Monti's win is Italy's loss

The latest "crunch" EU summit at the end of June landed Italy's citizens with a huge bill to bail out the banks yet again.

But it will not end speculation against the euro, nor the blackmail of financial markets, forcing governments to continue pursuing failed austerity policies.

Italy's Communist Refoundation Party leader Paolo Fererro put his finger on the problem: "Citizens will pay the debts of private banks throughout Europe. This is a massive, unprecedented socialisation of losses."

Ferrero added that "speculators will not have to pay for their own gambling" - because that it going to be paid for by the European Stability Mechanism (ESM), the bailout fund which was previously restricted to lending to national governments but will now be able to lend directly to eurozone banks.

And this bailout fund, Ferrero pointed out, will be paid for by "citizens all over Europe" through their taxes.

"This is an enormous weight around the neck of the citizens if we think only of the private banks in Spain that have been earmarked 100 billion euros."

The Italian communist leader also slammed the continued backing by EU leaders of the Fiscal Compact, otherwise known as the permanent austerity treaty, agreed by EU leaders in March.

That was ratified after massive international pressure by Ireland in a referendum, and on Friday by Germany's parliament, with the support of both Social Democrats and Christian Democrats.

The Fiscal Compact, which forbids governments to have public deficits greater than 0.5 per cent of GDP, will "drain the Italian state €45bn annually for the next 20 years" through enforced austerity.

"Recession is assured," Ferrero remarked, adding that the €120bn investment fund also agreed at the summit will only be used for large infrastructure projects that in Italy, at least, have proved hugely controversial - open to massive corruption and organised crime, and, ultimately, "useless" - Ferrero points to the high-speed train project (TAV), which has provoked widespread protests due to environmental concerns.

Meanwhile welfare will be cut, further undermining domestic demand and thus growth in a vicious downward spiral in which austerity begets yet more austerity.

And instead of allowing the European Central Bank (ECB) to buy government bonds directly or create "eurobonds" to pool eurozone debt - thus spreading the risk and allowing Italy and other countries currently facing massive speculation against the debt to take advantage of Germany's credibility among private investors - or indeed converting the ESM bailout fund into a public bank - a system has been devised by EU leaders in which only governments that have already moved against their welfare states and commit to continue doing so will be assisted.

And even then they will receive help only under the "tight control of the troika (ECB, IMF and EU) and by signing a memorandum in which the country is in effect under tutelage.

"It is a measure - quantitatively little different from what has been done by the ECB until now - that is quite insufficient to avoid speculation against the euro, but very effective at allowing the continuing blackmail of individual countries, forcing them to adopt austerity policies that dismantle welfare and workers rights," Ferrero says.

"The liberal technocrat Monti emerges a winner from the summit. The Italian people lose, and austerity and recession continue."

Tom Gill blogs at revoltingeurope.com