Free Trieste

The ongoing economic and financial crisis, which is also affecting the European Union, shows well what is yet to come, and what is happening to economic markets in the future months.

One such economic indicators regards capital movements in the EU. We are within the Target 2 framework: it is a system settling payments within the Euro zone, and thus it serves as a measure for the scale of capital flows between States that use the European single currency.

So, last year [2015] Target 2 gave us a merciless picture as for the trust savers and investors put in EU State’s economies.

Spain enjoys the less trust (it has a EUR 241.8 billions deficit). Next in line is Italy with (its deficit amounts to EUR 229.6 billions). Follow Greece (EUR -97.3 billions), and France (EUR -73.5 billions).

But what does it mean being in the red in such a “special” ranking of economic soundness?

Simple: international investors and savers “distrust” the weak States, because they cannot grant reliability of the financial markets, and they cannot do it because their social-economic structure is compromised.

Usually, this happens in States with high corruption rates and high criminal influence on the State’s bodies. And Italy fits the description.

It is right because of this corrupt system, which erodes all of its social structures, that Italy is unable to stand competition on the international and on the single EU market. Indeed, corruption’s price weakens the Italian economy making it unable to compete globally.

And this gets us on the other side of the coin. Within the EU single market, the first beneficiaries of this collapse of weaker Countries are the States capable to offer both a good degree of resistance and a strong, incorruptible public system.

This is how the “weak” States’ flight capital flows to Germany, (Target 2 ranks it on top with a record EUR +592.5 billions), to Luxembourg (+140.4), to the Netherlands (+49.4 billions), or to Finland (+31.8 billions).

Target 2 shows very clearly that, when it comes to investing capital in the EU, the small Grand Duchy of Luxembourg is a secure safe.

Luxembourg enjoys political stability, it has efficient infrastructures, and it borders big European States. It attracts qualified, multilingual workers, and it offers long tradition of bank secrecy. All of this is vital for its financial sector’s growth.

Indeed, Luxembourg is landlocked, and it only has 550,000 inhabitants, however, it is one of the richest States in the world, on top of the European ranking (GDP per capita: USD 97,000).

This truly is Interesting data, and real food for the thought. For instance, it backs the strategic importance of another State.

A State with full monetary sovereignty: another small European State, but one with a unique international Free Port.

A financial, economic, and maritime driving force in Europe’s heart. An economic core of global stabilization. This is the Free Territory of Trieste.

Translated from blog “Ambiente e Legalità” – “Environment and Legality” by Roberto Giurastante