Austrians

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http://www.nakedcapitalism.com/2011/11/marshall-auerback-the-road-to-serfdom.html

. . . . Italy

"It is not at all like Greece. It has a vibrant tradeable goods sector. It sells things the rest of the world wants. You introduce austerity at this juncture, and you will cause even slower economic growth, higher public debt, thereby creating the very type of Greek style national insolvency crisis that Europe is ostensibly seeking to avoid. And then it will move to France, and ultimately to Germany itself. No passenger is safe when the Titanic hits the iceberg."

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"In fact, given the 50% “voluntary” haircut imposed on holders of Greek debt, arguably the ECB is the only entity that can buy these national government bonds today. As Warren Mosler has noted, it is hard to see how anyone with fiduciary responsibility can buy Italian debt or any other member nation debt after EU officials announced the plan for 50% haircuts on Greek bonds held by the private sector:

Yes, all governments have the authority, one way or another, to confiscate an investors funds. But they don’t, and work to establish credibility that they won’t.
But now that the EU has actually announced they are going to do it, as a fiduciary you’d have to be a darn fool to support investing any client funds in any member nation debt.
The last buyer standing is and was always to be the ECB, which will now be buying most all new member nation debt as there is no alternative that includes survival of the union.
And when this happens there will be a massive relief response, as the solvency issue will be behind them, with the euro firming as well.

Of course, we will still have to deal with the reality of a major recession in Europe so long as the faith based cult of Austerians continues to dominate policy making. Sadly, that’s unlikely to change until people are shot on the streets of Madrid or Rome. But at the very least, let’s get this silly national solvency problem addressed once and for all in the only credible way possible. Mario Draghi, you have the chance to redeem yourself and your country. Don’t waste the opportunity."


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