Imagine by John Lennon is the holy prostate of Charlemagne.

I know the title doesn't say much, but it seems fashionable to attribute abstruse meanings to this song, and a post on the Recovery Fund seemed to require it. It seemed right to Giorgia Meloni too, so in the end you can consider me a trendy guy.

But let's go to the recovery fund.

First of all, one thing needs to be clarified: if Italy, France and Germany throw a proposal together, and we know that Spain and Portugal and Greece support it, we know very well that it will go through. From the beginning.

And this is why, if you already know that a "thing" that has a total budget of one trillion euro arrives in port, the small towns that do not serve a shit immediately arrive, to ask for a slice of the cake. And they will do it using their veto power.

If it had not been clear that the matter would have been successful, the "frugal" would have been in their place. It is a "political constant" of Europe: when there is heated debate, it is because an agreement will be reached, and the more heated the debate, the more certain it is that an agreement will be reached. . When there is no debate, it is well known that nothing will come of it. Nobody wastes time fighting. In short, the discussion starts only with things done, because the buffer states arrive that say "and what do I get out of it?" , like any Cetto.

And in the end they were paid the bribe: one billion from here, two hundred million from there, in the form of discounts on the share they pay to stay in Europe. To tell the truth, fighting a decision that cubes a trillion and taking home one-two billion, if not a few hundred million, is exactly a poor thing .

And in my opinion Conte has ennobled a lot of Rutte: the correct answer would have been "feel fat, let's do as we do in Amsterdam, tell me how much you want to puppet here, that we have to work". He would have said "two billion and two hundred million", which is in the end 2.2 per THOUSAND of the sum at stake, they gave him and he sucked everything he was told to suck. End.

Evidently someone needed to give an epic narrative to the thing, and there is nothing better than defeating a lizard and pretending to be a dragon. But really, a negotiation that starts with Germany, France, Italy, Spain, Portugal and Greece aligned, could have failed? .

So congratulations to the director: he pulled a big movie out of a shitty plot. The whole world stayed watching porn until the end , and there was also suspense . And the culprit was the butler.

Having said that: who hunts money?

If we talk about EMS nobody, in the sense that it is a loan. If it's the recovery fund… too. If someone is familiar with a cash flow, he knows well that the "non-repayable money" must be financed using a bond, which has underlying guarantees. Guarantees are provided by the countries that create the fund.

And this means that, like any fund that issues bonds, then it must finance them: at some point the underwriters of the bond will want the flab, or they will want an interest paid. They will want real money, not guarantees. So you will need to start paying the interest money. And if this fund has stopped making sense, (say ten years after the epidemic) and the subscribers want to get out of it, someone will have to give them back the cash. Bonds work like this.

So, immediately the money goes to "non-repayable", but then the cash flows that serve to pay interest and repayments will begin. Whether this is done from the European budget (which in turn comes from the nations) or directly from the nations, little changes.

Ultimately, very far away, the money that arrives is a very complicated credit swap , which in the end does nothing but transform a loan into an asset, but in the end then the hole must be filled.

Having said that, has Italy lost or gained?

It depends on what you mean by Italy.

If you talk about the league, it's a catastrophe. Assuming that Italy really takes 209 billion euros in any form, it has the right only if, and for as long as, it is in the EU. If it gets out, those 209 billion would have to come back, and would be part of the exit deal. And in the case of a no-deal, they would be the legal pretext for applying duties: if you consider that Italian exports to Europe are around 200 billion, it means a 100% duty on the entire export to the EU.

Ultimately, when Italy has taken the money, it will no longer be able to leave the EU, except at the price of the entire chain of exports from Northern Italy . The history of Italian sovereignty, in fact, ends here. They will continue to say that they are sovereign, exactly as cosplay exists. A hobby like any other.

If you talk about the government, it's a catastrophe. Taking a loan to invest in it means having a plan . Why investing is not spending: investing means that the loan is paid in value, and then it makes more money than the interest. But a 209 billion investment plan is a HUGE plan, far beyond the intellectual capacity of the current government, which does not even have the infrastructure needed to understand what the country needs.

Moreover, the funds are not simply sent by letter: they must be requested and the project must be approved. There are no strict conditionalities, but they must be in line with European priorities, which means greens, health, school, expensive state reforms, etc.

The buffer states will come back here and ask for things to let the projects pass. Visegrad states will ask to be able to do a little more fascism, Holland will ask for two or three pennies for drugs, and there will be negotiation each time. In practice, a continuous shower of humiliations, which will have to be repaid by the return on investment.

But unfortunately, the government is not planning investments , as they speak they are planning spending . Personally, I believe that when someone asks them to plan investments for 209 billion, the pile of jokes that make up the government will begin to stammer that this was never explained in class, and that the dog ate his notes. And that was not on the program this year.

So I don't think it will do the government any good: in all likelihood the government will summon confindustria, the cat and the fox to tell them "let us have plans".

Personally I think it will be the umpteenth cash at noon, which will direct the Italian business to the request for funds, distracting it from the real economy, which will pay really badly in a couple of years, after the pandemic is over.

Are there winners? The first is Germany, which manages to obtain a European budget, and not a simple cash as it was up to now. This means that a huge step forward has been made in European political construction. And it is not possible that it is only "a temporary thing" or "an emergency solution", because if it were something that disappears in a year, all the money would have to be returned within a year . You cannot hope that a thing that lends money with a ten or twenty year maturity will be considered "temporary".

And even the recovery fund cannot be temporary, since it is financed with bonds that have an expiry date: to close it, you would have to pay bonds to investors. So even the Recovery Fund will remain for at least a decade.

Who says it is an emergency or temporary measure has forgotten to deal with reality: a thing that lends money with a ten-year maturity can not disappear in one two years, with the coronavirus.

So Germany won, together with France, in building a European budget political embryo. And in building a practice. This will not please Trump, Putin and Beijing. For Beijing it's an opportunity, but for the other two it's a big deal. It means that any hypothetical trump duty damage could do, the EU could safely start a similar Resilience Fund, fund the victims of American duties, and the duties would fall on deaf ears. Or they could reuse Recovery for the purpose.

Did Rutte win? No, Rutte didn't win either. Rutte's aim was to stop sovereigns with a rational argument, "not a single cent for Italian waste", but it is a simplistic program. What he got is the possibility of "escalating" to the council of heads of state (if the council of finance ministers doesn't work) if he doesn't approve the spending direction. At that point, Rutte hopes to reach a qualified majority to stop any unwanted spending.

Let's take an example just to say: Holland today is very strong in the indoor cultivation of vegetables. Let's also say that the technological agriculture sector is THE sector: to be clear, in Europe Holland sells more tomatoes than Italy. Now let's say that Italy, or France, or Spain, decide that under the heading "green economy" it takes a good investment program on sustainable indoor agriculture, if only academic research. In practice in the medium term it would be creating a competitor to Dutch companies. In that case Rutte would try to stop everything by climbing it to the council of heads of state, but would need allies to reach the 55% that serves a veto.

But this possibility is absolutely theoretical, in the sense that very few countries share the same interest in high-tech indoor agriculture. All this, in short, will be a theoretical victory that the Dutch populist voters will not understand.

All they can do, most likely, is to threaten to lengthen the time with an appeal, and ask for a tip to not do it. Which, you will see, will happen.

Not even the leaders of the Visegrad countries have won, but they have not understood the point: from now on the EU will build common budget mechanisms. It means, in short, that they can no longer behave like passengers: from now on political decisions are not a hat to national ones. From now on the Poles will have to worry about how money is spent, not just about having subsidies: because if someone receives subsidies and uses them to help their industry, in a sector that competes with Poland, there is a problem. It is not the usual European budget that in fact redistributes wealth as cash flow, we are talking about a budget that is used to do things .

In short, in the end Merkel will retire with a nice medal collection. And his successor, who speculates will be Söder, will be forced to manage the inheritance in order not to be overcome by other competitors at stake in the party.

The rest is simple narrative.

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