The decline and fall of the Roman Empire

Rome – the city of visible history, where the past of a whole hemisphere seems to move in funeral procession with strange ancestral images and trophies collected from afar.

– George Eliot

The Romans and their empire were at its peak in 117 CE. It was the largest political and social structure of Western civilization. By 285, the empire had become too vast to be ruled by the central government of Rome. It was therefore divided by the Emperor Diocletian (284-305) into a western empire and an eastern empire. Rome eventually collapsed under the weight of its own bloated empire, losing its provinces one by one. In September 476, a Germanic prince named Odovacar took control of the Roman army in Italy. After deposing the last western emperor, Romulus Augustus, the troops of Odovacar proclaimed him king of Italy, thus ending in a despicable way the long and tumultuous history of ancient Rome.

Now, here we are 1543 years later, and the story seems to rhyme again. The names have of course changed, and the innocent want to be protected, but the country is once again overworked and risks being condemned to an ignoble end.

The EU's fourth economy has not failed to comply with the European Union's budget rules, but its government has openly and regularly flouted them. The European Union tried clemency last year and then pointed it out. Now, the European Commission is likely to throw the manual to Rome, and soon, in my opinion.

An EU decision could result in an initial fine of 3.5 billion euros ($ 4 billion) and a tightening of control over Italy 's fiscal policy. Italy could be fined up to 0.5% of GDP and lose loans as well as the purchase of its sovereign debt and a debt undertaken by the European Investment Bank and the ECB. In addition, any plans to issue new debt could be controlled by the European Commission and not by the Italian Government.

Edward Gibbon, in his classic work on the fall of the Roman Empire, describes the declination of the Roman era as a place where "quirkiness masquerades as creativity." We rhyme again here too, as evidenced by the project of Deputy Prime Minister Salvini to issue mini-government bonds with no interest or maturity and in denominations of 10, 50 and 100 euros, which is without a doubt a strange concept.

The plan is to give them to private companies to which the Italian government owes money. The reality of implementing this "mini-bot" strategy is that the Italian government issues its own currency, which would compete with the euro. Salvini even claimed that these banknotes would not increase the public debt, already at 132% of their GDP, because the mini-state bonds would be outside the balance sheet of Italy and would not be recorded in the public debt. The Italian pressure group Confindustria said: "Thinking that the problem of public debt can be solved with mini-bot, it's like trying to solve it with monopolistic money".

The vicissitudes of fortune, which spare neither the man nor the most proud of his works, who buries empires and cities in a mass grave.

– Edward Gibbon, The decline and fall of the Roman Empire

The Salvini crowd has said in the past that these mini-bot could replace the euro as legal tender if Italy leaves the eurozone. Well, "Itexit" or "Itsgone" may be on the way and I would not be discarding the possibility. Last week, the Italian parliament unanimously approved a motion supporting the idea of ​​mini-bot, which leaves you puzzled as to what they envision behind closed doors. Agnese Ortolani, an analyst at the Economist Intelligence Unit, said the vote was "a sign that some personalities, within the ruling party, of the League, might still be working on their plans to leave the party. euro".

Even ECB President Mario Draghi has entered the controversy. Last Thursday, he said that the mini-BOTs "are either money and then they are illegal or they are in debt and I do not think there is a third possibility." Fabio Sabatini, an associate professor of economics at La Sapienza University in Rome, says the mini-bot system makes no sense that it's considered a way to make it possible the exit of the euro from Italy, without making the plan explicit. People like Salvini "create the conditions for a" perfect storm "that would exclude us from the monetary union.The intention is to leave the euro, but without assuming political responsibility, which would be devastating, "said Sabatini.

Justice, humanity or political wisdom are qualities they know too little in themselves to appreciate in others. Value acquires their esteem, and liberality buys their vote; but the first of these merits is often lodged in the wildest breasts; these can only be exercised at the public's expense; and both can be turned against the owner of the throne, by the ambition of a daring rival.

– Edward Gibbon, The decline and fall of the Roman Empire

Salvini is the "daring rival". Italy and the European Union, in my opinion, are either prepared for an internal battle in which various minorities join forces and overthrow the control of the EU, pulling power from Germany and France, or still in Italy. "Enough" and they leave the EU on their own, before or after the Brexit event. "End of game" may be close.

Gird for the battle.

Editor's note: The summary bullets for this article were chosen by the Seeking Alpha editors.