Even if there is a financial crisis worse than the post Second World War period, the British government is continuing along the path indicated by the European Union membership referendum in 2016, which resulted in a majority vote for the UK to detach itself from the EU. There was little thought of the many negative consequences. Scotland and Ireland, wiser, have always wanted to remain in the EU and did not want to leave. A fair number of British people are in favour of a second referendum and it is possible that a majority would now vote to remain.
The Bank of England has warned about the dire consequences of a “no-deal” Brexit, in which the UK would leave the EU without any withdrawal agreement, on World Trade terms only. It warns that GDP could shrink by 8% and the pound fall by 25%. There would be a considerable decrease in employment and house prices could lose almost a third of their value.
Despite the problems of the United Kingdom, with an undecided House of Commons and a shaky government, other countries, such as Italy, are manifesting a dangerous trend towards sovereignty, one which threatens the stability of Europe, which has had 73 years of peace and prosperity and since the establishment of the EU, great freedom of movement.
In Italy and other countries with a similarly weak currency, to exit from the EU would cause the country's economic collapse. Italy’s former currency, the lira, once reinstated, would be at the mercy of financial speculators and inflation, as happened before 2002, the year when the euro was adopted as the official Italian currency.
The political model of sovereignty, the possession of supreme or ultimate power, is back in fashion and those who favour it want Italy to free itself from the rules that the EU imposes. As it should be in all societies, in marriage and in a democracy, everyone's rights stop where those of their partner and others start. However, patriotism, which requires us to love our country above all, does not exclude the possibility of joining other entities to strengthen our economic and social conditions.
It is difficult to imagine an Italy where there are borders that limit the movement of people and goods. Today, Italy’s natural space has expanded to include all of Europe. The important thing is to maintain national identity and cultural traditions. To have borders that limit the movement of people and goods would be a journey back many years, one that the British are now hesitating to embark on.
Aggregation strengthens. Alliances are indispensable in an electronic and globalised society. For this reason, trade has begun to abandon individual shops and goods are now channelled into shopping centres and websites such as Amazon.
For the last few months, instead of pressing for the reform of the EU, the Italian government has undertaken a dangerous game with EU commissioners, who oversee compliance with rules that protect the interests of other countries. The arm wrestling is also enriched by mutual insults.
The fact is that in order to maintain electoral commitments and in view of the upcoming European elections, the Italian government formed by the League and the Five Star Movement (M5S) intends to raise its budget deficit--the gap between spending and income--to 2.4% of GDP. There is no initiative that includes GDP growth through increased production.
The 2019 draft budget will allow people to retire at 62 if they have paid pension contributions for at least 38 years and poor unemployed Italians and pensioners will be able to draw a maximum of 780 euros per month to get them out of poverty; the coalition government does not want to give up what they have promised their voters. However, the European Commission, the EU’s executive arm, is worried and not just the EU. Even the INPS, the Italian state pension agency, fears that the retirement of half a million workers will create serious budget problems.
The Italian government continues its dialogue with the EU, despite the latter’s rejection of its budget plan, but on its own terms. Italy will only accept a debt reduction from 2.4% to 2.2% with a saving of three and a half billion and that is not enough for the EU. What is surprising is that everyone disapproves of the Italian draft budget, even sovereign countries such as Hungary, Austria and the Netherlands.
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