Posts Tagged ‘Italy’

RIP: Augusto Odone – creator of Lorenzo’s oil

October 26, 2013

Augusto Odone, a former World Bank economist who challenged the world’s medical establishment and created Lorenzo’s Oil has died in Italy aged 80,

The story of Lorenzo’s Oil is now well enough known (and not least because of the 1992  film). Augusto Odone’s effort is the ultimate example of Citizen Science prevailing over Big Science, of a lone, non-establishment individual battling, persevering and triumphing over an establishment view.

Augusto Odone with his son Lorenzo

Augusto Odone refused to accept medical opinion that his son Lorenzo would die in childhood – BBC

And it is becoming increasingly obvious that Big Science, whether in Medicine or in Physics or in Climate Change suffers from the fundamental weakness which results from a massive inertia which prevents the non-establishment view from surfacing. Consensus Science smothers creativity and ingenuity.

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Stealing by the state from depositors in Cyprus is a dangerous precedent for all weak banks in the Euro zone

March 23, 2013

A one off tax is not a regular tax but just confiscation. When done by a State it is Grand Theft. It is some kind of nationalisation where some selected private assets are appropriated. Whatever it is called, it is just plain stealing from bank depositors. When banks are weak or badly managed it is the owners of the bank who should be held both responsible and accountable. But to blatantly and arbitrarily just “confiscate” a part of some of the depositors holdings  is a dangerous precedent.

If this is what happens in Cyprus and seemingly with the acquiescence –  if not the encouragement – of the Euro zone then it bodes ill for all depositors in weak Euro zone banks or banks in weak Euro zone countries. Cyprus can set a precedent of what is acceptable behaviour in the Euro zone. Certainly the banks and the owners will like this. After all it shifts risk from the bank’s equity to the bank’s depositors. And for profligate countries it provides a cover for stealing the money of large depositors.

For depositors having more than €100,000 in Cyprus it is already too late. Robbery by the State has been sanctioned by the European Union including Germany. Rationalising such a move by saying it is to get at black Russian money is disingenuous. If this is acceptable in Cyprus today then it may well be acceptable for banks – and not just the State – to confiscate their customer’s savings whenever an “emergency” arises.

For those with substantial deposits  – and not just over €100,000 – in Greece or Spain or Italy or Ireland it is probably high time to get out.

“Bribes are necessary” – Berlusconi; but he does hit a nerve.

February 18, 2013

Bunga-bunga Berlusconi is at it again!

But he is describing a reality which applies not only in 3rd world and developing countries but also in the EU and Japan and the rest of the “developed” world.

This time he was reacting to a string of corruption cases in Italy culminating in the arrest of the Finmeccanica CEO Giuseppe Orsi for involvement in bribes allegedly paid to Indian government officials to secure a helicopter contract. This follows ENI’s CEO Paolo Scaroni being investigated for alleged bribes paid by its Saipem subsidiary to win contracts in Algeria.

From the FT:

Former prime minister Silvio Berlusconi has defended the need for bribery in winning contracts for Italy’s multinationals, as politicians campaigning in general elections have been forced to respond to a welter of corruption scandals revolving around the nexus of politics and business.

“Bribes are a phenomenon that exists and it’s useless to deny the existence of these necessary situations when you are negotiating with third world countries and regimes,” Mr Berlusconi, leader of a centre-right coalition and seeking his fourth stint in office, said on Thursday.

“These are not crimes,” said Mr Berlusconi, describing payments as “commissions”. He also defended state-controlled energy group Eni, whose chief executive Paolo Scaroni is under investigation for alleged bribes paid by its Saipem subsidiary to win contracts in Algeria. Mr Scaroni denies the allegations.

Corruption generally takes two forms:

  1. According to rule: Where a bribe is paid for preferential treatment  in an otherwise lawful process (i.e. to be preferred over a competitor, to have an application approved “out of turn”  or generally for the facilitation of a lawful process in favour of the briber)
  2. Against the rule: Where a consideration is provided to obtain some service that the receiver is not legally authorised to provide (i.e. to a judge for a favourable judgement or to a policeman to not do his bounden duty or to a Professor to pass a failing student).

For both the cases above of Finmeccanica and ENI, the corruption alleged is primarily of the “According to Rule” type. In the first Finmeccanica’s subsidiary Augusta-Westland apparently payed bribes totalling some €51 million to first have specifications altered so that they could bid and then paid bribes for preferential evaluation during technical trials where the trials themselves were tailored to suit their product. The value of the helicopter contract is about €480 million. In the ENI case, CEO Scaroni apparently arranged to pay some €197 million through a Hong Kong company who then paid bribes to Algerian officials to win Sonatrach and other Algerian contracts for their Saipem subsidiary. The contract values add up to some €8.5 billion.

In the Finmeccanica case the “bribes” make up some 10.6% of the contract value whereas for the ENI case the alleged bribes amount to some 2.4% of the contract value. This difference is itself interesting. Profit margins in energy contracts (oil and gas pipelines or equipment or power plants and power equipment)  are generally significantly lower than in defence contracts. Certainly in the power industry – from my own experience – “consultancy” and “agent” contracts – always ostensibly for the supply of specific services – were considered to be at an “acceptable” and justifiable level if they amounted to less than than about 3% of the contract value in a contract with a profit margin of something less than 10% and typically around 7 – 8%. This suggests to me that the helicopter contract probably has a true profit margin of around 25% with a visible margin of around 15% after paying the “commissions” and “software consultancy contracts” of around 10%.

This is bad enough but there is a particular kind of case where I am a little less certain of what the correct and ethical course of action is. I have seen many cases where the “bribe” is effectively structured as a kind of ” private tax” applying to whoever the winner is. A sort of level playing field as regards bribes.

It is made clear to all bidders that the bidder with the lowest visible evaluated price will win. But it is also made clear – privately – to all bidders that there is a minimum “commission” payment  – usually expressed as a percentage – which will apply. The bidder who makes the best (highest) private bid above this minimum also receives the largest amount of “support” during the evaluation procedure  to be able to declare his bid L1 (lowest evaluated price). The highest bribe-bidder does not necessarily win if his product/bid are not quite good enough to also achieve the lowest evaluated price.

The real question for a CEO then becomes:
“Should I decline to bid and jeopardise jobs – and profits – at my own factories, or join the prevailing game and pay the lowest possible bribe I can?”

And by the way – it is not only 3rd world and developing countries where this dilemma appears. And anybody who thinks this does not happen every day in the EU is living in a fantasy. Not least in the area of public procurement.

Facebook copies social networking concept from 600 years ago

January 21, 2013

The Facebook concept was anticipated some 600 years ago.

A collaborative research project is ongoing between Royal Holloway, University of London, the British Library and Reading University, in which a team of academics are cataloguing and investigating the works of the Italian Academies, dating from 1525 to 1700.One of the major outcomes of the project is a comprehensive database of information on Academies from across the Italian peninsula, detailing their membership and publications. This is publicly accessible through the British Library on-line catalogue

Learned Academies represent a vital and characteristic dimension of early modern culture. There were ca. 600 Academies in Italy in the period 1525-1700. In the 16th and 17th centuries the Italian Academies were responsible for promoting debate and discussion in many different disciplines from language and literature, through the visual and performing arts to science, technology, medicine and astronomy.

And the researchers have also found that scholars at the Italian Academies were networking socially with satirical nicknames while sharing comments on topical events and exchanging poems and plays and music.

The project provides information about the academies, their members, publications, activities and emblems. Researchers were surprised to realise just how similar the activities of these sixteenth and seventeenth century scholars were with society today. 

Professor Jane Everson, Principal-investigator, said: “Just as we create user names for our profiles on Facebook and Twitter and create circles of friends on Google plus, these scholars created nicknames, shared – and commented on – topical ideas, the news of the day, and exchanged poems, plays and music. It may have taken a little longer for this to be shared without the internet, but through the creation of yearbooks and volumes of letters and speeches, they shared the information of the day.” 

The scholars created satirical names for their academies such as Gelati  and Intronati. Professor Everson explains: “They are jokey names, which really mean the opposite of what they say. Intronati has nothing to do with thrones; it means dazed, stunned, knocked out and so not able to think straight – but really the Intronati were engaged in serious study, debates, dramatic performances and the like from the moment they were founded in the 1520s – and they are still as active as ever in their home city of Siena. The Gelati were not going around singing just one cornetto. Gelati means the frozen ones – so a pun on the fact that these academicians far from being totally inactive through being frozen cold, were busy debating, exploring ideas, challenging received opinions and changing the cultural world of their home city of Bologna, and indeed of Italy and far beyond.”

Just as the names of the academies and the nicknames of the individual members were fun, so are the emblems and mottos which illustrate the name of the academy. The scholars took great delight in creating puzzling emblems with hidden meanings. Professor Everson adds: “They do sometimes take some working out, but it is great fun when you can see the hidden meanings in the images.”  

India, Italy to cut renewable energy subsidies

April 4, 2012

Subsidies for renewable energy only distort the market and are counter-productive. The game in renewable energy (wind and solar) has become the extraction of subsidies rather than the production of electricity. The sooner they are dismantled the better.

Two developments in Italy (which is virtually bankrupt) and in India (where growth is slowing) – both driven by economic considerations – are indicators that that some of the artificial gloss around renewable energy may be peeling off. Exorbitant feed-in tariffs for renewable energy are to be curtailed in Italy while very attractive tax-breaks for wind-power in India are to be reduced.

Italy to cut renewable energy subsidies

Italy will move to reduce taxpayer subsidies to its renewable energy sector after last year’s boom in solar power, Industry Minister Corrado Passera says. The official said Saturday in Cernobbio, Italy, that taxpayer subsidies doled out to the wind and solar power industries had generated “excessive” investments in the sector, The Wall Street Journal reported. “Italy has important goals to meet and even surpass,” he said, but added, “we need to do so without over-reliance on taxpayer resources.”

The government, Passera said, will in the coming years “realign” the level of its incentives to those of other European countries. ….

The Hindu Business Line reports on the new budget measures in India. Windmill developers to lose tax breaks

Windmill developers will no longer enjoy lower tax outgo in the first year, for investing in windmills.

Effective April 1, accelerated depreciation – which allows the investing company to fast track the write-off of certain assets for tax purposes – will not be allowed to wind energy developers. The Income Tax department has amended the rules regarding this, through a notification.

Until FY-12, a deduction of up to 80 per cent was allowed if the wind project was commissioned before September of a fiscal. Projects commissioned in the next half of the fiscal got a 40 per cent deduction. Now developers will only be allowed 15 per cent depreciation.

But wind equipments will still enjoy the 20 per cent additional depreciation prescribed for power equipments in the recent Budget. That would make for an effective 35 per cent depreciation. …….

Further twists in the Italian manslaughter trial of seismologists

February 21, 2012
L'Aquila house ruin

A panel of seismologists who met just days before the 2009 earthquake in L’Aquila, Italy are on trial over their reassurances to the public. WOLFANGO VIA FLICKR UNDER CREATIVE COMMONS.

Back in September when this trial for manslaughter began, many rushed to the defence of the scientists being indicted as being an “attack on science”. I wrote then that indictments for incompetence or negligence or even gross negligence by scientists  should not be confused with being an indictment of the scientific method. Scientists are in a privileged position but that does not mean that they cannot be liable for their incompetence. As the trial lumbers on it becomes clearer that there was indeed some considerable incompetence involved. Now Nature reports that a Californian scientist and earthquake expert is testifying against the defendents:

….. The hearing also included some true scientific debate when Lalliana Mualchin, former chief seismologist for the Department of Transportation in California, testified as an expert witness for the prosecution. In 2010, when news about the indictment broke, Mualchin was among the few experts who openly criticized — and refused to sign — a letter supporting the indicted seismologists signed by about 5,000 international scientists.

(more…)

CERN OPERA’s FTL neutrinos are rejected by CERN ICARUS scientists

November 21, 2011

OPERA is one set of experiments at CERN’s Italian partner labs at Gran Sasso and ICARUS is another.

In September Opera reported the FTL neutrinos to widespread scepticism, wonder and some delight. Last Friday the OPERA scientists reported that new experiments supported the September results.

But on Saturday the ICARUS scientists reported – also on the same website-  that they had analysed the September results and that they do not stand up!!!

A search for the analogue to Cherenkov radiation by high energy neutrinos at superluminal speeds in ICARUS

Reuters reports:

An international team of scientists in Italy studying the same neutrino particles colleagues say appear to have travelled faster than light rejected the startling finding this weekend, saying their tests had shown it must be wrong.

(more…)

Berlusconi bungas while Italy burns

November 7, 2011
CONSTANTINE PALACE, STRELNA. Italian Prime Min...

Image via Wikipedia

Il Cavaliere , Sylvio “bunga-bunga” Berlusconi is 75 years old, has a personal fortune of some $9billion, and has been Italy’s Prime Minister for longer than anyone else. He is clinging desperately to power as Italy slides towards a Greece-like crevice and it is not apparent as to why he bothers. Whereas the Greek debt is only about 4% of Eurozone debt, Italy’s debt is closer to 20%. Italy’s public debt in 2010 was 118.4% of GDP. The annual budget deficit was 4.6% of GDP. Italy’s public debt-to-GDP ratio is the second highest in the euro zone after Greece’s, while its debt in absolute terms, which stood at 1.84 trillion euros at the end of 2010, is second to Germany’s.

It might seem to be just a powerful politician in denial of the approaching flames when Berlusconi declares that “Life in Italy is good. The restaurants are full. It’s difficult to get a seat on a plane they’re so busy; holidays are all booked up”.

(more…)

The strange story of the San Raffaele Research Institute, Don Verzé, the Vatican, corruption and a suicide!

October 18, 2011

This is a very strange tale of a prestigious Italian bio-medical Research Institute, a strange priest, tons of money, huge debts, corruption, a suicide, the Vatican and – of course – links to Berlusconi.

It reads like a film script and a subject worthy of a Dan Brown blockbuster.

Alison Abbott writes in Nature:

One of Italy’s most prestigious biomedical research centres now faces bankruptcy, against a backdrop of rumours fed by intrigue among power-brokers, allegations of fraud and corruption, and a violent death. Next week, a court will decide whether to leave the Milan-based San Raffaele Scientific Institute to its fate, or allow a consortium led by the Vatican Bank to rescue it. (more…)

Europe this week: ethics loses as Berlusconi and Juholt continue while Fox resigns

October 14, 2011

Berlusconi clings to power in Italy, while Håkan Juholt continues wallowing through his mire in Sweden and Liam Fox resigns in the UK.

Strange are the ways of politics and ethics. And even when ethics seems to win – as in the Liam Fox affair – there is a sense that the victory is superficial.

Berlusconi will probably hang on by his finger nails as Italy goes the way of Greece. Juholt has probably ensured that his party – the Social Democrats – will lose members and the next election. In the UK the full extent of the dubious antics of Liam Fox’s “best man” have yet to be revealed and David Cameron is struggling with the lack of competence in his Cabinet.

It is tempting to conclude that the common thread is that ethics and competence cannot survive together. But I refuse to believe that it is impossible to be competent or a politician without sacrificing your ethics – even if such examples are difficult to find.


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