Italy's Economic Crisis Risks Sparking 'Civil War' in Sicily
THE DAILY TELEGRAPH: The misery caused by Italy's financial crisis could spark a "civil war" in the southern island of Sicily, the mayor of regional capital Palermo said on Friday.

"Because of an explosive mix of despair felt by many families and the stranglehold of organised crime, a civil war could even break out," mayor Leoluca Orlando told the economic daily Wirtschaftsblatt.

"Sicily is the Greece of Italy," said Orlando, a member of the anti-corruption Italy of Values party and a staunch anti-Mafia champion.

"We've managed to stay afloat only because we're a part of Italy," he added.

"Many businesses are shutting, families on low incomes can no longer pay their electricity bills," said Orlando, who has been mayor since May. » | Source: AFP | Friday, July 20, 2012

THE DAILY TELEGRAPH: Monti plans 'Greek-style' takeover of Sicily to avert default: Italian premier Mario Monti is mulling emergency action to take direct control of Sicily’s regional government before the island spirals into a full-blown financial crisis, fearing contagion to the rest of Italy. » | Ambrose Evans-Pritchard | Wednesday, July 18, 2012

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EU Austerity Policies Risk Civil War in Greece, Warns Top German Economist Dr Sinn
THE TELEGRAPH: Greece’s austerity measures cannot prevent default and will lead to a breakdown of the political order if continued for long, a leading German economist has warned.

Hans-Werner Sinn, head of Germany's prestigious IFO Institute, said it was impossible to cut wages and prices by 30pc without major riots. Photo: The Telegraph
“This tragedy does not have a solution,” said Hans-Werner Sinn, head of the prestigious IFO Institute in Munich.

“The policy of forced 'internal devaluation', deflation, and depression could risk driving Greece to the edge of a civil war. It is impossible to cut wages and prices by 30pc without major riots,” he said, speaking at the elite European House Ambrosetti forum at Lake Como.

“Greece would have been bankrupt without the rescue measures. All the alternatives are terrible but the least terrible is for the country to get out of the eurozone, even if this kills the Greek banks,” he said.

Dr Sinn said Greece is an entirely different case from Spain and Portugal, which still have manageable public debts and can bring their public finances back into line with higher taxes.

“Greece would have defaulted in the period between April 28 and May 7, had the money not been promised by the European Union,” he said, describing the failure of the EU’s bail-out strategy to include a haircut for the banks as an invitation to moral hazard.

“There should be a quasi-insolvency procedure for countries. Creditors have to accept a haircut before any money flows for rescue plans, otherwise we’ll never have debt discipline in the eurozone,” he said.

Greek society has so far held together well, despite a wave of strikes and street violence in the early months of the crisis. However, unemployment is rising fast and political fatigue with such austerity policies typically sets in the second year. >>> Ambrose Evans-Pritchard in Cernobbio, Italy | Friday, September 03, 2010

”There Will Be Blood”
GLOBE AND MAIL: Harvard financial guru Niall Ferguson predicts prolonged financial hardship, even civil war, before the ‘Great Recession' ends

Harvard author and financial crisis guru Niall Ferguson has landed with a thud in Ottawa, spreading messages that could make even the most confident policy makers squirm.

The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview before delivering a presentation to public-policy think tank, Canada 2020.

Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same.
“There will be blood.”

The Buy America penchant pushed by the U.S. Congress in passing the recent stimulus bill was only the tip of the iceberg.

Abu Dhabi buying Nova Chemicals at bargain-basement prices on Monday is a sign of things to come, with financial power quickly being transferred over to the world's creditors – namely sovereign wealth funds – and away from the world's debtors.

And much of today's mess is the fault of central bankers who targeted consumer-price inflation but purposefully turned a blind eye to asset inflation.

The Laurence A. Tisch professor of history at Harvard University, and author of The Ascent of Money, A Financial History of the World, sat down with The Globe and Mail's economics reporter, Heather Scoffield. >>> Heather Scoffield | Monday, February 23, 2009

The Dawning of a New Dark Age (Paperback – Canada) >>>
The Dawning of a New Dark Age (Hardback – Canada) >>>