The Germany-Bashing And Conspiracy Theories Of Berlusconi's Comeback

Merkel and Berlusconi 2009
Merkel and Berlusconi 2009
Florian Eder

BERLIN - Silvio Berlusconi, Italy’s former Prime Minister who harbors ambitions to return to his old job, has had a year to adjust reality to his private world view. And now he’s letting fellow Italians and Europeans know how he thinks.

The widening of the Italo-German government bond "spread" shortly before his government fell last year was a "trick" specifically designed to remove him from power, Berlusconi said in an interview on Italian TV’s Canale 5 earlier this week.

The Italians can look forward to some lively months ahead, until the parliamentary elections in February or March that will also determine the next head of government. (According to Reuters, Berlusconi hedged Wednesday night on whether or not he will run, though few can imagine him stepping back from the spotlight.)

Earlier in the week, the 76-year-old declared that Germany "ordered all its banks to sell all the Italian bonds they were holding." A harsh enough accusation, but there was more to come: "And then American and international investment funds thought, if Germany is selling, there must be a reason behind it – and they started selling too.”

Nor is Italy’s 2012 debt, which the European Commission puts at 126.5% of economic output, a reason for market concern: in reality it is "not that high at all."

Berlusconi’s affirmations are not only an attempt to photo-shop the shortcomings of his period in office – the attacks aim to hone conspiracy theories among Italians and hit them where they are particularly vulnerable: their pride in their country, which many – and not only Italians – think is the most beautiful on earth.

By suggesting intrigue on the part foreign powers – headed by Germany – or the financial markets, Berlusconi is making a bid to win back popular support after suffering what the polls say are dramatic losses that have him lagging far behind.

In another tack, Berlusconi accused his successor Mario Monti of bending to Berlin’s will and hence "creating a crisis situation that is worse than it was when my government was in power."

He, Berlusconi, had always resisted complying with German wishes. "When I was representing Italy, I was one of the two or three heads of government with the most authority," he claimed.

Berlin bites back

By the watered-down rules of diplomatic communication, German Foreign Minister Guido Westerwelle’s reaction to Berlusconi’s remarks bordered on outrage: the German government does not accept "Germany being turned into an object used for the purposes of conducting a populist election campaign. Neither Germany nor Europe are the cause of Italy’s present difficulties."

For her part, Chancellor Angela Merkel stated: "I support the reforms implemented by Mario Monti’s government" and noted that there was renewed investor confidence in Italy now and that the Italian people were sure to vote for continuing to keep Italy on the right track.

The spread that Berlusconi described as an invention has decreased on average since he left office. It already existed during his lively years at the helm, he just didn’t give it any attention.

But who’s expecting honesty from a sales pro who has just launched an election campaign, especially when he owns a media network. What he’s not saying is: the "trick" is real all right, and it’s costing the country a lot of money.

"Just what we needed," a northern European government representative remarked – without irony – about Berlusconi being back on the political scene: "Since last weekend, his comeback announcement has cost Italy something like 7 billion euros."

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Debt Trap: Why South Korean Economics Explains Squid Game

Crunching the numbers of South Korea's personal and household debt offers a glimpse into what drives the win-or-die plot of the Netflix hit produced in the Asian country.

In the Netflix series, losers of the game face death

Yip Wing Sum


SEOUL — The South Korean series Squid Game has become the most viewed series on Netflix, watched by over 111 million viewers and counting. It has also generated a wave of debate online and off about its provocative message about contemporary life.

The plot follows the story of a desperate man in debt, who receives a mysterious invitation to play a game in which the contestants gamble their lives on six childhood games, with the winner awarded a prize of 45.6 billion won ($38 million)... while the losers face death.

It's a plot that many have noted is not quite as surreal as it sounds, a reflection of the reality of Korean society today mired in personal debt.

Seoul housing prices top London and New York

In the polished streets of downtown Seoul, one sees endless cards and coupons advertising loans scattered on the ground. Since the outbreak of the pandemic, as the demand for loans in South Korea has exploded, lax lending policies have led to a rapid increase in personal debt.

According to the South Korean Central Bank's "Monetary Credit Policy Report," household debt reached 105% of GDP in the first quarter of this year, equivalent to approximately $1.5 trillion at the end of March, with a major share tied up in home mortgages.

Average home loans are equivalent to 270% of annual income.

One reason behind the debts is the soaring housing prices. In Seoul, home to nearly half of the country's population, housing prices are now among the highest in the world. The price to income ratio (PIR), which weighs the average price of a home to the average annual household income, is 12.04 in Seoul, compared to 8.4 in San Francisco, 8.2 in London and 5.4 in New York.

According to the Korea Real Estate Commission, 42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s. For those in their 30s, the average amount borrowed is equivalent to 270% of their annual income.

Playing the stock market

At the same time, the South Korean stock market is booming. The increased demand to buy stocks has led to an increase in other loans such as credit. The ratio for Korean shareholders conducting credit financing, i.e. borrowing from securities companies to secure stock holdings, had reached 21.4 trillion won ($17.7 billion), further increasing the indebtedness of households.

A 30-year-old Seoul office worker who bought stocks through various forms of borrowing was interviewed by Reuters this year, and said he was "very foolish not to take advantage of the rebound."

In addition to his 100 million won ($84,000) overdraft account, he also took out a 100 million won loan against his house in Seoul, and a 50 million won stock pledge. All of these demands on the stock market have further exacerbated the problem of household debt.

42.1% of all home purchases in January 2021 were by young Koreans in their 20s and 30s

Simon Shin/SOPA Images/ZUMA

Game of survival

In response to the accumulating financial risks, the Bank of Korea has restricted the release of loans and has announced its first interest rate hike in three years at the end of August.

But experts believe that even if banks cut loans or raise interest rates, those who need money will look for other ways to borrow, often turning to more costly institutions and mechanisms.

This all risks leading to what one can call a "debt trap," one loan piling on top of another. That brings us back to the plot of Squid Game, "Either you live or I do." South Korean society has turned into a game of survival.

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