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October 18, 2017

Veneto and Lombardy to vote on autonomy

Next Sunday the Italian regions of Veneto and Lombardy will vote in consultative referendums on whether to initiate the process to increase their autonomy from the Italian state. While this is being billed by some foreign press as inspired by the Catalan referendum, the situations in Italy and Spain are very different. There is a qualitative difference between Catalan independence and the autonomy that the Italian regions seek and which Catalonia and other Spanish regions have enjoyed for nearly 40 years. There is also a difference in the constitutional basis for the referendums.

The referendums in Veneto and Lombardy are consultative, and have no minimum quorum for their validity. Their function is to give the local politicians confidence that their autonomy project has popular support before embarking on the legislative work. The legal basis for the referendums is Article 116 of the Italian constitution, which grants autonomy to five regions - Friuli Venezia Guilia, Sardinia, Sicily, Trentino-Alto Adige (South Tyrol), and Valle d'Aosta) and gives the rest of the Italian regions the possibility of attaining autonomy on the initiative of the interested region. The end result is an act of the Italian parliament, on the basis of negotiations between the Italian state and the region. This is analogous to the process described in Art 143 of the Spanish constitution and which divided Spain into seventeen autonomous communities in the early 1980s.

According to a short primer by Corriere della Sera, the regions of Veneto and Lombardy aim to acquire competences in twenty-three separate matters, including justice, international relations, civil protection, international trade, energy distribution, oversight of savings banks, environmental protection, and cultural heritage. With these competencies would come the direct management of a larger fraction of the public spending in the regions. At the core is the aim to reduce the difference between the taxes levied in each region and the amount of money spent by the government, which Lombardy estimates at €52bn and Veneto at €15bn annually. 

According to the few polls that have been published, the referendum in Veneto is likely to see participation above 65% with 80% in favour of autonomy, while that of Lombardy would have lower participation with at least 75% of voters voting yes. Local firms are in general favourable to autonomy. 

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October 18, 2017

Portugal's president calls on government over fires

Portugal has been fighting more than 500 fires ravaging the country since Sunday, and the death toll stands at 45 now. The conservative president Marcelo Rebelo de Sousa called on the socialist government to "bear all the consequences of this tragedy” according to Diario de Notizias. It is the second time in four months that Portugal has been hit by deadly wildfires after huge blazes in June, the worst in the country's history, killed 64 people. Portugal is covered with fast-burning eucalyptus trees which used to supply the country's paper industry, and it is also vulnerable to strong winds coming off the Atlantic. 

Referring implicitly to the motion of no confidence that the conservatives announced in parliament, the president said he hoped that parliament would "sovereignly clarify" the government's mandate and, if the government is confirmed, even "reinforcing it” so that such a tragedy will not happen again. The president calls for a quick inquiry and deep reforms in foresting and fire-fighting.

This should be backed by a broad alliance between the parties. The government decreed three days of mourning.

The region of Galicia in North-Western Spain, contiguous to Portugal, has also been fighting a similar wave of fires with four deaths and the number of active fires exceeding 100 on Monday. There is a widespread conviction that many of the fires in Galicia were intentional.

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October 18, 2017

Radical ideas for radical times: how to pay off public debt

How to solve the debt problem in the eurozone? France Stratégie, a think tank close to the French prime minister, has some radical ideas. Among them is one from the time of the French Revolution: to rein-in the debt Louis XVI left behind, the revolutionaries confiscated the wealth of the clergy. In their note, the authors do not suggest a nationalisation of church property, which in 1789 represented three quarter of the total. Instead their idea is to nationalise parts of the land on which housing is built. The state could then ask for rents to pay off the debt. Other proposals are the monetisation of public debt by the European Central Bank, or burden-sharing among member states. We are clearly in thinking-outside-the-box territory here. 

This provocative proposal was followed by a political outcry. But Jean-Marc Vittori warns that, while the situation is not the same as in 1789, the rise in debt is a longer-term problem that might require some unconventional solutions one day, especially once interest rates start rising again.

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