John Ward credit managers say Italians hid nature of deficit problems., Italy's Prodi branded liar, Prodi says Italy got into Euro through sleazy deal with Germany

SENSATION AS PRODI REVEALS HOW ITALY MADE IT INTO THE EUROZONE


ROMANO PRODI REVEALS HOW A SECRET DEAL WITH THE GERMANS GOT HIS COUNTRY INTO THE EUROZONE

Credit, currency dealer anger as Italy becomes the new EU basket-case

Romano Prodi, the twice-former Prime Minister of Italy, made a public statement just nine weeks ago as follows:

“Investors should be reassured that there is absolutely
no chance of the Greek debt problems spreading.”

I’d say that sounded 100% definitive: the bad news is that it turned out to be 100% wrong. But this morning Slog sources in senior European Credit Management circles revealed that Prodi knew perfectly well via his own contacts at the time that Italy was by far the worst scenario facing those trying to save the Euro.

“He’s a liar” said one, “Always has been, always will be. Just like the Greeks: they falsified their deficit returns. The Italians had no qualms about doing the same. In the end, they’re all conmen…they knew the Eurozone was a gravy-train – they’d have said anything to get in”.

Strong stuff – and equalled by a Swiss-based British currency trader who told us this lunchtime, “It’s going to take a long time for credit markets to forget the untruths and completely misleading statements issued by these people. The Italians have done a remarkable spin job on their own position….but the shit in their machine is unbelievable”.

And in the midst of all this, Prodi popped up on the Bloomberg site this afternoon to ‘explain’ how he got Italy into the Euro:

‘When Prodi toured Germany’s agricultural heartland after becoming Italian leader in 1996, he pitched “a big milk pipeline from Bavaria,” pointing to a three-year, 40 percent plunge in the Italian lira that was hurting dairy sales. “To have Italy outside the euro, a huge quantity of exports from Germany would have been endangered,” Prodi, now 70, said. Germany got the message, allowing entry rules to be bent to create a 16-nation market for its exporters.’

The German leader at the time was Helmut Kohl.

The word ‘sensational’ has been overused by journalists since Rupert Murdoch was a boy, but the ramifications of that statement for German politics – and its high-handed attitude to debtor nations – are incalculable.

It does, however, tend to confirm what UK Eurusceptics have always felt: that the EU is a paper tiger – an origamist’s confection conjured up by corrupt officials – and ‘fixes’ at the very top for those leaders prepared to play the game.

It also hugely confirms the Slog’s FCO piece of yesterday: that the Hague plane heading for Washington ought to be pointed, variously, at Brussels, Berlin and Paris.

Over the last 24 hours, Angela Merkel has been pressing hard on the need for German-led fiscal discipline. On the basis of Prodi’s revelations, it’s beginning to look like her horse is several hands too high.