Will Italy make it?
Italy’s public finance situation is worrying global markets, just as the newly-elected populist coalition is plotting its economic course. The coalition made dramatic promises to voters that could blow past deficit targets and push Italy toward default, bailout or an exit from the euro. But despite their recklessness, the Five Star Movement and the League are more likely to moderate their economic programs — that is, if they can manage to keep their alliance together.
Opinion: Where is Italy headed?
For two months, Italy’s Five Star Movement and its leader Luigi Di Maio have tried to assemble a cabinet with the mainstream parties of the center-right (Silvio Berlusconi) or center-left (Matteo Renzi). So far, they have failed. But those who assume Italy is doomed to return to the polls underestimate the capacity of Italian politicians for compromise – especially since a weak government suits nearly everybody.
Opinion: Regional disparities strike back in northern Italy
Two northern Italian regions have voted overwhelmingly in support of more autonomy from Rome. They are two of the country’s richest areas, frequently paying more in taxes than they receive in public spending, and the vote laid bare the dissatisfaction over this disparity. Worse, the money being transferred to poorer parts of Italy has not lifted them out of poverty. Italy can no longer sweep these issues under the rug. Federalism is now back on the table.
Could the right make a comeback in Italy?
Local elections in Italy had a surprise result – a surge from the center right. Both former Prime Minister Matteo Renzi’s allies on the left and the upstart Five Star Movement led by Beppe Grillo seem to be losing traction. Is this part of a larger European trend away from populists and back toward known political quantities? And could this mean a return of Silvio Berlusconi?
Italy pushes for early elections that would make matters worse
Matteo Renzi, Silvio Berlusconi and Beppe Grillo may be poles apart politically, but the leaders of Italy’s center, right and left parties are jointly toying with a plan to offer disgruntled voters another make-believe reform scheme.
Italy drifts toward paralysis
Italy is facing the prospect of major political fragmentation and government inertia. Its political players are already bracing for the double whammy of changed electoral rules, which will radically alter the composition of the next parliament, and the steady rise of populist sentiment in the country.
Italy after the referendum
Italy's political establishment is hanging tough after the failed constitutional referendum. But buying time and tinkering with the election law will be of no avail unless the economy improves. Prime Minister Paolo Gentiloni’s caretaker government appears to lack the political clout to cut spending and fix the banks. That will only strengthen the appeal of Beppe Grillo’s Five Star Movement.
Global Outlook 2017: Merkel and the myth of German hegemony
Among the leaders of the world’s biggest liberal democracies, it seems Angela Merkel is the last woman standing. Some have claimed that will make her the leader of the free world and Germany Europe’s hegemon. Such claims are greatly exaggerated. There will be significant limitations to both Germany and Ms. Merkel’s room for maneuver in Europe and globally in the coming year.
Italy: populist Five Star Movement lurks in the wings
By calling a risky referendum on his constitutional reform, Italy’s Prime Minister Matteo Renzi has put in jeopardy not only his government and the Democratic Party’s political future. Should the prime minister’s gamble backfire, Italy’s populists of the anti-capitalist Five Star Movement may be the ones forming the next cabinet.
Italy’s 50-year bond: an ill omen?
What’s not to like about Italy’s first-ever 50-year bond? October’s brilliantly successful sale may set the template for other eurozone governments. But investors should take note that it was far from a vote of confidence in Europe’s financial and economic prospects.