SPY FINANZA / From France and Germany the appetizer of Italy’s autumn crisis

Honestly, I think that a reader in these few days of the electoral campaign that has come to life is already sickened by words, proclamations, promises, provocations. And I fear that the worst is upon us, because when – more than a month after the vote – the Quirinale is already bothered with a slippery tackle worthy of the rougher Costacurta, the situation can only get worse. If not completely plummet.

Well, I will therefore leave it to a few graphs and as many figures to give you an idea of ​​what awaits us a few weeks from now. So that you can prepare yourself, given that the election campaign is talking about everything, except the one topic that will become deadly and watershed in deciding who will overcome the worst recession since 2008 and who will have to ask for help. Binding themselves completely and mortgaging their own future.

Look at these two images, fresh from publication and concerning Germany. The first shows us the cost of moving diesel by barge along the Rhine, as you know, struggling with an epochal drought and which is putting its total navigability at risk, after having reduced it by more than 60% of the total capacity by at least one month. To the stars.

The second image instead shows what happened yesterday morning at the European Energy Exchange, the European energy exchange where futures contracts are traded. Well, the one related to the one-year electricity contract in Germany hit an all-time record of 455 euros per MWh. Simply unmanageable for an energy-intensive economy like the German one: in fact, Berlin is already paying for an autumn that will see planned detachments and productions that will have to operate on shifts and periods of forced shutdown. What this means for GDP is easily understood. What name this dynamic takes when combined with that of skyrocketing inflation is equally intuitive: deflation.

But that’s not enough. Because this other image shows us what else is disturbing to the Energy Exchange at the same time: the same type of contract but related to the French market has also risen to an all-time high, but even by 622 euros per MWh. And gentlemen, let’s talk about the nation that – thanks to nuclear power – has suffered the least from the expensive bills so far. And that, once the criticality was substantiated, saw the Government intervene immediately to limit the increases to the maximum, the ceiling at 4%.

And that’s not enough, Paris always has just renationalized Edf, in fact sending years and years of chatter about antitrust, state aid, competition and so on to the cellar. The reason for that leap, in addition of course to the initial unresolved issue of Russian gas? French rivers are totally dry, in some cases even lower than those of the Rhine. And that water is used for cooling nuclear power plants. Which, to date, throughout the national territory are operating at less than 50% of the total. Of course, all problems that can be solved for natural way, that is with the arrival of the rain. But how much will it rain? And, above all, how long will it take before we offset the enormous damage that has already occurred?

In short, as in golf, the German and French economies will start at a handicap towards the two second quarters of the year. It’s ours? Given the heavy dependence of our mechanical and subcontracting divisions towards Germany, we have now to take into account a delay of three months. That is, there is a strong risk that the macro and employment tsunami will hit Italy between October and November. Exactly when the new government is about to take its first steps, therefore in the most delicate moment of a legislature. And with the ECB which, barring catastrophes, will continue its rate hike process, capable – through its increase in the cost of credit at all levels, from mortgages to loans – to offset the negativemethadone effect of reinvestment securities to keep at bay the spread.

But the real economy is something else. Factories, laboratories, warehouses need light and gas, energy. And credit to pay exorbitant bills, as well as to try to overcome the difficulties by having enough cash to pay salaries, taxes and suppliers, in the face of cash flow under stress.

Everyone can think what he wants on the Ukraine question, everyone can take sides with one or the other side. But if Europe does not decide to sit down and find mediation, the economic consequences will be devastating. Because to date, Russian flows are reduced but not zeroed. And are we already in these conditions? If weapons continue to arrive in Kiev, how long will it take for the Kremlin to decide to use the final option?

Not surprisingly, the US has just allocated an additional $ 5 billion package for Ukraine, including armaments and financial support. The freezing of all charges on foreign debt for the whole of 2023 has been obtained for Kiev. Not surprisingly, Zelensky seems to be suddenly revived and the other day he deliberately crossed the red line, speaking of Crimea which will be reconquered. Not surprisingly, nuclear Russian roulette is being played around the Zaporizhzhya.

Everyone thinks how they want, but everyone must be aware of what the potential risk is in front of us. And opposite, now it means tomorrow. Indeed, almost today.

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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