06/12/2009, 00.00
ASIA – ITALY
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Seizure of US government bonds from two Japanese men in Italy raises questions

Seized US bonds are worth US$ 134.5 billion. The whole affair touches a number of economic and political issues. For some the resignation of Japan’s Interior minister might be related to it.
Milan (AsiaNews) – There have been new developments with regards to the story of US$ 134.5 billion in US government bonds seized by Italy’s financial police at Ponte Chiasso on the Italian-Swiss border, which AsiaNews reported four days ago. News about it initially made it to the front page of many Italian papers, but not of the international press. Since yesterday though, some reports have published by English-language news agencies. And some commentators are starting to link the story to reports in US press dating back to 30 March.

On that date the US Treasury Department announced that it had about US$ 134.5 billion left in its financial-rescue fund, the Troubled Asset Relief Program (TARP), whose purpose is to purchase assets and equity to buttress companies in trouble. The existence of such means that the Obama administration may not have to go to Congress for additional funds, something which is especially important since many lawmakers have vowed to oppose any requests for more money.

At the same time, Japan’s Kyodo news agency has reported that the resignation of Japan’s Interior Minister Kunio Hatoyama might also be related to the Ponte Chiasso affair. Officially the minister quit as a result of a row over who should head the state-owned Japan Post, but some sources have suggested that such a scenario is not very plausible since Mr Hatoyama was Prime Minister Taro Aso’s main ally in his rise to the prime minister’s office, and is especially unconvincing since the ruling coalition government has to face elections in just two weeks time. Indeed there are many reasons to connect the Ponte Chiasso incident to the minister’s resignation.

First of all, the men carrying the bonds had a Japanese passport. Secondly, they were not arrested. Under Italian law anyone in possession of counterfeit cash or bonds worth more than a few tens of thousands of euros must be arrested. By comparison the value of the seized counterfeit bonds is equal to 1 per cent of the US Gross Domestic Product (GDP). Thirdly, how the seizure took place is worthy of a Monty Python  movie—two well-dressed Japanese men carrying a briefcase travelling in a local train usually used by Italian manual labourers who commute to Switzerland for work had as much chance to go unobserved as two European businessmen travelling in the Congo.

For AsiaNews the incident raises several questions. For example, why did Italy’s press, of every stripe, first give the matter great visibility, only to drop it as quickly?  Also, if we are to assume that the bonds are real, why were they in Italy on their way to Switzerland? If these were the unused TARP funds why would they be in US Federal Reserve denomination? Would it not have been better to wait to see how they would be used before the bonds were issued? If they are authentic and owned by a foreign state, why were they not transported in a diplomatic bag, which cannot be inspected at customs? And what will the Italian government do insofar as the issue represents an offence under Italian law? Will it impose a fine of 38 billion euros, and run the risk of a row with an ally, or return the money without any penalty to the rightful owner and show the world that Italy is some kind of banana republic, a semi-colonial protectorate that violates its own laws and constitution?

Whatever the case may be, for Italy’s Prime Minister Silvio Berlusconi it is a heavy burden to bear, given the legal and criminal consequences he might face.

The only people who come out of it well are Italy’s tax cops, reason for them to show off their success on their website.

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