Issue link: https://maltatoday.uberflip.com/i/1135882
27.06.19 14 EURO A mini-BOT is a small de- nomination (mini) Bill of Treasury (BOT) that can be issued by, in this case, the Italian government to act as a domestic currency for set- tling government debts, pay- ing taxes, etc. It would be a parallel cur- rency, which could circu- late freely domestically at a discount to the euro, which would work as a medium of exchange to reflect the reality of the Italian economy better than the euro does. The euro's value is dominat- ed by Germany's economy. And, in short, by being so the euro overvalues Italy's labour pool and undervalues Germa- ny's. Gresham's Law states un- der-valued money is hoarded and over-valued spent. In Ita- ly the euro is hoarded. In Ger- many it is spent. This is why Germany runs such a massive trade surplus against the other members of the euro-zone. Italy (and Greece, Portu- gal, Spain and others) needs a currency that can circulate to properly support domestic trade. By mispricing Italian labour via the euro it keeps the goods produced in Italy uncompet- itive on the world market. Italy's central bank can only issue euro-denominated debt which trades at rates far low- er than it should, enhancing Germany's position. The Italian economy, like Greece's, is also strangled by the cost of servicing its na- tional debt denominated in euros. This keeps the demand for money within the economy high for debt servicing pur- poses and its circulation low. Low circulation equals low trade and a sluggish economy. The EU's budget rules favour paying off creditors first and tending to the Italian econo- my second. The 'austerity' imposed on euro-zone members, because of this mispricing of both the debt and the euro itself, be- comes doubly harsh when the euro rises, sucking the life out of the debtor nation. As the currency rises, the value of the debt rises versus the labour it is a claim against also rises. Then the country's creditors need a bailout, which they get. The debt gets 'restruc- tured' to put the debtor on an even-longer dated hamster wheel of repayment and some of it gets paid off in the form of national assets now trading at a fraction of their real val- ue. The mini-BOT seeks to re- verse this process by allow- ing the Italian treasury to is- sue them as interest-bearing small bills which can be used to purchase goods and servic- es in the Italian market but which will also be redeemable to pay for government servic- es and taxes. Doing this bypasses the euro completely and these will trade at a discount to the euro, thereby setting a proper exchange rate for Italy's econ- omy relative to Europe's as a whole and increasing money velocity. This is what Salvini and Di Maio are in favour of and what they will likely introduce soon. It is imperative that Europe understands what this means for the European Union. It is an existential threat to the current Germany-dominated political order. Critics will say that the main purpose of the euro was to do exactly what it has done since its introduction: create a structural advantage for Ger- man industry through which Europe won't admit the mini-BOTs Italy is in serious trouble financially. is is virtually common knowledge at this point. What isn't common knowledge is its Eurosceptic government led by Lega's Maeo Salvini and Five Star Movement's Luigi Di Maio are preparing an assault on the foundation of the European Union itself to save Italy It is imperative that Europe understands what this means for the European Union. It is an existential threat to the current Germany-dominated political order Matteo Salvini continues to attack Brussels on budget rules, tax cuts and infrastructure spending while soft-pedalling to the Italian people his radical agenda