity bill, he got 495 votes. Now, on Jan. 26, he got 469 votes. The lost votes come mostly from Berlusconi's PDL party, where many people see Monti as a "leftist" submarine.


However, Silvio Berlusconi is reported to have made a deal, by which, in exchange for his support for Monti, he hopes that the current prosecution in Milan will not be allowed to go to trial before the statute of limitations runs out. 


Thus, Berlusconi has not learned the Qaddafi lesson: they will get you alive or dead, no matter how many concessions you make.


As for the Italian Parliament, it has implemented self-euthanasia. The legislature has been gouged internally, and what is left is only a facade.