Fiat's European Chief Altavilla Says Italian Market Not Showing Signs of Recovery

Someone correct me if I'm wrong - but aren't we current living 130% above our means - which is down from 140% a couple of years ago?

@OldandSlow Entitlements make "current" almost irrelevant, as bad as current is.

As long as the US dollar is the currency to which everything else is compared to we can keep borrowing. It's not a good thing but, it would be stupid not to use it while we have it. When the reserve currency changes the debt valued in dollar will be worth nothing.

@Onus The US dollar as the strongest reserve currency is nearing the end of its life. That was one of the reasons for the Euro. Just look at what is going on in the world of currencies since the fracturing of the USSR. I would think within 5 years the US currency will not reign supreme. After this weekend you will see a significant change in the Chinese. The effects like the changes that occurred in 1978 when China started to open up took a couple of decades to develop to where they are now. This latest change will be the opening up of its financial, currency, etc markets. China will build on service related industries and not be reliant on export for growth. Also, the Chinese are developing and 'industrial corridor' from the west inland of the country to India. This will have significant ramifications in the wider Asian continent. I think you have to stop being so 'US Centric' and look at what is going on outside of your borders. http://www.businessspectator.com.au/article/2013/10/30/economy/ambitious-china-goes-land-roving

I'm not really sure Al, that the rules in Italy are the problem per se. As I see it, Italy's problem are twofold. Internally, the problem is adherence to those rules. Whenever I here talk of political, tax, labor reform I cringe. Fact is that most modern systems out there are quite acceptable. When you talk reform, there's is never really total reform, just another ladded layer of complexity whose logic often conflicts with what existed before making thins that more difficult. Whne you move the goalposts the game changes and the moving of the goalposts is never neutral. When the goalposts have been in place for a long time, people understand the game. The problem is if they adhere to the rules. he second Italian problem is international. Now saddled with the EU, Italy has to play by what has proven to be a game skewed to benefit some over others. Compound that on the supralevel to the more local level, in the inherent conflicts within, being that the supralevel bears little accountability and you got yourself a problem. Before monetary union, Italy wa getting by and changing bit by bit. Whacked with a monetary union set up to serve others, no wonder trouble has come. Rules are rules and they're never good, bad, neutral or whatever. The problem with rules is changing them all the time. To oversimplify: soccer. The rules are basically the same forever. People understood and played within them to the best of their ability. The interpretation of said rules has evolved overtime, and now follows Europe's lead. That has made the game harder for those like South Americans that used to plame the same game but in a different way. Who's to say who's right or wrong? The fact is that the changing of the goalposts in soccer has favored European play (often with enthusiastic, but mislead South American support). That in a nutshell is what's happening to Italy. They played the game pretty well before, but the rules changed as did interpretations. They are playing a game that is skewed against them. This from a guy with a backgroung in law. I should love rule changes then. Well, from a financial side it's great as changing laws make it easier to make money. But from a philosophical standpoint, I think changing laws all the time, in the way we do it in contemporary times, is harmful to most out there.

@Marcelo I don't dispute that the changing of 'rules' is hard. I'm not stating the removal of 'rules'. But the transitioning of 'rules', the modernising is what I'm discussing. You used the word modern, but in what sense is modern? Do you consider more rules and regulations modern? I see resistance to change, this has to be expected. Change makes us insecure about the future. A realistic regulatory framework is needed, the system most of the "West" is working under is a throwback from the system of 1st world, Iron Curtain and 3rd world mentality. This no longer exists. The 'West' still thinks it reigns supreme, but a who's expense? We are broke. The Italians since Mussolini has had a change of government every 15 months or so. This isn't stable to allow for change to be implemented effectively. Also most of the Mediterranean countries were relatively poor and mismanaged. Since gaining acceptance into the Euro many of these Mediterranean countries had access to their northern neighbours credit rating. Sort of like allowing your teenagers access to your credit card. Until the Mediterraneans countries become accountable for the use of 'others' money they will spend and blame others for their indebtedness. Now the pocket money is managed for them the 'teenagers' (Italians, Greeks, Cyprus, Spaniards, Portuguese) a whining and crying. They only have themselves to blame for poor governess. So much for 'modern' rules.

@Big Al from Oz I'm using modern on a broad sense. Since the establishment of modern democracies, with permanent Parliaments, the temptation to tinker with the rules all the time, for no ggod reason, and while at it, almost by coincidence, benefitting your friends, is just too great. Make no bones about it, I think a strong Parliament is essential to our world, and guarantees us common folk our protections, but I can't say it's a system not pliable to manipulation and essentially fragile. Now I'm not saying rules should never change. Otherwise we'd still be stuck in a monarchial stasis. But rules should only be changed when they're rotten to the core. I don't know if that's the case. The case of Europe is pretty emblematic. The Scandinavians as a whole have not given in to Germany, neither has the UK. they are better off at the moment. I don't think that will last forever, but this state of affairs could be pointed as proof that the rest of Europe was prey to Brussels's siren song. As resistance to change, what change are we talking about? Should we all adopt what been called the Anglo-Saxon model? The EU model? The Chinese? All those changes of government you mentioned in Italy. Yes very bad. Like you said every 1 months or so, a new group comes along trying to establish their agenda. Not stable, weak, and reform-manic. I guess what I'm trying to say is that countries should chart their own course. Following someone else's lead is usually good for the leader and not so much for the rest (Europe's case). Integrate into the modern world, but keep your independence and space of manouver is important. For bigger countries this is easier, but many small countries have succesfully played the game not following anyone's lead. De-regulamentation or over-regulamentation is rarely good. But the sweet spot is very case by case.

Onus, what is stupid is massive debt and even more massive future obligations. It is a recipe for catastrophe, regardless of the bullsht you have been fed about the wisdom of massive government spending and debt. It will not end well. You are young Onus. You are being duped. You are the one who is getting fked. The benefits are all flowing to the older vampires who will be dead by the time you reap the whirlwind. Turning America into Europe has been the goal of the American left for many decades. They have largely succeeded. Now we have massive welfare, an immigration issue you are not allowed to talk about, economic stagnation, low employment, enormous, oppressive, omnipresent government, colossal debt, entitlements we have promised that we cannot possibly pay, a shrinking middle class and socialist class division and bitterness. The left so controls the conversation that you cannot even discuss most of these issues or you will be accused of some character deficit, evil prejudice, or psychological disorder. Because of this, for the first time in our history, we are in decline. It was not inevitable. It was a choice.

thelaine, what while a lot of what you say can be perceived as relatively true, the fac[t is the US is in a very relative decline mostly because you are a mature country. the wild open days of youth, and unrelenting grwoth are behind the US I think. The way ahead is much more difficult and dangerous and I don't know and can't tell you how to do it, but I think it has less to do with government than with the fact that most if not all of America's wide open spaces have been civilized and thusly the margins for grroth and their corresponding high yields are much less at hand. Just saying and I respectfully respect your opinion.

@Marcelo de Vasconcellos Marcelo, You are one in a million. Eu também respeito a sua opinião. Obrigado.

@Big Al from Oz You're missing two things: 1, the Euro might not survive, since the northern countries' insistence on a strong currency impoverishes the southern states, and 2, the US dollar is the main currency for oil transactions. The US has huge reserves of shale oil and the technology to bring it to market. Shale strikes fear into the hearts of OPEC, particularly the Saudis, but all other industry-based countries. An energy self-sufficient America not only makes the 8-10 million BPD America imported available to market (lowering the price), but energy will be so cheap in America that energy intensive industries are already moving operations back to the US, where even the cost of labor has become much more competitive. With low cost energy and labor restoring America's industrial base, and the lack of another country with a currency/economy strong enough to take over, will keep the US dollar the reserve currency for the foreseeable future.

Listen you useless Australian, Italy is Europe. There is no Europe without Italy. The hunnic germans and whatever anglo-saxons are is not real Europe, and they will always fail. So called Northen europeans, here in Canada are falling to pieces, and are on welfare, and make horrible enployee's. Italy is the eighth econimic power in the world, and europe's 2nd manufacturing power. And they did it all with out dirty arab blood money, unlike germany & england's silent investors. What Fiat need's is Qatar, or who ever is behind volkswagan, or bmw. And when it comes to wealth, Italians in general are about three times richer than their German counter parts. But I am sick seeing lazy left wing anglo-saxon, german loving nutbars, commenting on Italy, And calling it South Europe or ‘Mediterranean’. No we are Europe. You are a bunch of huns, & don't belong in Europe. Maybe you should move back to china.

@FrankCanada Zveria? Great to hear from you. Yeap, Italy is doing fine ;)

@Lorenzo If the Euro doesn't survive the the Mediterranean countries will have massive a re-alignment. Several countries in the EU will then rise. The Germans will become less competitive. Debt still has to be paid down or written off. Shale oil isn't the nirvana that most in the US think it is. How many other countries have large deposits of shale oil and gas? So, the advantage for the US is reduced. The US still has to compete on the global stage. I have never stated the US will not be a huge global market, just reduced relative to the past. The US will encounter a similar experience as the British. It will take several decade for the change to occur. Changes for such a large influence like the US will not happen overnight. Change in the US will be hard for some. Control of trade is what gives a country power. The reduction in the amount of trade or the control of high value trade a country has the less influence it will have.

@Marcelo We have to adapt to change that permits growth. But this growth might not necessarily be centred around OECD economies, like in the past. It's inevitable that our standard of living will drop or stagnate as we have to share the globe's resources with others. I think this is the issue that is affecting most. Learning how to adjust to near zero growth and to share with others. OECD economies have become too dependent of growth at their beckoning, now the OECD represents only 50% of global wealth and are becoming more reliant on others. These others are also competing for the same resources. This balance of global GDP will tilt more and more towards the 'others'. The 'others' are developing their economies around the future available resources, not like us who are living in economies based on the 'good old days' in the past. We need to adjust. This pressure on resources will increase significantly over time. Look at the price of oil. In the past when the 'West' sneezed the price of oil dropped. Now it still is being sold when we have the flu. OECD companies have to find other avenues for income and not rely on governments to continue protecting and subsidising them. We can't afford it. A country like Brazil has large potential for growth and improvement, it will occur ever so slowly. You guys will eventually have a similar standard of living as us in the 'West'. Even if Brazil has huge debt and can't meet it obligations again there is still a huge amount of room for development in the future. We OECD economies have little room for growth.

The area around Milan is one of the richest areas in Europe and living within your means is a recipe for recession.

@Big Al from Oz First time I have ever been called "US Centric." My post was from a direction i never take. The first paragraph is pure sarcasm. It's sort of taking a conspiracy theorists view point. Who knows it may happen. It's true but i do not think that's what we should do. I'm conservative when it comes to monetary policy. Personally i like to be optimistic. The truth is we humans are bad at predicting the future anything can happen. I'm well traveled a lot so my view isn't from my american viewpoint. I see it from every direction.

@thelaine This is not my view point! It was totally sarcastic! I think we should reduce debt. I'm a fiscally conservative. As in we shouldn't spend more than we receive. Personally my feeling is taxes need to go up and there is plenty of room to do so and we will still have lower taxes than Europe and no deficit. Instead of fighting about getting rid of the limited social programs we have now. I personally think we should have better general social programs like medical leave, maternity leave, more vacation time. But, someone always pays and if we aren't paying for it we aren't getting it. I guess now i show my socially liberal side. America is nothing like Europe. For those who are well traveled you will figure this out in 2.5 seconds. America by far is still every man for himself, low taxes, and limited government in comparison.

@Onus Europe is not a good example to follow except of Germany. Europe is a dying continent. I see the future of Europe to be bleak, essentially gradual decay. Demise of Europe was consistently predicted for 100 years now. I do not know how many times we need to say that but socialism does not work - it is a path to a gradual decay. Of course there are countries like Germany or Japan who are well organized and disciplined but even they suffer population decline and lack of growth. I feel very sorry for Germans and Japanese. US should measure itself against China, forget Europe and Russia. When eventually money run out all social programs will be cut to bone. No country can support so many people who do not work but consume like there is no future. There is simply no way around it. Yeah and taxes will go up to 90% for those who work.

@thelaine I can tell with the UAW adopting German style socialism.

Not as much as they love Africa. So they in unison with Euro lefties have decided that Italy should passively host and protect the hordes of north African "asylum seekers" invading by boat, even to the point of staging public "mourning" ceremonies and funding rescue/recovery attempts when they capsize.

@Old Man Pants I love it when people and governments throw money at people who don't have any right to it. It's my favorite. /sarc

@Corey Lewis That practice stops when governments run out of other peoples' money.

@CoreyDL Apparently the ED's comprehensive efforts to order your priorities were insufficiently comprehensive. For remedial sensitivity and mind-rightness information and training please visit: www.ed.gov Don't be left behind.

@Old Man Pants lol

@Big Al from Oz The uaw has always been socialist from the beginning. The labor movement is based in the early 20th century progressive movement.