You're watching...
Former U.S. Ambassador to the U.N. John Bolton on the impact of the Italian budget vote.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
They could be on his way out earlier this hour he did -- -- budget vote but lost its majority support joining us now is former ambassador to the UN.
John Bolton ambassador Bolton.
-- -- -- go from there.
Well I think Berlusconi is clearly trying to hang on to power and centrist thing if the opposition wanted to bring you down.
They could have voted against it and would've had a majority instead -- stained allowing the government will stay in power.
So I think what they -- -- see is for Berlusconi's own coalition to break up rather than themselves being responsible for collapse and the why does that mean that's like that cloak and dagger stuff -- why -- that so important in this country teetering right now you know because no sane politician wants to be the head of the attack -- At this point so they're trying to find a way for Berlusconi's self -- and I you know you can never predict with certainty but I would be surprised -- Berlusconi falls in the near future.
But because it wasn't a maturity it was a it was a good -- -- no confidence vote.
So isn't this to the beginning of the demise -- now that the world knows.
How -- tie ins due business which spreads haven't known by now but now that they really know he's got -- step down.
No because his coalition if -- risk going to the electorate now they could face a pretty massive rebuttal so so their interest is to find a way to stay in power what.
The -- members of the coalition would like to see is the coalition stay together without.
Berlusconi -- not gonna let that happen so I think this could drag out for some sustained period of time which is not good for Italy because it means continuing uncertainty and lack of confidence.
But just like the great -- scenario has continued to play out I think this is quite it's it's could be a -- Ambassador I look at some of the austerity things that they're talking about now selling about seven billion dollars in -- government assets.
Keeping stores open on Sundays.
It is a tough life this.
I -- we're talking the proverbial drop in the bucket ultimately as the global economy continues to struggle and Emily continues to struggle and this is that this is -- stumbling block them.
How can they make real changes that ultimately they're gonna have to make well.
And and given the size of Italy's economy seventh largest in the world's third largest in the EU if -- in the Euro -- if they can't really make substantial changes just gonna continue the crisis for the eurozone as a whole and I think that is the most likely outcome it doesn't matter about Berlusconi the fundamental problem.
Is lack of growth and lack of credit worthiness and his bond yields continue to rise it's just gonna -- It's -- thing people watching this show right now keeps saying how -- we spend so much time on it how come this keeps hurting our stock market who cares about the recent years about Italy so what's the implications of what's going on Italy right now well it certainly can have a spillover affect us but on the other hand I don't think we should -- the Europeans out I think there Euro project was as much political as anything else what I would do if I were advising people and sell euros.
Sell European sovereign debt sell your shares in European financial institute and what would they are and they are dead as a 100% of GDP so -- I don't like.
Right fall on the I think but by Priceline yeah.
I'd get out European security terms of resolving this mess on -- -- the -- -- the next country to have to be afraid of I'm sure after -- -- Italy will go on to Spain but in terms of Italy.
Aren't the chances better of resolving it with the Berlusconi in office and in control -- -- better chances of -- -- without him I I think actually -- better with him being an -- because he understands the implications I think better than the socialist alternative would spread but the the real problem -- -- a structural problem in the European Union created -- currency without -- government wasn't a good idea when they did it and now the chickens are coming -- to -- and I also see a structural problem and then there's a lot of -- -- to what's going on in this country.
You -- a lot of people Italy who -- industrious.
Mostly in the north maligned and these other cities in the Northern League.
And they -- -- pretty hard bargain and a little upset themselves about bailing out other Italians -- the south do.
You know let's face it don't work necessarily as hard as they did.
Well that that's one reason why Berlusconi was not able to go to the European Union meetings over the past few weeks with the reform program because there's enormous disagreement even within Italy and that.
Is just an indication of how great the disparities are within the European Union as a whole.
The only real answers to concentrate all the fiscal power in Brussels and that in gonna happen and -- -- -- -- doesn't happen it's not and that's that's why they made a fundamental mistake and that's why it was political to create the Euro they wanted to currency alternative to the dollar.
To be a hole in the world in a multi polar world.
Not a union polar world with the US and -- well there were entitled to tried they're entitled to -- to which is what they're doing or what we've got a few seconds left but ultimately do you think Germany will let this fell do you think they'll because they're the -- -- -- whole thing together.
I don't I don't think chancellor Merkel has any further discretion she certainly wants to preserve the Euro but I think the average German voter has just about had.
All right ambassador John Bolton thank you very much appreciate it well.
