Italy is not Greece
By Emmanouela Depounti, Attorney at Law, Former legal advisor of Agricultural Bank of Greece SA, Former introducer of Astrobank Ltd (Cyprus).
…And it’ s about time to stop the comparison between Italy’s 10th largest bank, Banca Carige, which has been put under temporary administration by the ECB (European Central Bank), and the Greek banks.
I will not tire you with complex technical terms because I am not an economist but a lawyer. And as a lawyer I can easily see when these complex terms are used to tire the readers or confuse them.
The point is that Banca Carige the latest troubled bank of Italy instead of being bankrupt, since it has severely squeezed its capital adequacy, the ECB appointed three interim administrators in an attempt to rescue it.
Many wonder why ECB did not do the same with Greek banks but instead they were led to bankruptcy.
Initially, the answer is simple: Italy was a member of the original G6, later expanded to G8 and G20, which means it belongs to the world’s most powerful economies.
And it belongs to these groups because it has domestic production in both primary and secondary sector. For example, Italy is the world leader in the branding of coffee without cultivating an acre within the country (!!!). Another example is olive oil. Italy is one of the world’s most powerful olive oil exporters, since the olive oil it produces is not sufficient to meet the needs of domestic demand and is also an importing country for that commodity. We note that, for example, 37.5% of the total Greek production is exported to Italy, where it is processed and standardised and subsequently re-exported as an Italian product.
So regarding a state with a strong economy that exports world-wide products that rank it among the 6 before, 8 and thence the 20 most powerful economies in the world, isn’t it logical to enjoy a completely different approach to the problem that occurred in its banks??
All are chain links….
Depending on the substantial economic reality presented by each state in the global economy, it is also treated in a similar way by the other foreign states, organisations, etc to the domestic economic problems that arise.
Simply put, it is not possible for a healthy person who has flu symptoms to have the same treatment from the therapists as someone else who wants to get sick all the time!!!
It is not therefore logical for Italy which by the consistency and credibility that shows of either its primary production or its secondary production in the world economy, to be treated in the same way as Greece, which has been bankrupted four times and it is on the way to its fifth bankruptcy (if it hasn’t already gone bankrupt)… ..
Where we need to focus is on the causes that have led Greece to the point where it is today, in order to find the most appropriate and sustainable ways of dealing with them. And definitely given the inhibition or the indifference to face up to a constantly growing problem it will never produce an essential solution…
(Disclaimer: the contents of this text is for information only and consists of personal opinion and in no way is an investment consultation, or subscription for participation or non-participation in any transaction. The author is not responsible for any investment or other decisions made on the basis of this information}.