leap

A brief survey of what we’ll be leaving behind when we take this alleged Brexit ‘leap in the dark’.

  • Italian banking stocks have declined by over 25% since the beginning of 2016. Earlier this week,  shares of Monte dei Paschi fell nearly 5% in a day, and they have now halved in value since the start of the year.  Shares of Carige were down 8% in one day, having in turn dropped 58% since the start of the year. Non-Performing Loans (NPLs) on banks’ books are around 20% of total lending.  This amounts to approximately €200 billion….12% of Italy’s GDP.  In some cases, bad loans make up  30% of individual banks’ balance sheets.
  • The mess created by EC meddling in Ukraine continues to have bad consequences. It’s bad enough that The IMF has warned the failure to address endemic graft risks sinking a $17.5 billion bailout. Now it emerges why Ukrainian President Petro Poroshenko was in Ankara on March 9: for a high-level strategic cooperation council meeting as the guest of President Recep Erdoğan…only three weeks after Turkish Prime Minister Ahmet Davutoğlu paid a snap visit to Kiev.
    On the same day as Davutoğlu was in Kiev to hold talks with Ukrainian Prime Minister Arseniy Yatsenyuk, Ukrainian Chief of General Staff Viktor Muzhenko met with his Turkish counterpart Gen. Hulusi Akar, in a sign of intensified military and defense relations. The two presidents chaired the council meeting with the participation of their countries’ foreign, defense, trade and energy ministers in order to shape a new phase in bilateral political and economic relations…given they share €4.5bn in trade, hardly surprising. So that’s one more Erdogan thorn in the side of the EU’s Eastern empire.
  • Britain will have little or no say over decisions made in a European Union increasingly dominated by German interests, Iceland’s prime minister Sigmundur Gunnlaugsson asserted yesterday. The UK, he addede, will wield “diminishing power” in institutions still under the sway of the Franco-German alliance: “When it comes to the big stuff the decisions are made by two, and increasingly one, country. Others are called to  meetings to approve of what has been decided, if not in the afternoon then during the middle of the night. This seems to have become the standard way of doing things in Brussels”
  • Nearly three months after the general election, Spain still hasn’t formed a government. New elections in June look increasingly likely, but in the meantime no economic progress is being made…and everyone continues to go lalalalalaaah about the unsolved bad debt ratio the banks racked up during the pre 2010 property boom. In turn, Interior Minister Diaz is making off-message noises about the migrant share-out plan: “Spain mustnot drop its guard We need to be prudent,” he said, adding that closing the route into Europe through the Balkans would see many refugees seek to enter Europe through the southern coast of the Mediterranean.

So then Remainders, we can take a leap in the dark, or a running jump off a diving board into untreated sewage. What’s it to be?

Yesterday at The Slog: Is Mario Draghi the Man with the Golden Gun?