We use cookies to help improve and maintain our site. More information.
close

December 07, 2016

Matterella says No to early elections

The big political news from Italy is that the president, Sergio Mattarella, has denied the request of Matteo Renzi for early elections. As the Huffington Post Italia reports, Matterella made it clear to Renzi that he will not accept elections until the voting systems for the chamber of deputies - recently reformed - and the Senate are homogenised. Huffington Post quotes the Quirinale as saying that it was inconceivable for elections to be held under the current voting rules. The article says that Matterella's decision has forced Renzi to change tack. He is now seeking a grand coalition interim government - supported even by the Five Star Movement and the Lega - as an act, we presume, intended to produce so much chaos that the Italian electorate might ruefully come back to him and ask him to lead the country. Tensions are also growing inside the PD, and it is not clear at all whether Renzi can stay as the party leader.

Because of Matterella’s quick decision, we are now looking at elections at the earliest in late March or early April, and possibly even later. One obstacle is the Constitutional Court, which will hear a complaint about the electoral law for the chamber of deputies, also known as the Italicum, on January 24. It is possible, for example, that they might strike out the so-called bonus to the largest party, intended to guarante a majority. But this means that the Italicum will have to be amended in accordance with the ruling, and that a corresponding voting system will need to be introduced for the Senate, a necessity since the No vote left the Senate in place. That constitutional court's judgement on the Italicum will of course have to be taken into account when the new government draws up an electoral law for the Senate.

Stefano Folli makes the observation that only a day after his devastating loss Matteo Renzi is behaving like the winner, and contrasts his raucous behaviour to that of David Cameron, who lost with a much better result. Folli notes that Renzi is fighting a war on two fronts. He wants to bulldoze the president into early elections, and to remain leader of his party - a battle he is not going to win. 

Corriere writes that Matterella’s decision after consultation with party leaders means that there will be no elections in February, as Renzi wanted, not even necessarily in the spring. So we are looking at a rather long period of technical government ahead.

Matterella has laid down a number of criteria for the interim government. He wants it to stabilise relations with the EU, stabilise the economy and in particular the financial sector. It appears to us that a technical government is the most likely outcome, but given the delays in drafting a new electoral law, this government will be in office for an uncomfortably long time. Corriere has a good overview of the laws that are now on hold because of this political crisis, such as various reforms bills. 

So, what about an interim grand coalition government, as proposed by Renzi? Silvio Berlusconi said he was in principle ready to support this, especially since he, too, does not want early elections, as he cannot himself be a candidate before 2018. But he is asking for a rather high price, in particular a guarantee that the new system will be relatively proportional, as well as having ministers in the interim government. It is not clear that this is acceptable to anyone else. 

This is why we think that the most likely outcome is a technical government with a narrow remit, followed by elections in the spring, based on a new, relatively more proportionate, electoral law. And it is far from clear that the parties that support the euro would be able to form a coalition after the next elections.

Among the comments on Italy, we want to highlight one by Jan Techau who notes, in our view correctly, that the Italian No is much more damaging to the EU than the Brexit vote because it touches the eurozone. He argues that Italy has shown itself unwilling and incapable of instituting economic and political reforms. The country prefers to blame others, or listen to the populists, but is unwilling to do what's necessary. Techau is vague on what Italy needs to do. And we disagree with him on his focus on Germany’s role in the destabilisation of the eurozone, which is the result of still ongoing competitive devaluations. But we agree with him that the No vote is indeed a bigger crisis for the EU, because it makes it now virtually impossible, politically, for Italy to create the conditions of a sustainable euro membership.

Show Comments Write a Comment

December 07, 2016

Looking for alternatives to Valls?

Will the big elephants in the Socialist party accept Manuel Valls? After all he is blamed for moving the party to the right and betraying François Hollande. Supporters of Martine Aubry and François Hollande are looking to find an alternative candidate, writes Cécile Cornudet. Christine Taubira already declined, and there is no consensus on anyone else yet. Two names still seem possible: Marisol Touraine, social and health minister, and Vincent Peillon, former education minister.

For Valls, the opinion polls are not looking good. The latest poll, with fieldwork partly done after his official announcement, sees him at 10% in the first round, behind François Fillon (27.5%), Marine Le Pen (24 %), Emmanuel Macron (13,5 %) and Jean-Luc Mélenchon (12,5 %), according to Le Point. Valls is now calling on Macron and Mélenchon to not be afraid to participate in the left primaries,  Journal du Dimanche reports.

Bernard Cazeneuve, meanwhile, became prime minister as expected. He is a safe pair of hands.

Show Comments Write a Comment

December 07, 2016

Local taxes and citizenship in Ireland

Fintan O'Toole tells stories of poor morale among the Irish when it comes to local and property taxes, which explains a lot about why water charges are such an explosive subject in Ireland. In the 1990s property, bin, and water taxes were introduced but only paid by a few and abolished eventually. The tax debt of those who did not pay was written off. There were good reasons to boycott those taxes at the time, as they were unfairly concentrated on the Dublin area, did not have enough exemptions for the poor, and treated people like customers rather than citizens. But there is also a simple reason to pay: property and local taxes are an essential part of local democracy. Those who paid these taxes in the last 20 years, including himself, were left feeling duped. So one could argue that the tax was not on water, property, or refuse, but on good citizenship. This time, they won’t fall for the water charges unless there is a real overhaul that relates local communities and their services to their tax base.

Show Comments Write a Comment

December 07, 2016

Brexit contours

The wait for Brexit is a bit tedious and subject to much noise about entirely meaningless concepts such as "access to the single market". George Eaton writes Theresa May has made a tactical concession. She will reveal her plan for Brexit, in response to a Labour Party motion, which some Tories would support. But she managed to add an amendment to the motion reaffirming parliament’s intention to trigger Article 50. Eaton’s judgement is that a majority in parliament will support Article 50, but a majority will also support membership of the single market (an option, we would point out, that may not even be available from the EU since only the EEA membership allows this). Eaton also quotes a senior Labour MP saying that he would not support the single market if that involved disrespecting the Brexit referendum - so it is not clear to us that the parliament would want to force a single market option in any case. 

And Ashoka Mody is among a small number of analysts who believe that Brexit could have a positive economic effect, by ending a dangerous bubble of foreign inflows in the UK property market which, in turn, drove up the value of the pound. He notes that, after Brexit, the weakness of the pound was strikingly correlated with weakness of property-related asset prices. And the softer the Brexit, the greater the risk that this bubble could blow up again.

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • June 01, 2017
  • On how to fix the eurozone
  • What happens if there is no Article 50 agreement?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 11, 2017
  • Germany rejects IMF’s policy recommendations before they are issued
  • Why Labour is losing
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 20, 2017
  • Don’t bet on Trump turning globalist
  • A note on UK election polls
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • March 27, 2017
  • Governing formation troubles - Northern Ireland edition
  • Did Trump present Merkel with a bill for Nato?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 08, 2018
  • Getting real on Brexit
  • Macron in China
  • March 02, 2017
  • Juncker's scenarios for Europe
  • EU minimum wages are rising
  • No, the Lords didn’t stop Brexit
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • November 15, 2017
  • A Christmas bonus for poor Greeks
  • Dim prospects of negotiated de-escalation on Catalonia
  • Macron's favourite to succeed Juncker - first round
  • On sovereignty
  • Gli Azzurri
  • February 03, 2017
  • The Schulz effect is getting huge
  • The post-Brexit boom goes on and on and on
  • A correction on Catalonia
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • December 01, 2016
  • Will Italian expats swing the referendum result?
  • Why we keep on misreading the polls
  • Si vis pactum, para bellum
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • October 19, 2017
  • Germany is softening up over Brexit
  • The French budget and the wealthy
  • Will Borut Pahor win re-election as Slovenian president?
  • April 20, 2017
  • Don’t bet on Trump turning globalist
  • A note on UK election polls
  • October 21, 2016
  • Wallonia says No for the third time
  • Do you remember that Dutch referendum on Ukraine?
  • How narratives are destroying the EU
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 22, 2017
  • The last German polls
  • May 15, 2017
  • SPD and CDU disagree on how to respond to Macron
  • Was Rajoy blackmailed?
  • The rise of the re-leavers
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 30, 2016
  • Brexit facts on the ground
  • Burkinis and Republican primaries
  • The SPD and TTIP
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 15, 2018
  • Is the section on Europe for real?
  • Can Drahos upset Zeman?
  • December 18, 2017
  • SPD regional party preemptively rejects grand coalition
  • Future of eurozone to be decided by March - we can hardly wait
  • November 21, 2017
  • A short note on the impact of German political chaos on Brexit
  • A scandal, overshadowed
  • October 27, 2017
  • What exactly happened in Catalonia yesterday?
  • Transactional versus strategic foreign policy
  • October 04, 2017
  • On why Theresa May is likely to survive
  • On how to resolve the Brexit talks
  • Social housing - not a good start for the French government
  • September 12, 2017
  • Brexit bill passes Commons
  • Macron to weather another political storm
  • Conservative PM re-elected in Norway
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • July 17, 2017
  • What Tony Blair's Brexit confusion tells us
  • Schulz advocates compulsory investments
  • Italy’s government has effectively lost its majority
  • June 26, 2017
  • Brexit - the central case and the tail-risk
  • The German fear of Macron
  • June 08, 2017
  • Day 0
  • Macron and his overly enthusiastic minions
  • May 22, 2017
  • Catalonia's independence blueprint
  • Commission wants completion of eurozone by 2025
  • The case for more honesty about the abolition of cash
  • The case against an Italian euro exit
  • May 05, 2017
  • Front National - thinking beyond Sunday
  • Tusk attacks Juncker over Brexit diplomacy
  • Extraordinarily ordinary
  • April 19, 2017
  • Shadows of money
  • Breppe Grillo vs Eurointelligence
  • April 03, 2017
  • On the meaning of the Navalny protests
  • On the surreal nature of Italy’s political debate
  • March 20, 2017
  • Does the language of communiques matter?
  • Spain snap election rumblings
  • Will there be a Brexit deal?
  • March 05, 2017
  • Poland vs Tusk
  • Juppé - a recovered candidate?
  • Will Italy leave the euro?
  • February 20, 2017
  • SPD ahead of CDU/CSU
  • Fillon bounces back
  • The Brexit timetable
  • February 09, 2017
  • The Lords have a choice - risk abolition or vote for Brexit
  • French secret service fears Russian support for FN
  • A whiff of revolution
  • Rajoy and Trump, best buddies
  • Violent fantasies around Catalonia
  • January 30, 2017
  • On the illusion of choice
  • January 20, 2017
  • What does cherry-picking mean?
  • Trump as Nixon
  • On the meaning of populism
  • January 12, 2017
  • Could Mélenchon make it into the second round?
  • Macron's ideals and recruitments
  • Has Brexit triggered a borrowing binge?
  • Towards a European IMF?
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • December 20, 2016
  • The politics of terror
  • On Lagarde
  • Is a disruptive Brexit possible?
  • December 16, 2016
  • Brexit on the ground
  • The EU/Ukraine agreement and the Dutch senate
  • A short observation about the future of the EU
  • December 12, 2016
  • Renzi without Renzi
  • Shall we compensate the losers of globalisation?
  • The need for a partnership with China
  • December 09, 2016
  • Why Five Star will gain
  • Ukip to target pro-Remain MPs in Brexit constituencies
  • Rutte plays tough on Ukraine
  • December 08, 2016
  • Schröder tells SPD to dump Merkel
  • Another third man?
  • Mainstream parties more popular in Ireland
  • Another inch towards Brexit
  • December 07, 2016
  • Matterella says No to early elections
  • Looking for alternatives to Valls?
  • Local taxes and citizenship in Ireland
  • Brexit contours