Imagine of John Lennon and Charlemagne’s holy prostate.

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

But let's go to the Recovery fund.

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

And it is for this reason that, if you already know that a "thing" that has a total budget of one billion euros arrives in port, immediately the small countries that are of no use to shit arrive to ask for a slice of the cake. And they will do so using their veto power.

If it had not been clear that the thing would have gone through, 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 arises only when things are done, because the buffer states arrive that say "and what do I gain from it?" , like any Cetto.

And in the end the bribe was paid to them: one billion here, two hundred million there, in the form of discounts on the share they pay to stay in Europe. To tell the truth, to fight for a decision that divides a trillion and to bring home one-two billion, if not a few hundred million, is exactly a poor figure .

And in my opinion Conte has greatly ennobled Rutte: the correct answer would have been "listen, ciccio, let's do as we do in Amsterdam, tell me how much you want to puppare here, 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 it, and there is nothing better than defeating a lizard and passing it off as a dragon. But really, a negotiation that starts with Germany, France, Italy, Spain, Portugal and Greece aligned, could it have failed? .

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

Having said that: who hunts money?

When it comes to EMS, no one, in the sense that it is a loan. If it comes to the recovery fund… also. 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. The guarantees are provided by the countries that create the fund.

And this means that, like any fund that issues bonds, it then has to finance them: at some point the underwriters of the bond will want the meat, or rather they will want interest to be 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 underwriters want to get out of it, someone will need to give them the cash back. 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 to the nations, changes little.

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 is entitled 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 they are sovereign, just like cosplays exist. A hobby like any other.

If you talk about the government, it's a catastrophe. Taking out a loan to invest 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 green, health, education, costly reforms of the state, etc.

Here the buffer states will return asking for things to let projects pass. The Visegrad states will ask to be able to do a little more fascism, Holland will ask for two or three pennies for drugs, and every time there will be negotiation. 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 junk that makes up the government will start stammering that they never explained this in class, and that the dog ate their notes. And that wasn't on this year's program.

So I don't think it will do the government any good: in all probability the government will convene confindustria, the cat and the fox telling them "let us have the projects".

Personally, I believe that it will be the umpteenth cash of the south, which will orient Italian business to the request for funds, distracting it from the real economy, which will pay off really badly in a couple of years, once the pandemic is over.

Are there any winners? The first is Germany, which manages to obtain a European budget, and not a simple cash register as it was until now. This means that a huge step forward has been made in European political construction. And it is not possible that it is just "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 maturity of ten, twenty years is to be considered "temporary".

Nor can the recovery fund be temporary, since it is financed with bonds that have maturity: to close it you would have to pay the bonds to the investors. So even the Recovery Fund will remain for at least a decade.

Those who say that it is an emergency or temporary measure has forgotten to deal with reality: something that lends money with a ten-year maturity cannot disappear in one or two years, with the coronavirus.

So Germany won, together with France, in building a political embryo of a European budget. And in building a practice. This is not going to please Trump, Putin and Beijing. For Beijing it is an opportunity, but for the other two it is a big problem. 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, not even Rutte won. Rutte's aim was to stop the sovereignists with a rational argument, “not a single cent for Italian waste”, but it is a simplistic program. What it has achieved is the possibility of "escalation" to the council of heads of state (if the council of finance ministers does not work) if it does not approve the spending direction. At that point, Rutte hopes to be able to reach a qualified majority to block any unwelcome spending.

Let's take an example just to say: Holland today is very strong in indoor vegetable cultivation. 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” we need a nice program of investments 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 taking him to the council of heads of state, but would need allies to reach the 55% which is needed for a veto.

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

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

Not even the heads of the Visegrad countries won, but they did not understand 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 no hat to national ones. From now on, 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 actually 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 table. And his successor, which is speculated will be Söder, will be forced to manage the legacy in order not to be overtaken by other competitors in the party.

The rest is simple narrative.