Renzi Resigns, Italy Split Down the Middle, War on the Spanish Right

Italy’s center-left leader, Matteo Renzi, has stepped down after his Democratic Party fell from first to fourth place in the election on Sunday.

I argued here in January that Renzi had two challenges: uniting the left and convincing voters he could still deliver reforms.

He failed at both. He watered down labor reforms in an attempt to appease the left wing of his party, but they walked out anyway. He didn’t secure a supermajority for constitutional reforms, necessitating a referendum to which he then foolishly tied his own political career.

Renzi did get important things right, not in the least recognizing that the future of the Democratic Party lies not with old working-class voters but with the young and college graduates. Yet he failed to dissuade them from supporting the Five Star Movement. Read more “Renzi Resigns, Italy Split Down the Middle, War on the Spanish Right”

Grand Coalition Wins Vote in Germany. Next Problem: Italy

Sigmar Gabriel Angela Merkel
German party leaders Sigmar Gabriel and Angela Merkel walk to a news conference in Berlin, June 29, 2015 (Bundesregierung)

In the end, it wasn’t even close. Nearly twice as many German Social Democratic Party members voted in favor of another grand coalition with Angela Merkel’s conservatives as voted against it. The results of the internal poll were announced on Sunday.

Parliament is due to confirm Merkel for a fourth term as chancellor next week. If she sits this one out, she will be Germany’s longest-ruling leader since Helmut Kohl.

Neither of the two major parties is out of the woods yet. The Social Democrats have fallen in the polls, losing support to, well, everyone. Merkel’s Christian Democrats are facing competition from the Free Democrats on the right and the Alternative on the far right. The party will debate in the coming years whether to continue Merkel’s centrist line or lurch to the right.

For now, though, the center can still hold. Read more “Grand Coalition Wins Vote in Germany. Next Problem: Italy”

No Party or Coalition Wins Majority in Italy

  • Italians elected a new parliament on Sunday.
  • The populist Five Star Movement and (formerly Northern) League made gains at the expense of mainstream parties.
  • Neither the combined right nor a left-right coalition of Matteo Renzi’s Democrats and Silvio Berlusconi’s Forza Italia would have a majority. Read more “No Party or Coalition Wins Majority in Italy”

Left-Right Coalition Would Be Best Outcome for Italy

Matteo Renzi
Italian prime minister Matteo Renzi answers questions from reporters in Berlin, Germany, July 1, 2015 (Palazzo Chigi)

There are two realistic outcomes to Italy’s election on Sunday: a right-wing government that includes the xenophobic Brothers of Italy and Northern League or a German-style grand coalition between Silvio Berlusconi’s Forza Italia and the Democrats.

The second would be better for Italy and for Europe. To make that outcome more likely, Italians should vote for the center-left. Read more “Left-Right Coalition Would Be Best Outcome for Italy”

Trump Launches Trade War, Berlusconi Confirms Tajani Candidacy

Donald Trump Angela Merkel
American president Donald Trump speaks with German chancellor Angela Merkel at the G20 summit in Hamburg, July 6, 2017 (Bundesregierung)

Against the advice of literally all but two of his advisors, American president Donald Trump has announced tariffs on aluminum and steel of 10 and 25 percent, respectively.

The tariffs are not in effect yet, but, citing national-security concerns, the president does have the authority to impose them unilaterally.

The European Commission, which is responsible for EU trade policy, quickly condemned the “blatant intervention to protect US domestic industry” and said it would present countermeasures in a matter of days.

Remember when we were talking about a Transatlantic Trade and Investment Partnership only a few years ago?

Politico has more on the challenge to Europe. Also read my story from July about Trump’s obsession with dying industries at the expense of retail and tech. Read more “Trump Launches Trade War, Berlusconi Confirms Tajani Candidacy”

Merkel Wins Party’s Support, Berlusconi a Warning to Americans

Angela Merkel
German chancellor Angela Merkel arrives in Meise, Belgium to meet with other European conservative party leaders, December 19, 2013 (EPP)

Delegates (not party members) of Germany’s Christian Democratic Union (CDU) have voted overwhelmingly in favor of continuing the “grand coalition” with the Social Democrats. The waiting is now for the latter, who conclude a membership vote on Sunday.

The same CDU congress has named Annegret Kramp-Karrenbauer, the moderate prime minister of Saarland, as party secretary and Jens Spahn, a right-wing critic of Angela Merkel’s immigration policy, as candidate for health minister.

Jeremy Cliffe argues in The Economist that the two appointments hint at a healthy ideological debate in the party:

In recent years, Mrs Merkel’s electorally successful, highly tactical and ideologically indistinct brand of centrism has smothered the contrasts between [the CDU’s] different ideological tendencies: liberal, Christian social and conservative. Now, however, a new period of cut-and-thrust in the party seems to be emerging.

Read more “Merkel Wins Party’s Support, Berlusconi a Warning to Americans”

Dutch Hope for Smooth Brexit, Russians Have Little Faith in Trump

Mehreen Khan reports for the Financial Times that the Dutch are lobbying both sides in the Brexit negotiations: They are pleading with the Brits to decide what they want and trying to ensure in Brussels that the United Kingdom is given plenty of room to reverse course or rethink red lines, whether it be on the customs union or anything else.

The reason: close relations across the North Sea.

Britain’s erstwhile continental ally has been a reliable partner on everything from EU budget contributions to the single market but is now uniquely exposed to the economic and emotional side-effects of Brexit.

In France, by contrast, attitudes have hardened. Since Emmanuel Macron’s election last summer, the share of French voters who wish the British would change their minds has fallen. Tony Barber argues that Brexit is now seen as not a loss but a potential gain to France. Read more “Dutch Hope for Smooth Brexit, Russians Have Little Faith in Trump”

Nobody Is Happy in Germany, League Calls for Italian Euro Exit

German parliament Berlin
Reichstag in Berlin, Germany (Unsplash/Fionn Große)

Nobody in Germany is happy with the deal Angela Merkel struck with the Social Democrats this week.

Politico reports that conservatives are upset she gave the Finance Ministry to the left. The party’s youth wing is openly calling for Merkel’s replacement.

The Financial Times reports that Martin Schulz is testing his Social Democratic Party’s (SPD) unity by joining the new government as foreign minister.

Tilman Pradt argued here the other day that Schulz has wasted away his credibility by reneging on his promise never to serve under Merkel. “Given the fate of its sister parties in Europe,” Pradt wrote, “the SPD should have been aware of the dangers of putting personal ambitions over party politics.” Read more “Nobody Is Happy in Germany, League Calls for Italian Euro Exit”

Six Economic Challenges for Italy’s Next Government

Milan Italy
Piazza del Duomo in Milan, Italy, November 24, 2009 (Bjørn Giesenbauer)

Valentina Romei reports for the Financial Times that, despite economic improvements, Italy is still a laggard among its European peers.

She lists six economic challenges for the country’s next government.

  1. Slow growth: Italy is one of the few rich countries where output has not yet returned to pre-crisis levels.
  2. Low productivity: Means businesses need more and more workers to produce the same value of output as in other major economies.
  3. High public debt: Now 132 percent of GDP, making Italy’s the third-highest public debt in the developed world, after Japan and Greece.
  4. High bank debt: Italian banks make up the EU’s largest slice of non-performing loans, which curtail banks’ ability to lend.
  5. Youth unemployment: One in three Italians under the age of 25 are out of work. Italy also has second-lowest employment rate of recent graduates in the EU after Greece.
  6. Low foreign investment: Reforms have made it easier to start and run a business, but investment has yet to catch up. Read more “Six Economic Challenges for Italy’s Next Government”