The Italian Job

Baroness Murphy

I’ve just returned from watching the last of the olive harvest in Lucca, thankfully all gathered in before torrential rain caused landslips and destruction all over our area. And also with brilliant timing to avoid today’s general strike in Italy. Strikes are common in Italy, the consequence of an outdated system of labour relations and workers’ fear that nothing will ever change. The general anti-austerity strike today is no different from all the others and the embattled Prime Minister thankfully knows that and can ignore it.

Italy is changing though…it is quite striking now how everyone is much more aware of the need to pay taxes and there is a general anxiety in the air about the determination of the Government to follow up on dodgers. So far so good but the real problems are the employment laws, which give so much protection against sacking that no-one ever is, however incompetent they are and Italian employers won’t take anyone on except in ‘precario’ short term work which provides no prospects of saving, getting a house, stating a family and so on. Employment is now 10% and likely to rise further. Youth is demoralized but comfortable enough because young people all stay at home with their parents. There is no tradition of leaving home to share a flat with friends, partly because of the tradition of the extended family but also because there are no suitable rental properties; again the rental sector is sclerotic and hamstrung by secure tenancy that reduces the availability of rental homes.

Vinicio and Emilio with the electronic olive tree shaker.

Italy desperately needs to find a way to lower its debt servicing costs. The economy is inert and inflexible, in desperate need of deep structural reforms to boost its long-term growth potential and restore its competitiveness. Without these, the IMF currently projects Italy’s debt to GDP ratio remaining stubbornly close to 125% of GDP. There is I suppose a good chance that the EU will seize the opportunity to impose deep and meaningful reforms on Italy – something that at the moment Monti is trying to do but being frustrated by high hedges of opposition constructed by the political parties around him. He needs the backing of the EU and I wish him good luck.


25 comments for “The Italian Job

  1. Lord Blagger
    14/11/2012 at 11:22 am

    What are they paying taxes for?

    They aren’t getting services are they?

    So lets see.

    Baroness Murphey. Dependant on getting her hands on other people’s money.

    Ho hum. No wonder you’re so keen on taxing other people. It’s not as if you pay taxes on the money you get from tax payers is it?

    Meanwhile, lets look at the real issue in the UK. Fraud on an unimaginable scale.

    The summary from ONS. Page 4

    4.7 trillion hidden off the books – just for the state pension.

    • maude elwes
      15/11/2012 at 2:31 pm

      Here is how you get out of this crisis.

      • Lord Blagger
        15/11/2012 at 5:58 pm

        It might work for bankrupt banks.

        However, is that the real problem?

        e.g. What about the 4.7 trillion of state pension that cannot be paid? Debt forgiveness there means not paying the state pension, or welfare to replace it.

        Are you in favour of that?

  2. Croft
    14/11/2012 at 2:10 pm

    “that the EU will seize the opportunity to impose deep and meaningful reforms on Italy”

    Did I miss the commitment to democracy in your remarks!

  3. Gar Howell
    14/11/2012 at 5:18 pm

    I don’t know what proportion of the population of Italy still tills its own soil, on small holdings. There are quite a few small vineyards, as there are in P/S/G below.
    The neat thing about vines and olives is that
    they can be left for some time, without harm.
    Then it is a couple of months hard work mashing and pressing at the most joyful time of year! The harvest! If you get fed up with Bees… they are perfect! They leave with great enthusiasm!Go and sting somebody else you B888888s!!!)They are bastards, so I might as well say it. The workers can not possibly know who their drone fathers are.

    The strikes are said to extend across all the north Med countries, Spain,Italy,Portugal,Greece, but it was probably just a fictitious press story.
    The flight to the cities by the Spanish took about 25 years and was done and dusted by about 1990, if not before.

    I do not know of anybody within 10 miles of here who has anything more than an allotment
    to get on with…whilst striking from the day job.

    Uganda has, for example, most of its 30m people dependent on tilling their own ten acre plots to survive.
    Nobody in Western Europe does depend in such a way, but the Romanians do, possibly some Bulgarians too.

  4. Rhodri Mawr
    14/11/2012 at 8:00 pm

    Ha!Ha! Dependant on getting her hands on other people’s money This is a very serious accusation.

    However I was thinking of the pure pleasures of the harvest (viz BM’s photo) and since I only got one five gallon jar of cider from all my trees this year, due to very adverse pollination and flowering early on, I have got time to contemplate the theories! (I can normally get 50 gallons, enough alcohol for the whole year for me)

    Levin in Anna Karenina ( a reflection of the
    author himself) is the most pleasing character in the story which is out afresh for 2012, a dozen or more different film versions over the last 40 years or more, Garbo the best Anna apparently.

    He dedicates himself to “goodness” and happiness, and finds it, in hard work on his farm with the peasantry, harvesting the crops, and his love for Kitty, and babe.

    The stark contrast between the life of court and rural life, seems like a statement of the joys of primitive socialism. Levin is the only one who finds real happiness, and the one who is most disillusioned with social life in town!

    I find the way his thought evolves most enjoyable, a vindication for only crossing paths with Blagger and Lady Tizzy once a year!

    The pleasures of canned classics, music and literature, and hands-on-to-the-changing seasons, are more than enough compensation for not going up to town! These audio books by first class actor readers, are brilliant too! and an instant library from Koboarc or AmazonKindle! Marvellous!

  5. 15/11/2012 at 6:34 am

    Very good.Thank you very much

  6. baronessmurphy
    15/11/2012 at 9:43 am

    Croft, There can be no effective democracy if a country is bust can there? Democracy brought them Berlusconi. But in any case Monti is acting purely within the bounds of his mandate from the elected government. In what way is that not “democratic”. You aren’t suggesting I think that the EU should bail out any country without insisting that the recipient country should try to rectify the origins of its indebtedness?

    Lord Blagger, It is quite true that for most of my working life I was employed by the NHS or a university, both paid for largely out of taxes. But you aren’t in a position to know where most of my income comes from so perhaps you shouldn’t jump to conclusions. The Italians also have a health service, universal education and social welfare benefits. They do get services. If 30% of the working population doesn’t pay their taxes the extra burden simply falls on those who do. The level of taxation is another matter.

    • Croft
      15/11/2012 at 1:11 pm

      As I’ve pointed out before Berlusconi didn’t run up the massive debt that is their problem and the sclerotic employment and business rules pre-date him. While I think he should have dealt with things that is a slightly different point. In terms of a bailout the EU/IMF can certainly place conditions but as yet their is no bailout – nor probably could the EU afford to fund it. Either way the record in Greece tends towards the view that the EU/IMFs conditions are utterly unrealistic and counter-productive.

    • maude elwes
      15/11/2012 at 1:13 pm

      The statement you made gets repeated endlessly, is consistently erroneous and is getting on my nerves. It is not ‘their’ indebtedness, no matter how you want to push that line, it is robbery by banks instigated by the US government and followed by the London City monsters. These suffering people we see on our TV screens are paying for those at the top who have cocked a snook and said, FO? It is therefore banks indebtedness. Once again, this fraud began in the US with Goldman Sachs and the Federal Reserve. It is therefore US indebtedness these ordinary guys are being forced to pay the get out of jail card for. And why should they? Did they decide the banking services should be propped up with their tax money? No they did not. It is people like you who did that. So, in essence it is people like you who should be paying the debt off entirley with you own personal funds. As you decided to give the banks the freebie.

      Additionally, it is simply because the British are a nation of subjugated morons, stuck with an unelected head of state, as well as a second parliamentary chamber of unelected and hereditary buffoons running the show. And that is keeping our work force from doing exactly what the well informed Europeans are doing on our behalf.

      More power to the people.

      Of course, you are too comfortable to trouble your head about the difficulties facing the plebs, who pay your ‘expenses’ not salary, so how could you even have a glimpse of empathy?

      What is it you suggest is a good way out of the milieu? More austerity for us and substantial raises for you and the rest of those in your position in order to keep up with inflation driven by the fiat money you print? And the job you do can obviously be done without you most of the year, you are only here to tick boxes and sign up for the mess to continue. So you are a further debt that can be excluded by a good budgeting expert.

      First start here.

      Follow it up with this.


      Then ask how did Iceland manage to come out of this crisis? We are told is the working man’s resposibility but they didn’t say that did they? Want to look at that and wonder why we are not doing the same.

      Then there is debt forgiveness. Now who is afraid of that path? Why, those who created the crisis in the first place.

      • Lord Blagger
        15/11/2012 at 3:43 pm

        Not my figures – the governments. The real figure is much higher because they have fiddled the discount rate.

        So how much does the government owe for the state pension, as it stands?

        4,700 bn.

        Ho hum. Nothing to do with the banks there. They have no involvement with the state pension.

        So which bit of debt forgiveness are you after. Lets see. We let the young off the debts run up by MPs, by not paying any state pension to the people who’ve paid it.

        NOTHING TO DO WITH BANKERS (or Jews, or Blacks, or the Yellow Peril, or those nasty people in the EU, …).

        You do want your state pension don’t you?

        Don’t forget, if they can’t pay the state pension, they can’t pay any welfare.

        • maude elwes
          16/11/2012 at 5:51 am


          Clearly you have moved on from the wider responsibility to the narrower topic of singling out pensions. Why you feel you want to dicscuss that issue rather than expose the major problem that excompasses the entire spectrum of tax payers funds in general? This, I have to admit, is an enigma to me. Unless, it is something you personally do not wish to accept being part of.

          So, the problem lies with bent administrators and weak regulations, as well as a profoundly flawed system which leaves itself wide open to fraud. And that system is Capitalism. It is set up for the obvious easy trousering of the vulnerable tax payers cash which is open to robbery in broad daylight, with no get out for the small guy.

          And here is New Labour’s version of the present Conservative governments policies. They set it up for this stupid lot to put into practice.

          So, if the public believe they will get a different set of policies on voting out this bunch of crooks and installing the old bunch of crooks, be assured there will be no change by this paties pretence of socialism.

          And this guy was supporting Prescott in his bid for police commissioner yesterday. What a bloody farce we are forced to live with. And worse, how is it these people get away with this duplicity and remain with their faces up us?

          The banks, in collusion with governments of the US, UK and Europe, plotted to force the proletariat into up front, in your face, slave labour. Hence the massive demonstration and subsequent riots we see in Europe. They are fighting destitution imposed on them by Capitalist fraud. While the Baroness here enforces the notion ‘they’ are the debt creators and not her and her colleagues who colluded in the fraud creating this world wide insolvency.

          However, centering on pensions and what has happened to those fraudsters who run them, including our UK government and those who run that show, is not going to result in the culprits facing their victims and returning their cash. Is it?

          • Lord Blagger
            16/11/2012 at 11:42 am

            Why move to the state pension?

            Because its the state pension that is so screwed that it won’t be paid.

            It’s not about asset based pensions, its about Ponzi pensions and why the debts aren’t in the accounts.

            1. Private companies are not involved in the state pension system.
            2. The state pension system is off the books.
            3. The debts are so large, that they can never be paid.

            It’s the last point that matters. It’s nothing to do with capitalism. It’s to do with socialism, and the desire to redistribute cash to your favoured.

            So there is no 4.7 trillion salted away in bank accounts. There is no money too for the civil service pensions.

            It’s only accounting fraud that prevents people from realising its gone all Greek.

            So politicians will hide the debt, because they need people to carry on paying. In order for people to carry on paying, they need to hide the fraud.

            not going to result in the culprits facing their victims and returning their cash. Is it?

            No, it’s gone on benefits by and large, along with others

            Is it going to get their money back? No.

            Is it going to stop them losing more money? Yes

            Is it going to stop more people (the young) from being victimised? Yes.

            Is it going to enable them to make alternative provision? Yes – for most of them.

            They are fighting destitution imposed on them by Capitalist fraud.

            Ah yes. The state pension system is run by capitalists and not government. You’re getting desperate to blame others for the socialist fraud.

            e.g Take other people’s money and redistribute it.

            It’s a Ponzi. It’s run by governments. It’s nothing to do with capitalism.

      • Croft
        16/11/2012 at 11:41 am


        The world is not a giant conspiracy. Italy is in the mess it is because for decades it ran a structural budget deficit (see the ridiculous pension arrangement for much of the cause) and funded it though borrowing and the Italian people consistently voted for parties that failed to tackle this problem.

        • maude elwes
          16/11/2012 at 1:48 pm


          And what have we done here? Not been profligate like those bad Italians?

          Have we not funded ludicrous pensions for our government officials and various other conspiritors, now only to take on PPC salaries of over £100,000 each a year, plus pensions, all from borrowing. Why do you see Italy as differnet from our stable and down to earth maniac politicians?

          Is their dept bigger than ours? I don’t thnk so.

          Lookie here. And we are smaller than Italy.

          If it wasn’t a conspiracy or fraud, then what was it that bailed out our banking system, thereby turning the tax payer, who cannot get off shore, into dupes who have to pay it with slave labour.

          • Lord Blagger
            16/11/2012 at 5:04 pm

            Right conclusion Maude. Just today I was talking to someone about the debt, and their view was that future taxes have to be booked as an ‘asset’.

            In other words, you’re owned by the state.

            The banking bailout? How much are the losses?

            What’s the losses on the state pension?

            Lets get a little perspective with some numbers.

        • maude elwes
          16/11/2012 at 2:07 pm

          So, Blagger, private pension fraud is not as evil as government pension fraud?

          What a crock that is.

          And those on more of it. Pleeeeeese. Give me a break, private firms are the biggest fraudsters of all, and government simply follows suit. Because they are all in it together, and all get away with it together. All for one and one for all.

          No conspiracy? Oh, really?

          • Lord Blagger
            16/11/2012 at 5:00 pm

            From your link.

            To discourage savers from breaking this rule, HM Revenue & Customs (HMRC) makes an unauthorised payment charge of up to 55% of any pension payment taken early.

            So yep, its all the fault of capitalism that the state is screwing pensioners over. Sarcastically – really.

            They may do this by transferring your funds offshore, frequently putting the remaining portion in high-risk investments such as carbon credits or agricultural land in a developing nation.
            These sales companies sometimes take as much as 20 to 30% from the funds as a ‘management fee’ and, in the worst cases, the perpetrators simply disappear with the remainder of the pension fund. The money trail is hard to track down. HMRC will find you infinitely easier to trace, however, and will hand you a massive tax bill.

            Yep, the state is going after pensioners. We can’t allow people to have their hard earned cash. Nope. We’re bankrupt so we need to screw people over for every penny.


          • Lord Blagger
            16/11/2012 at 5:02 pm

            in “high-performance products such as carbon credit, biomass investments


            Ah yes. All those schemes which don’t work unless the government does people over.

            ie. You can make money harvesting tax payer’s and consumers cash. The government will force them to buy our products.

            Maude, you really need to consider that its a game rigged by the state.

    • Rhodri Mawr
      15/11/2012 at 4:28 pm

      Lord Blagger, It is quite true that for most of my working life I was employed by the NHS or a university, both paid for largely out of taxes. But you aren’t in a position to know where most of my income comes from</i

      The Lord Blagger should know that Paradise has to be worked hard for, in the way that Baroness Murphy has done. She has been tp paradise and back, so close to heaven.

  7. Lord Blagger
    15/11/2012 at 2:40 pm

    I think you will find Croft that he did create a large part of the debt. He carried on letting the off the book debts increase.

    Oh, well, nothing like running a Ponzi is there.

    • maude elwes
      16/11/2012 at 2:16 pm


      This one somehow didn’t load. It’s in addition to the other straight ‘private’ pension suppliers.

      Those who you claim don’t play the fraud game.

      Feast your eyes on this article.

      • Lord Blagger
        16/11/2012 at 4:58 pm

        I’ve never made that claim.

        It’s your usual argument. If I think something is wrong, it must mean that I think the opposite is good.

        How can you think that ripping off a worker on 26K a year for 420,000 pounds is a good idea?

        That leaves them with 130,000 pounds worth of state pension. Just totting up that lot comes to 4.7 trillion, and they can’t even pay that.

        The state has ripped people off for everything.

        That’s why you won’t get your ‘benefits’. You won’t even get your state pension either.

        There isn’t the money.

        It’s a ponzi.

  8. Croft
    16/11/2012 at 11:35 am


    Italian debt to GDP was <60% in 1980 but had risen to 120% just before B first became PM in '94. The present rate is ~120%. While off book debts exist in all countries they are frankly minor in this case its the debt interest repayments for the past debt that has pushed the Italian economy and its bond yield to crisis.

  9. Lord Blagger
    16/11/2012 at 12:57 pm


    You mean borrowing to GDP. Lets be accurate.

    There are other debts, such as pensions.

    Ho hum, nothing like hiding the really big debts down the back of the sofa is there.

    So if you hide debts, and carry on running a ponzi to get the money in to pay the borrowing, eventually it gets to the point where people think, hmmm, if I lend to the Italian government I won’t get my money back.

    Now Maude thinks that its awful capitalists who are to blame because they aren’t lending knowing they will lose the lot.

    The off the book debts are far larger than the borrowing.

    e.g. For the UK, 1.1 trillion in borrowing.

    3.7 trillion for the state pension (official fiddled figure). 1.35 trillion for the civil servants, …. (again fiddled). Just two of the off the book debts.

    For the UK, the off the book debts are 600% of the borrowing. Why do you think that is ‘frankly minor’?

    Where you are right is that even the small borrowing debt has tipped them over. It’s because there are two conditions to bankruptcy. First is assets < liabilities and no prospect of reversing. Second is an inability to meet cashflows. It's the later that is the final straw. That's what you see in Italy. They can't borrow to meet cashflows. It's just the same as people who take out more and more credit cards, withdraw cash and use it to pay the interest on their existing cards.

    Lastly. GDP. What's all the money got to do with a problem of governments? Why not use tax revenues as the denominator? Ah yes, it makes the problem look smaller.

    e.g Put all the debts as the numerator. Taxes as the denominator. Then you get a true ratio of whether or not its affordable.

    For the UK that ratio is 1,300% or 13 times geared.

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