Italy is a big risk for Finland because of bad banks and bad government

Italian banks are said to have €360 billion of non-performing exposures, of which €200 billion are bad loans. Large scale corruption and fraud has been reported at 2 medium sized banks in the Venice region. A huge clean up is ongoing and these banks are said to have received liquidity guarantees from the Italian government, while one has been able to receive liquidity from the EBC. The EBC supervises 14 of the largest Italian banks. When do these losses start to move from Italy, to the EBC, and then to Eurozone taxpayers?

The exposures between the Italian banks and the French and German banks are big resulting in a huge systemic risk on the Eurozone taxpayers, to which Nordea is now joining! Finland’s Finance Minister, Mr. Orpo, is a simpleton if he thinks that Finland is not at risk with the Eurozone banking union! Having one more big bank in the Eurozone, that is obviously connected at the hip to all of the other big banks, is clearly an increase in risk for Finnish taxpayers.

And do not forget that the threat of a volcanic catastrophe near Naples is growing, according to scientists. Research shows that energy is building up underground at Campi Flegrei, the site of an ancient “supervolcano” now inhabited by 360,000 people, and an eruption is closer than volcanologists had previously thought. A huge eruption means huge financial losses for the Italians.

The elections are coming in Italy with the Five Star party looking like a favourite – they are not exactly what we want as a country if you want responsible and careful political leaders in place!

Macron and Merkel cannot be allowed to decide the future of the banking union and of the sharing of weak government’s debt.

There are real threats for Eurozone taxpayers in comments that have been seen in the international media. Here is a recent comment from the FT 11.5.2017:

“Help from outside Italy, meanwhile, requires changes to the way the government and monetary system of the EU is organised. The ECB could carry on buying Italian debt even as it stops purchasing that of Germany, an end to unified and proportional stimulus measures. Eurozone governments could agree shared liability for part or all of the national debt, or to issue collective bonds. The ECB could write off its holdings of government debt.”

The writer then says the obvious, a statement that we do not hear today in Helsinki from any of our ministers,

“The horrified faces which tend to greet such suggestions suggests they would only follow another crisis.”

Read other news on the city site of Helsinki.

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