President readies Italy for snap polls to be fought on EU, euro

[webfact]

President readies Italy for snap polls to be fought on EU, euro

By Steve Scherer and Alberto Sisto

 

Former senior International Monetary Fund (IMF) official Carlo Cottarelli arrives for a meeting with the Italian President Sergio Mattarella at the Quirinal Palace in Rome, Italy, May 28, 2018. Italian Presidential Press Office/Handout via REUTERS

 

ROME (Reuters) - Italy's president set the country on a path to fresh elections on Monday, appointing a former International Monetary Fund official as interim prime minister with the task of planning for snap polls and passing the next budget.

 

The decision to appoint Carlo Cottarelli to form a stopgap administration sets the stage for elections that are likely to be fought over Italy's role in the European Union and the euro zone, a prospect that is rattling global financial markets.

 

The euro zone's third-largest economy has been seeking a new government since inconclusive March elections, with anti-establishment forces abandoning efforts to form a coalition at the weekend after a standoff with the head of state.

 

President Sergio Mattarella vetoed the parties' choice of a eurosceptic as economy minister, prompting the 5-Star Movement and far-right League party to accuse him of betraying voters.

 

Both parties dropped drop their plan to take power, switched to campaign mode, and 5-Star called for street protests against the president's rejection of their nominee, 81-year-old Paolo Savona, who has argued for Italy to quit the euro zone.

 

Cottarelli told reporters after his appointment that elections would be held in the autumn or early next year. He also tried to reassure investors on the Italian economy.

 

"Speaking as an economist, in the past few days tensions on the financial markets have increased," said Cottarelli, who had served as a cost-cutting tsar to a previous government.

 

"Nonetheless the Italian economy is still growing and the public accounts remain under control."

 

The prospect of fresh elections raised fears among investors that the vote could become a de facto referendum on Italy's euro membership. The euro touched a fresh six-month low and yields on Italian debt climbed, increasing the extra borrowing costs or spread that Italy pays in comparison with Germany.

 

Already Italian politicians are pondering election tactics.

 

A 5-Star source said it was considering an election alliance with the League. In March, 5-Star ran its own campaign while the League campaigned as part of a right-wing coalition with the party of former prime minister Silvio Berlusconi.

 

"This is not a democracy, this doesn't respect the popular vote," League chief Matteo Salvini said after Cottarelli accepted his appointment by the president.

 

Salvini characterised the move as the death throes of a political establishment intent on keeping Italy "enslaved", and afraid of the reaction of financial markets.

 

"The next elections will be a plebiscite -- the population and real life against old political castes and the 'lords of the spread'," he said.

 

FAILURE LIKELY

Salvini is tapping into a belief among many Italians that EU fiscal rules are rigged against Italy, even if many voters do not want to exit the euro.

 

"The euro has to stay, but we have to make our voice heard," said Roberto D’Amelia, 68, a bar owner in central Rome.

 

At a Rome market, others criticised 5-Star and the League.

 

"I am a mother of a boy who has to travel the world and so I am convinced an anti-European minister is not the right thing for Italy," said shopper Irene Teramo.

 

Cottarelli must try in the coming hours to form a government with majority support from parliament. He seems almost certain to fail, at which point the president would swear in him and his proposed cabinet, to serve until the next election.

 

He has been tasked with passing the 2019 budget by the end of this year, a challenge that may prove impossible without the confidence of parliament. In those circumstances, elections could be held as soon as September.

 

FUNDAMENTAL CHOICE

In a televised address on Sunday, Mattarella said he had rejected Savona, the coalition's candidate for the economy portfolio, because he had threatened to pull Italy out of the euro zone.

 

"The uncertainty over our position has alarmed investors and savers both in Italy and abroad," Mattarella said, adding: "Membership of the euro is a fundamental choice. If we want to discuss it, then we should do so in a serious fashion."

 

The League and 5-Star, which had spent days drawing up a coalition pact aimed at ending a two-month stalemate, responded with fury to Mattarella, accusing him of abusing his office.

 

The 5-Star leader, Luigi Di Maio, called on parliament to impeach the mild-mannered Mattarella.

 

"Last night was the darkest Italy's democracy has ever seen," Di Maio said. "The truth is they don't want us to take power."

 

The 31-year-old said the anti-establishment group would organise rallies across Italy, including in Rome on June 2.

 

"Make some noise, it is important that we do so all together," Di Maio said in a live address on Facebook in which he reiterated the group had never planned for Italy to quit the euro.

 

League chief Salvini also threatened mass protests.

 

"If there's not the OK of Berlin, Paris or Brussels, a government cannot be formed in Italy. It's madness, and I ask the Italian people to stay close to us because I want to bring democracy back to this country," he told reporters.

 

However, Salvini dismissed Di Maio's impeachment call.

 

"We need to keep cool. Some things cannot be done in the throes of anger ... I don't want to talk about impeachment," he told Radio Capital.

 

(Additional reporting by Massmiliano Di Giorgio, Giulia Segreti, Giuseppe Fonte, Giselda Vagnoni and Stefano Bernabei; Writing by Mark Bendeich; Editing by David Stamp and Robin Pomeroy)

 

-- © Copyright Reuters 2018-05-29

[The Renegade]

10 minutes ago, webfact said:

President readies Italy for snap polls to be fought on EU, euro

Beer on ice, popcorn at the ready, sit back and watch the Democratic EU in action.

 

Attack, attack and attack some more.

[mfd101]

A much bigger, much more dangerous Greece. In the long run (how long?), the southern European countries won't be members of the euro zone because they "don't want to be like the Germans".

 

Which has of course consequences, for them. Their choice (just like Brexit).

[JoePai]

Well done Italy, tell the EU where to stick it  ?

[mercman24]

come on ITALY, get this EU sucking scum out, dont be dictated to by the German and France cartel, still got some LIRA in my bottom drawer, lol

Edited May 29, 2018 by mercman24

[Guest]

1 hour ago, webfact said:

ROME (Reuters) - Italy's president set the country on a path to fresh elections on Monday, appointing a former International Monetary Fund official as interim prime minister with the task of planning for snap polls and passing the next budget.

Last week I didn't even knew that Italy had a president. 

 

This week I learned that he has big balls. Good for him and for Italy. It's good to put these destructive forces, supported by Russia, back to their caves. 

 

 

[peperobi]

Another idiot that knows nothing about the country, Italtanic is sinking...

[terryw]

Italy could destroy the Euro. The populist parties in Italy will win a huge mandate at the Election to stick two fingers up at Brussels.

 

The EU will threaten Italy but talking to friends there, they seem determined to have more independence from the EU. The Election will be ver anti German.

[peperobi]

Just now, terryw said:

Italy could destroy the Euro. The populist parties in Italy will win a huge mandate at the Election to stick two fingers up at Brussels.

 

The EU will threaten Italy but talking to friends there, they seem determined to have more independence from the EU. The Election will be ver anti German.

Itaxit, will be really good!

[Baerboxer]

5 hours ago, mfd101 said:

A much bigger, much more dangerous Greece. In the long run (how long?), the southern European countries won't be members of the euro zone because they "don't want to be like the Germans".

 

Which has of course consequences, for them. Their choice (just like Brexit).

 

Or perhaps they want to be able to freely elect the government and polices they want? Rather than have a President tell them they can only elect a government if he agrees with their policies, or it's supported by the EU and Germany?

 

Yep, some big crunches coming - Italy, Spain, Portugal all have economy issues, the Eastern EU states have sovereignty issues, Ireland has its border / Brexit issue. 

 

And Germany is now finding that trying to dominate and dictate through economic force isn't easy just like military force wasn't.

 

Interesting times ahead. Will the Italians meekly bow to German financial threats, or will they choose freedom?

[mfd101]

I don't think this needs to turn into an anti-German tirade.

 

The Germans are rich & powerful because they work hard & take pride in their work. Is that their fault? I don't think so. Same for the Dutch & the Scandinavians, & the Japanese. [The Thais could learn quite a lot from them all, but won't.]

 

The southern Europeans have a different cultural outlook and see no reason to emulate the Germans. I think that's fine too. They want to relax, enjoy the Mediterranean warmth, and damn the consequences. But on what basis do they then blame the Germans for the economic effects of their own choices?

 

[peperobi]

17 hours ago, Baerboxer said:

 

Or perhaps they want to be able to freely elect the government and polices they want? Rather than have a President tell them they can only elect a government if he agrees with their policies, or it's supported by the EU and Germany?

 

Yep, some big crunches coming - Italy, Spain, Portugal all have economy issues, the Eastern EU states have sovereignty issues, Ireland has its border / Brexit issue. 

 

And Germany is now finding that trying to dominate and dictate through economic force isn't easy just like military force wasn't.

 

Interesting times ahead. Will the Italians meekly bow to German financial threats, or will they choose freedom?

Heil Matarella!!!

[Grouse]

I think that having registered a protest, Italy will calm down and vote sensibly this time. Leaving the EU or the Euro would be disasterous for Italy.

[The Renegade]

15 minutes ago, Grouse said:

I think that having registered a protest, Italy will calm down and vote sensibly this time. Leaving the EU or the Euro would be disasterous for Italy.

Ya think ?

 

Quote

As Italy’s new stop-gap prime minister struggled to form a cabinet yesterday, the country was bitterly divided by a political crisis 

 

Quote

Police are investigating death threats sent to the president but more than 260,000 Italians have backed him in a petition.

https://www.thetimes.co.uk/edition/world/italy-bitterly-divided-over-threat-of-eu-referendum-05zjn720l

 

Truly shocking if the Italian President has received death threats, but 260.000 Italians backing him out of a population in excess  of 60 million tells its own story.

 

Mattarella has made a grave error of judgement, he is seen to be bending the knee to Brussels and there will be a high price to pay.

 

[bert bloggs]

18 hours ago, mfd101 said:

I don't think this needs to turn into an anti-German tirade.

 

The Germans are rich & powerful because they work hard & take pride in their work. Is that their fault? I don't think so. Same for the Dutch & the Scandinavians, & the Japanese. [The Thais could learn quite a lot from them all, but won't.]

 

The southern Europeans have a different cultural outlook and see no reason to emulate the Germans. I think that's fine too. They want to relax, enjoy the Mediterranean warmth, and damn the consequences. But on what basis do they then blame the Germans for the economic effects of their own choices?

 

You have hit the nail on the head ,all the countrys have a different cultural outlook ,thats why the E.U is a disaster ,just let everyone get on with their lives the way they did before . get rid of  the Brussels troughers ,they are the problem ,not the solution .

[bristolboy]

46 minutes ago, Grouse said:

I think that having registered a protest, Italy will calm down and vote sensibly this time. Leaving the EU or the Euro would be disasterous for Italy.

Possibly. Still, it's clear that the Italians were not happy with the decision to reject the five star -lega alliance:

"Support for the League neared 28% in an SWG poll published Monday, making it the country’s second-biggest party, trailing just 2 points behind 5 Star, which dropped to 30% of the popular vote in the recent election."

http://www.cetusnews.com/news/Anti-Europe-Party’s-Fortunes-Rise-in-Italy’s-Political-Turmoil.Skd8Lwj1m.html

 

[The Renegade]

It now appears that the EU Stooge will not be able to form a Government.

 

Quote

Sources close to some of Italy’s main parties said there was now a chance that President Sergio Mattarella could dissolve parliament in the coming days and send Italians back to the polls as early as July 29.

The Markets who must be obeyed are now factoring in.

 

Quote

What the markets are starting to factor-in is not a default per se but an early election leading to a victory of eurosceptics and an exit from the euro,

https://www.reuters.com/article/uk-global-forex/euro-buried-near-multi-month-low-as-italian-political-crisis-deepens-idUSKCN1IU2Y6

 

The euroseptics as they are affectionately called polled 52% between in the last election. 

 

Will it top 70% or above in the next election ?

[bristolboy]

18 hours ago, mfd101 said:

I don't think this needs to turn into an anti-German tirade.

 

The Germans are rich & powerful because they work hard & take pride in their work. Is that their fault? I don't think so. Same for the Dutch & the Scandinavians, & the Japanese. [The Thais could learn quite a lot from them all, but won't.]

 

The southern Europeans have a different cultural outlook and see no reason to emulate the Germans. I think that's fine too. They want to relax, enjoy the Mediterranean warmth, and damn the consequences. But on what basis do they then blame the Germans for the economic effects of their own choices?

 

They are also powerful because of the way that the Euro effectively subsidizes the German economy at the expense of both Eurozone member whose economies aren't doing so well and EU members who do not use the Euro.

[mfd101]

59 minutes ago, bristolboy said:

They are also powerful because of the way that the Euro effectively subsidizes the German economy at the expense of both Eurozone member whose economies aren't doing so well and EU members who do not use the Euro.

Not sure I understand the mechanics of that. How exactly does the euro subsidize ONLY the Germans? ONLY the rich hardworking 'north'? If you mean that the currency is overvalued for the productivity levels of the 'south', I agree with you and the 'south' should get out of the euro zone.

 

But then you say that the euro subsidizes the Germans at the expense of "EU members who do not use the euro". How does that work when using your own 'cheaper' currency is supposed to support your economy & its exports!?

[mfd101]

1 hour ago, bert bloggs said:

You have hit the nail on the head ,all the countrys have a different cultural outlook ,thats why the E.U is a disaster ,just let everyone get on with their lives the way they did before . get rid of  the Brussels troughers ,they are the problem ,not the solution .

My point is that the cultures of different countries vary and produce variable economic outcomes. In that context, the "Brussels troughers" as you call them are mostly irrelevant: The rich countries are rich irrespective of EU rules & regulations. And the poor or poorer countries are so through their own efforts, not because of anything done or not done by a bunch of Brussels bureaucrats & politicos.

[bristolboy]

7 minutes ago, mfd101 said:

Not sure I understand the mechanics of that. How exactly does the euro subsidize ONLY the Germans? ONLY the rich hardworking 'north'? If you mean that the currency is overvalued for the productivity levels of the 'south', I agree with you and the 'south' should get out of the euro zone.

 

But then you say that the euro subsidizes the Germans at the expense of "EU members who do not use the euro". How does that work when using your own 'cheaper' currency is supposed to support your economy & its exports!?

For the first part, we're basically in agreement.

For the 2nd part it works like this. Let's say Sweden and German are competing for overseas export business. Sweden's currency rate is based on evaluations and expectations for Sweden's economy.

But the Euro's exchange rate is based not just on the strength of the German economy but the weakness of Spain, Italy, Greece, Portugal and really most other Euro nations that aren't performing as well. So Germany gets a big competitive leg up in the export market compared to non Euro nations. And not just for nations outside the EU. It also gets to enjoy that advantage inside the EU as well. In what is supposed to be a free trade zone German products are subsidized in relation to non Euro nations because of the Euro. So is the EU genuinely a free trade zone?

 

[bert bloggs]

43 minutes ago, mfd101 said:

My point is that the cultures of different countries vary and produce variable economic outcomes. In that context, the "Brussels troughers" as you call them are mostly irrelevant: The rich countries are rich irrespective of EU rules & regulations. And the poor or poorer countries are so through their own efforts, not because of anything done or not done by a bunch of Brussels bureaucrats & politicos.

Right ,so just let the different countrys live and trade as they did before the E.U and the euro , we dont need a bunch of unelected beurocratic freeloaders in Brussels to tell the rest of Europe how to behave .

[bristolboy]

4 minutes ago, bert bloggs said:

Right ,so just let the different countrys live and trade as they did before the E.U and the euro , we dont need a bunch of unelected beurocratic freeloaders in Brussels to tell the rest of Europe how to behave .

The reason the EU was founded was that that model wasn't working. Whereas the free trade zone model was. The problem really lies with the Euro. Were that gone, nations would subject to the harsh discipline of the free market but not that of foreign governments acting on behalf of bankers. It is well to note once again that 95 percent of the money that supposedly went to bail out Greece actually went to directly to bankers to bail them out of their foolishness. I don't know how much went to bail out bankers in the case of Ireland and Spain, 2 countries that weren't being fiscally irresponsible, but it wasn't negligible.

[Grouse]

Biggest rise in Italian government bond yields for 26 years. Italy trying to raise 7 billion USD today. The anti establishment 5 star and The League are sobering up really quickly. This will be fun ?

[Grouse]

2 hours ago, The Renegade said:

It now appears that the EU Stooge will not be able to form a Government.

 

The Markets who must be obeyed are now factoring in.

 

https://www.reuters.com/article/uk-global-forex/euro-buried-near-multi-month-low-as-italian-political-crisis-deepens-idUSKCN1IU2Y6

 

The euroseptics as they are affectionately called polled 52% between in the last election. 

 

Will it top 70% or above in the next election ?

Nope! The Italians will think about what's in their pockets I suspect! ?

[Grouse]

3 hours ago, The Renegade said:

Ya think ?

 

 

https://www.thetimes.co.uk/edition/world/italy-bitterly-divided-over-threat-of-eu-referendum-05zjn720l

 

Truly shocking if the Italian President has received death threats, but 260.000 Italians backing him out of a population in excess  of 60 million tells its own story.

 

Mattarella has made a grave error of judgement, he is seen to be bending the knee to Brussels and there will be a high price to pay.

 

So you think he was wrong to not approve one proposed appointee; an 81 year old declared anti Euro buffoon?

 

I think he avoided an obvious disaster. Clearly a set up anyway

[mfd101]

4 minutes ago, Grouse said:

So you think he was wrong to not approve one proposed appointee; an 81 year old declared anti Euro buffoon?

 

I think he avoided an obvious disaster. Clearly a set up anyway

Yes, Mattarella has done the job he's paid to do: to protect the Constitution and, in doing so, insist on government ministers who can meet Italy's remarkably low standards.

[bristolboy]

2 hours ago, Grouse said:

So you think he was wrong to not approve one proposed appointee; an 81 year old declared anti Euro buffoon?

 

I think he avoided an obvious disaster. Clearly a set up anyway

You're almost certainly right that it was a setup. The question is, should the president have taken the bait?

[Grouse]

Guess what? They're all talking again. Maybe no re-election. Yields dropping. More Grappa please! Bella, Bella ?