| Italy has 4th Government in 3 Years, the Last 3 Unelected; Questions of the Day Posted: 17 Feb 2014 05:05 PM PST Following the ouster of Italian prime minister Enrico Letta in a political party power struggle, Matteo Renzi Set for Mandate to Lead Italy's Next Government. Matteo Renzi will on Monday be formally handed the job of forming Italy's fourth government in just over two years with the aim of presenting his reform programme to parliament by the end of the week.
The 39-year-old leader of the centre-left Democrats, who ousted prime minister Enrico Letta in a party power struggle, has a mid-morning appointment at the presidential palace where he is expected to receive the mandate to govern from Giorgio Napolitano, Italy's 88-year-old head of state.
Despite Mr Renzi's hurry to take over following last Thursday's party coup, the timetable slipped over the weekend after his likely centre-right coalition allies asked for more time to agree on their agenda and the division of cabinet posts. Nonetheless, the presidential mandate will arrive in time to reassure financial markets at the start of the week that the process is moving ahead.
Although markets were relatively sanguine after Mr Letta's ousting, there is some concern that Italy's lending could increase should Mr Renzi consider breaching the 3 per cent budget deficit limit.
Fabrizio Saccomanni, outgoing finance minister, has added his voice to José Manuel Barroso, European Commission president, who prodded Mr Renzi to stay on course with Italy's economic reforms while maintaining fiscal discipline. Mr Saccomanni urged Mr Renzi not to contemplate breaching the budget deficit limit set by Brussels.
Mr Renzi's first challenge is to work out a coalition deal with Angelino Alfano, leader of the New Centre-Right, whose support is vital for the Democrats to secure the majority they lack in the Senate following inconclusive elections a year ago.
Mr Alfano, who held the posts of deputy prime minister and interior minister under Mr Letta, warned at the weekend: "We cannot do things in a rush.
Polls suggest a majority of Italians, while pinning their hopes on Mr Renzi breaking political logjams blocking reforms, do not approve of how the mayor of Florence reneged on his repeated promises to seek office only through the ballot box.
Opposition in parliament will be dominated by the centre-right Forza Italia of former prime minister Silvio Berlusconi and the anti-establishment Five Star Movement led by comic-activist Beppe Grillo.
Mr Renzi, who is not even a member of parliament, is set to become Italy's third prime minister after Mr Letta and technocrat Mario Monti, who were nominated by the head of state without having won an election. Questions of the Day- Can you have a mandate with no votes?
- Can someone who breaks repeated promises win confidence of his constituency?
- Can Renzi succeed in implementing badly needed reforms including dismantling union work rules, or will that stir up more pitchfork protests?
- Can Renzi possibly meet deficit targets mandated by the nannycrats in Brussels?
I propose the answer is "no" to all of the above questions. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
| Immigration Debate Rages in US and Europe; EU Strikes Back at Switzerland Posted: 17 Feb 2014 11:23 AM PST Debate over immigration rages in both the US and Europe. Let's take a look at the US first. On January 30, House Speaker John Boehner Released Immigration Principles. Speaker John A. Boehner of Ohio released his long-awaited immigration overhaul principles Thursday afternoon, for the first time laying out a broad GOP-backed pathway to legalized status for undocumented immigrants.
Boehner and other top Republicans have been talking about it for months, but the document lays out a draft for how Republicans want to take on the contentious issue, which is splitting their party at their annual retreat here. The party will discuss and potentially amend the document, and it is possible that it will not be accepted at all.
The principles stress interior and border enforcement must be enacted before mechanisms to legalization can begin and notes that Republicans do not favor a "special pathway" to citizenship for anyone who illegally traversed the border into the United States. However, it does present options for those roughly 11 million immigrants living in the country.
"These persons could live legally and without fear in the U.S., but only if they were willing to admit their culpability, pass rigorous background checks, pay significant fines and back taxes, develop proficiency in English and American civics, and be able to support themselves and their families (without access to public benefits)," the document states. "Criminal aliens, gang members, and sex offenders and those who do not meet the above requirements will not be eligible for this program." Boehner Blasted from the Right on Immigration Overhaul Those restrictions seem pretty severe. Nonetheless, a week after Boehner laid out his principles, the Tea Party wing of Republicans Denounced Immigration Reform. As House Republicans embarked late last month in luxury buses for their retreat on the Eastern Shore of Maryland, their ears were already ringing with angry phone calls. Heritage Action, the political arm of the conservative Heritage Foundation, was imploring its members to flood the Capitol with warnings to accept "no amnesty."
The day before, the Tea Party Patriots group set in motion 900,000 automatic phone calls in 90 Republican House districts, connecting tens of thousands of voters to their members of Congress. The hashtag #NoAmnesty blazed across Twitter. About the same time, FreedomWorks, another anti-tax, limited-government group, was pulling in signatures on its "fire the speaker" petition against the House speaker, John A. Boehner.
When House Republicans gathered on Jan. 30 to actually read and discuss Mr. Boehner's principles on immigration reform, his was already a losing battle.
"Why did we even put these out there?" asked Representative Tom Price, a respected conservative Republican from Georgia, urging leaders to set aside the issue until after the November elections.
A week later, Mr. Boehner shelved the issue, declaring Thursday that he could not move forward with a comprehensive overhaul of the nation's immigration laws until President Obama won the trust of the Republican conference.
"I would've been surprised if Boehner didn't do that," said Representative John Fleming, Republican of Louisiana and a leader in the opposition to immigration legislation. "Few things in politics are as obvious as this one. That's why there was a collective shrug in conservative leadership" when the speaker all but declared the measure dead.
Since October's government shutdown, Mr. Boehner has been in open warfare with outside conservative groups, dealing them one loss after another: reopening the government, winning overwhelming passage of a budget deal they opposed, then a trillion-dollar spending bill they loathed, and this week, securing a new agriculture law that largely kept the food stamp program intact over the objections of conservatives.
But on immigration, the groups flexed their collective muscles. Heritage Action and the Heritage Foundation rushed to claim credit. So did Tea Party Patriots and the conservative activist L. Brent Bozell and his ForAmerica group, which called for a clean sweep of the House Republican leadership if it moved forward on the issue.
"I think he feels the heat and has felt the heat," Mr. Fleming said of the speaker. "There has been a lot of talk that if the speaker had moved forward and forced members to vote, that would end his speakership. There was not much point in that." Let's now turn the spotlight on immigration battles in Europe. Swiss Voters Approve Immigration CurbsOn February 9, Swiss Voters Narrowly Approved Curbs on Immigration. A narrow majority of voters in Switzerland approved proposals on Sunday that would reintroduce restrictions on the number of foreigners who are allowed to live and work in the country, a move that could have far-reaching implications for Switzerland's relations with the European Union.
Switzerland, which is not part of the European Union, has one of the highest proportions of foreigners in Europe, accounting for about 27 percent of the country's population of about eight million. Many job seekers have arrived from countries hit hard by the European economic crisis.
Immigration has become a polarizing issue across Europe. More prosperous nations are growing worried that their welfare systems cannot handle an influx of workers from the economically weaker Eastern European countries.
Far-right parties with anti-immigrant platforms in France, the Netherlands and Norway have gained strength in recent years, and there have been sharp debates in Britain and Germany over limiting the number of immigrants from Bulgaria and Romania because citizens from those countries gained full access to European Union job markets this year.
The proposal passed with the support of 50.3 percent of those who voted; 56 percent of eligible voters cast ballots. The largest cities, Zurich and Basel, rejected the vote, and smaller cities and rural areas supported it.
The Swiss People's Party has been particularly skillful at using such popular votes to push for immigration controls in recent years. After growing pressure, the government reintroduced quotas in 2012 limiting the number of work permits that could be issued for European Union citizens.
The vote on Sunday also comes at a time when Switzerland is under intense pressure from France, Italy and other European countries that want its banking system to become more transparent. Last year, Switzerland and the United States reached a deal to punish Swiss banks that had helped Americans evade taxes.
"It is far more than a political slap in the face," the conservative newspaper Neue Zürcher Zeitung wrote in an editorial published on its website after the result was announced. "The Yes to the 'Massive Immigration Initiative' is a censure that is comparable to No to the European Economic Area. EU Strikes Back at Swiss CurbsStating Switzerland needs the EU more than vice versa, the EU is hitting back at Switzerland. Via translation from El Pais, EU imposes penalty on Switzerland for its immigration policy. The Swiss referendum to halt European immigration has already had its first consequences. The European Commission halted negotiations with Switzerland to determine their participation in major research programs and the Erasmus project worth an estimated €80 billion.
Brussels had warned that freedom of movement between the two governing territories since 2002 was not negotiable and that if the Swiss government renounced welcome Croats, as had been committed to The rest of negotiations would decay.
The Commission spokesman has confirmed that negotiations have stalled. "Given the circumstances of the referendum and in the absence of a clear political signal the Swiss authorities postponed the meeting," said the representative of the EU executive.
The European Union had warned that an obstacle to free movement would have consequences in other integration agreements signed between the two territories. The EU may repeal or renegotiate agreements that allow Swiss products advantageous access to the EU market. 60% of Swiss export go to EU countries. Hallmarks of Deflationary TimesTrade wars, immigration battles, and especially beggar-thy-neighbor competitive currency debasement tactics are hallmarks of deflationary times. When jobs are plentiful, such pressures are minimal. Now, every country seeks advantages for itself, hoping to raise exports. Related EventsPolitical Battle to Devalue the Euro: Montebourg Complains "Europe a Victim of Currency Wars", Seeks "Political Battle" to Devalue the EuroSpanish Builders Invade France: Invasion of Spanish Builders Angers French Construction Companies Struggling to Compete.Italy Pitchfork Protests: Pitchfork Protesters Battle PoliceItaly President Warns of Social Unrest: Italy's President Warns of "Widespread Social Tension and Unrest" but Offers No Solutions; "Pitchfork Protest" Comments From ItalyRise of Beppe Grillo: Youth Vote Propels Five Star Movement Into First Place as Largest Political Party in Italy. Grillo now vows to Shake Up Europe in May Elections. Grillo accused the Italian government of abandoning sovereignty and calls for a referendum on euro membership. Separatist Movement Takes Hold: Political anxiety is heating up in Spain. In a direct challenge to Spain's central government Catalonia Political Parties Agree to Hold Independence Referendum. UK Debate Over EU Exit: By a 46-30 margin, UK voters want to exit the European Union. The poll was fresh on the heels of an announcement that former cabinet minister Michael Portillo and Lord Lawson call for Britain to leave the EU. Lawson was Thatcher's longest-serving chancellor Abenomics to the Forefront: Prime minister Shinzo Abe is a dream come true for Keynesian and Monetarist theorists. Abe is hell-bent on destroying the value of the Yen with QE and fiscal stimulus. Abe Calls for Wage-Price Spiral to Create "Virtuous Circle". How's Abenomics going? The answer is not well. Prices are only up a bit in spite of a huge plunge in the Yen. Competitive Currency Debasement: Central bankers in the US, Japan, China, Australia, Canada, the UK, Switzerland, and the EU all want a weaker currency. Mathematically it's impossible. But that has not stopped the game of beggar-thy-neighbor global currency debasement. Further Deflation DiscussionFor further deflation discussion please see ... Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com |
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