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Tremonti: Geithner Rejected
A New Bretton Woods Treaty

Jan. 27, 2010 (EIRNS)—In an interview with Italy's financial daily Il Sole 24 Ore Jan. 17, Italian Economics Minister Giulio Tremonti revealed that his American counterpart, Treasury Secretary Timothy Geithner, rejected a proposal for an international New Bretton Woods treaty, because it would involve "parliaments." Although the Italian minister did not identify Geithner by name, the interviewer did. "When an important politician says that a 'treaty' is rejected because it would go through long parliamentary procedures, that expresses a view different from mine," Tremonti said.

At the onset of the crisis, according to Tremonti,

Two ideas confronted one another: the political idea of a New Bretton Woods and of legal standards, as opposed to the technical idea of the Forums and the Boards [a reference to the Global Stability Forum, which became the Global Stability Board—ed.]. So far, the stage has been occupied by the latter instruments.... Products of doubtful utility have been created, medicine which expired before being tested. What was presented in Italy as a personal polemic [between Tremonti and GSB head Mario Draghi—ed.] was and is the counterposition between two views of the world, two very different ideas of 'what to do.' 

Asked whether government bank bailouts were correct, Tremonti answered:

History will tell ... an alternative was surely Chapter 11: Save that part of finance which is connected to the real economy, to [industrial] firms and families, and let the rotten assets rot. Frankly, I have thought and written that this hypothesis should be discussed.

Tremonti also defended the choice of the Italian government to avoid "social slaughter by cutting back health care," and called for Europe not to relaunch the failed Lisbon Agenda, but to shift towards a Euratom-like approach, on the model of the 1957 agreement for joint development of nuclear energy among France, Germany, Italy, and Benelux, which reflected the pro-industrial approach of European nations before the founding of the European Commission.

On Jan. 25, Tremonti spoke at a closed-door meeting of the Studio Ambrosetti (the group that organizes the yearly international meeting at Bellagio), and, according to an account in Corriere della Sera, he focussed on the world economic situation, He said

we need an international treaty among countries, a pact underwritten by governments and policies, not by banks and finance.