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Italexit, Belt and Road Discussed
at ‘Future of the EU’ Conference in Brussels

July 2017

Marco Zanni, Head of Movimento 5 Stelle (5 Star Movement, M5S) delegation in the Economic and Monetary Affairs Committee of the European Parliament.

June 29, 2017 (EIRNS)—An international conference on "The Future of the EU/A New Model of Cooperation Among European Sovereign Nations" took place on June 28 at the European Parliament in Brussels. Host Marco Zanni, a Member of the European Parliament from Italy, brought together international experts and politicians to discuss alternatives to the failed system of the European Union.

Panelists Alberto Bagnai from the University of Pescara; Liz Bilney, CEO of the organization Leave.EU; Lega Nord economist Claudio Borghi; Michele Geraci head of China Economic Policy Program (Nottingham) and University Business School (Shanghai); and Giandomenico Majone from the European University Institute in Florence, engaged in discussing what Zanni described in the introduction as "different modalities of cooperation among European countries." The panel presentations were concluded by an intervention by Matteo Salvini, head of the Lega Nord party. Before Salvini’s remarks, Harley Schlanger read a message of support to the conference sent by former Trump campaign advisor Roger Stone.

The main goal of the event, Zanni said, was to "open a debate and challenge the rhetoric according to which the EU is the only possible framework for cooperation among European countries. We do not believe in the TINA (There Is No Alternative) rhetoric, and we will show the European people that there are better modalities of cooperation. The EU is failing to offer prosperity, cooperation and peace to the European people. So, it is now time to think about alternatives."

The most interesting presentations were the ones given by Professor Bagnai and by Professor Geraci, the former presenting an original model to assess the economic effects of leaving the euro on the Italian national economy, and the latter on the policy behind Chinese economic development.

Bagnai debunked terrorist scenarios offered by pro-euro propaganda and even academicians, some of whom went so far as to forecast a 40% collapse of the Italian economy if Italy leaves the euro—as in World War II!

He presented two scenarios: a "Base Case," in which Italy leaves the euro and does not change its economic policy; and a case of Italy leaving the euro and implementing counter-cyclical policies. Such policies, however would be minimal: just re-establishing the quota of public investments at the pre-crisis levels.

In the Base Case, it was shown that Italy’s output has an immediate drop, but it recovers in a few years. In the second scenario, output starts to rise immediately and reaches a 4% growth in two to four years. Bagnai demonstrated that there would be no hyperinflation.

The euro is going to implode, Bagnai said. Therefore

"it is a criminal act not to study a phenomenon that will occur with certainty. The ’Fathers of Europe’ have built a hotel without emergency exits."

"There are two certainties on Europe," Bagnai said: "1. It will end; and 2. Those who run it do not know what to do. This is tragic.

"We have such an incompetent leading class because of the media," Bagnai continued. "The media are the biggest enemies of democracy."

We must get rid of the euro in order to regain "the freedom of implementing economic policies, a freedom which is being denied to us," Bagnai passionately stated.

Professor Geraci, who lived in China for 10 years, presented a picture which "is not well-perceived in Europe." China’s fight against poverty is a fantastic success, he said. Per-capita income in China has grown 100 times in the last 40 years. China intervened powerfully with a dirigist policy when it realized that manufacturing growth had been zero that year, and introduced its China 2025 plan in May 2015. Immediately, production zoomed again. The Chinese government is governing the process of internal migration, with a yearly migration plan, choosing how many people and who is allowed to migrate from the countryside to the cities.

As good as his picture of China’s development was, however Geraci warned that through Belt and Road Initiative (BRI), China will be able to invade the west with exclusive high-tech products which its industry is already developing.

Claudio Celani intervened at the beginning of the question-and-answer period, introducing himself as vice president of Movisol, which is the Italian section of the international LaRouche movement. He addressed Geraci’s presentation, rejecting the idea that China could be a threat, and insisting that the BRI policy is a new paradigm and a chance for development. BRI represents exactly those counter-cyclical policies which Professor Bagnai had advocated in his presentation, Celani said, and reported how in 2011 the Chinese had proposed to the Italian government to help build infrastructure to make Sicily become "the Manhattan of the Mediterranean," including ports, airports, the connection to the Italian mainland through the Messina Bridge, and high-speed railways.

Professor Geraci responded positively, thanking Celani for the intervention that allowed him to make a distinction between trade policies and investment policies. On trade policies we must watch out, and be able to defend our products, he said. On so-called "greenfield Investments, they are welcome, because they create jobs, develop infrastructures etc." China is the only country in the world that can mobilize capital, manpower, raw materials and knowledge all together, Geraci stressed. Whereas Italy has discussed for over a century building the 2-kilometer Messina Bridge, but not built it, "In Shanghai, where I live, they built a 32-kilometer bridge over the sea." Another example: When there was the severe earthquake in Sichuan in 2008, causing 100,000 deaths, the earthquake area was in the countryside, a four-hour drive plus mules, "they picked up a project for two tunnels, and in three months they built the equivalent of the Mont Blanc tunnel, two times 10km."

These are the kind of projects we should support, Geraci said, and thanked Celani again for the question.

In private discussions, it became clear that other speakers had more backward views towards China, which are basically due to a wrong understanding of economics. This shows that "populists" must be educated. The Brussels meeting was an important step in this process.