Is Italy Next?

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Despite being put under IMF monitoring, there is no hope for Italy to receive bail-out money. Borrowing rates are soaring in the country, and word from the G20 summit in Cannes is that there is not enough money left to bail out the large Italy economy. Italy is now operating under the watchful eye of the IMF, which may or may not have been at the invitation of the Italian prime minister Silvio Berlusconi. <--more--!>

Berlusconi has refused to substantiate reports that he is to step down as Prime Minister to allow someone else to form government or to push for early elections. Berlusconi does not have enough confidence in the Italian Parliament to pass the reforms that are being called for by investors to increase growth and cut debt. The President can choose to let a government be formed by technocrats rather than call an election, although a political government can still be formed if a loss of confidence vote passes in Parliament.

A large part of the problem seems to be Berlusconi himself. After being rocked with a number of scandals, Berlusconi barely clings to power. His critics say that he puts his own business interests ahead of the interests of the country. His People of Freedom coalition has failed to produce any policies to try and combat the growing debt, which sits at €1.9 trillion.

The future in Italy looks dim. The European Central Bank has been buying government bonds to try and keep the Italian economy from going over the 7 per cent yield level, which is where both the Portugese and Irish governments were forced to accept bailouts. If the Italian economy succumbs to pressure it is big enough to bring down the entire Eurozone with it. With rumours that Fiat, Italy’s largest private sector employer, may be looking to vacate the country where it has been traditionally based, the Italian economy does not show any signs of looking up.

Harper Gets Tough On Drugs; Supreme Court Saves Insite

In the first weeks of Harper’s majority government the Conservative Party of Canada has started to push for it’s tough on crime legislation.

The new omnibus bill would institute stricter penalties for possession and trafficking of illiict drugs. Under the proposed bill someone growing more than 201 pot plants in a rental unit would receive a longer mandatory sentence than someone who had sexually assaulted a child.

This is comes in sharp contrast to the Supreme Court of Canada ruling this week in favor of keeping Insite, the group that runs a safe injection site in Vancouver, open. The 9-0 decision severely disappointed the federal government, but they have no choice but to comply. The Conservatives will most likely seek a review of the decision, despite the overwhelming evidence that safe injection sites help deal with addiction.

The ruling rejected the government’s stance that safe injection sites foster drug addiction. It also told the government to extend the exemption to Insite staff to protect them from possession and trafficking charges. The judges agreed that closing the facility would violate the rights of addicts living in one of the worst neighborhoods in Canada.

Justice Beverley McLachlin made clear in the ruling that the federal government has a right to set policy, but when policy is translated into state action and law the courts must determine their validity under the charter.

“The discretion vested in the minister of Health is not absolute; as with all exercises of discretion, the minister’s decisions must conform to the charter.”

The ruling could pave way for similar sites in other metropolitan areas.

Gold Rallies as America’s Debt Crisis Reaches Standstill

With gold at a record $1602 an ounce, there is little doubt that the world has lost faith in the global economy. The United States has still not reached a deal to raise its debt ceiling, which may lead to a default on loan payments come August 2nd. The crisis stems from the fact that the United States is one of the few countries that has a statutory limit on its national debt. This creates periods of uncertainty where it is not known if the government will be able to meet its financial obligations. Continue reading ‘Gold Rallies as America’s Debt Crisis Reaches Standstill.’

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