This was largely ignored by the “experts” because why bring attention to something which is fundamentally a devastating break in the narrative that “Europe is fine” and the financial crisis is now contained.
Fast forward to today when Europe is once again not fine, only this time one can’t blame Europe’s problems on Greece (instead the same “experts” are trying to blame everything in Brexit), when in a surprising admission of reality, none other than Italy’s prime minister Matteo Renzi, “went there” and slammed Deutsche Bank as the true “derivative problem” facing Europe.
To be sure, Renzi has his own problems, chief among which is how to pass a banking bail out of his insolvent banks without implementing the dreaded bail in mechanism unveiled in 2016 as the only permitted European bank resolution mechanism. Alas, in his push to bail out rather than bail in Italian banks, Renzi has faced stiff resistance from the Germans, namely Angela Merkel and Wolfgang Schauble who have both strongly opined against this kind of backtracking. Just today, Wolfgang Schaeuble, speaking at a news conference in Berlin (just hours after Italy hinted once again at an imminent bailout of Monte Paschi), said his Italian counterpart Pier Carlo Padoan told him that Italy intends to stick to the banking-union rules. Perhaps not.
So it is not surprising that when faced with stiff resistance from the Germans, Renzi decided to call a spade a spade when, as Reuters reports, he said that the difficulties facing Italian banks over their bad loans are miniscule by comparison with the problems some European banks face over their derivatives.
Read the Full Article: Source – Zero Hedge
Time For Truth: (Zero Hedge) – A Furious Italian Prime Minister Slams Deutsche Bank As Europe’s Most Insolvent Bank