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Italy At Odds with EU over Anti-Russian Sanctions and Bail-In; MEP Zanni Insists on Glass-Steagall Now

Dec. 10, 2015 (EIRNS)—The Italian government has moved into conflict with the British Empire/EU on two strategic fronts: Russia policy and bail-in. On Dec. 8, Italy vetoed a decision to automatically renew sanctions against Russia at the EU permanent ambassador council meeting. Italy wants to have a discussion, which will take place either at foreign ministerial level or at heads of governments level.

The Italian move follows reiterated statements by Prime Minister Matteo Renzi that he does not want to join the anti-Russia "Western coalition against terror," and comes in the aftermath of another conflict in which Italy opposes the European Commission:

The EU Commission is threatening Italy with a legal procedure against the recent bail-out/bail-in of four banks. The Commission insists that the solution adopted by the Italian government constitutes "state aid." This, because in the attempt to avoid a complete bail-in, the government de facto financed a bank bailout through tax-relief measures.

However, the government has clumsily implemented a partial bail-in, seizing subordinate bonds from retail customers who often had invested all their savings in those bonds.

As those customers realize that they have lost all their money, the protest is mounting in the country, and a general run on deposits is feared. The Italian case should be a warning for all EU member states which have adopted the bail-in regulations.

Yesterday, a pensioner who had all his savings in bonds and in gold, and was left with nothing, committed suicide in Rome.

The EU Commission is ignoring the social and human devastation caused by its policies, and insists that Italy should extend the bail-in, canceling what it considers to be state aid (bailout).

It has been revealed that the Banca d’Italia opposed the European Commission, and wanted a bailout using money from the Deposits Guarantee Fund. The EC instead wanted a full bail-in, including owners of ordinary bonds. This would have involved over €2.4 billion in bonds and a total of €12 billion in unprotected assets.

The government compromise solution has left everyone dissatisfied. Now, in response to protests, Rome is proposing to compensate the most urgent cases with welfare measures.

Managers of the new bridge banks (the bailed-out/bailed-in banks) will receive an annual income of €2.4 billion altogether.

Today, even a liberal economist such as Francesco Giavazzi in Corriere della Sera, lambasts Italian lawmakers who have approved the bail-in legislation in the European Parliament.

Indeed not all members of the European Parliament (MEPs) voted for the bail-in. MEP Marco Zanni, of Italy’s M5S group, has led the fight for Glass-Stegall. In a statement yesterday, Zanni again reiterated that

"to avoid new systemic crises, the proposal ... is to implement a modern Glass-Steagall Act, through a clean and mandatory separation between traditional credit activities and speculative and investment banking."