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Each week The Rendon Group’s media analysts will focus on a different continent and a different issue affecting that continent. As always, we remain available to answer any questions you may have and to provide additional information upon request. For more information regarding The Rendon Group’s products and services, please contact us at Alert@Rendon.com or +1-202-745-4900.
Paolo Gentiloni replaces Matteo Renzi as Prime Minister of Italy
Italian Prime Minister Matteo Renzi resigning from Parliament. (AFP)
This week’s snapshot focuses on the ongoing political turmoil in Italy. Following the referendum defeat for sweeping constitutional reforms on 04DEC, Italian Prime Minister Matteo Renzi announced his intention to resign from office. The proposed reforms would have strengthened the power of the central government at the expense of the Senate and were generally seen as an effort to stabilize the Italian political system. However, many Italians saw the vote as an opportunity to reject establishment politics in favor of populist parties such as the 5 Star Movement, which has been capitalizing public angst concerning economic stagnation, the migration crisis, and the European Union. Following consultations with Italy’s political parties, President Sergio Mattarella asked Foreign Minister Paolo Gentiloni to try to form a new government by 11DEC. Gentiloni accepted the offer, and if successful, will face a major economic crisis as soon as he enters office. The country’s banking system has been rocked by the turmoil, and the country’s third largest bank, Monte dei Paschi di Siena, likely needs state intervention to avoid collapse. All major political parties have called for new elections as soon as possible, but doing so would require a new election law approved by parliament.
News summary of events during the week of 05DEC16 – 12DEC16
Sample of Twitter handles tweeting about Italy’s referendum results and the ensuing political uncertainty.
@JoyAnnReid – Joy Reid, National Correspondent, MSNBC
Sample of Third Party Validators regarding Italy’s referendum results and the ensuing political uncertainty.
Adolfo Laurenti, Global Economist, J. Safra Sarasin
“While the reform has some intrinsic merits, the domestic debate is centered on the effort to unseat the prime minister. At the same time, financial markets see the vote as a test of the appetite of reform in the country.”
Mujtaba Rahman, Managing Director for Europe, Eurasia Group
“If Renzi’s referendum fails, it will be seen as another symbolic victory for the populists that portends greater risk for other states and the EU. It will make the EU defensive and inward-looking, and more incapable of addressing the problems that are giving rise to the populists in the first place.”
Erik Jones, Professor of European Studies and International Political Economy, SAIS Europe (Italy)
“Market participants are already questioning whether the ECB will be able to contain the pressure on Italian bond yields. [But] If Italy struggles to cover its redemption requirements next February, confidence in the ECB as buyer of last resort could be badly shaken.”
Lorenzo Kihlgren Grandi, Lecturer, Sciences Po (France)
“These two elections are very important. Pro-E.U. movements have to find ways to fight for the idea of Europe, for its diversity, for what it stands for.”
Federico Santi, Analyst, Eurasia Group
“What we have seen lately is a constant focus on the EU and how it limits what Italy can do to handle the banking crisis, which is portrayed as having a negative impact on households.”
Sample of open source research conducted by TRG analysts related to Italy’s referendum results and the ensuing political uncertainty.
Byline: Gavin Jones
Date: 07 December 2016
Rome, Dec 7 (EFE) – Italian Prime Minister Matteo Renzi resigned on Wednesday after a bruising referendum loss at the weekend, with most parliamentary factions pushing for an early election in a few months’ time.
The 41-year-old’s decision to quit after less than three years in office dealt a new blow to Western governments still in shock from Britain’s vote to leave the European Union and the election of outsider Donald Trump as U.S. president.
Media: EFE (Spain)
Date: 08 December 2016
Rome, Dec 8 (EFE) – Italy’s president is set to kick off on Thursday afternoon a round of consultations with parliamentary leaders to form a new government, following the resignation of Prime Minister Matteo Renzi.
The talks are scheduled to be held at the Quirinal Palace _ the head of state’s official residence _ where President Sergio Mattarella is set to meet with representatives of different parties starting at 5 pm GMT.
Media: Associated Press
Date: 08 December 2016
ROME (AP) — A leader of Italy’s 5-Star Movement is pressing for a vote on whether the country should keep the euro as its official currency.
Alessandro Di Battista, one of the populist party’s several leaders, said in comments published Thursday in La Repubblica newspaper that “euro and Europe aren’t the same thing.”
Date: 05 December 2016
BRUSSELS (Reuters) – Political instability in Italy makes life more difficult for Italy and the whole euro zone, but is not the start of new euro zone crisis, the chairman of euro zone finance ministers Jeroen Dijsselbloem said on Monday.
Italian Prime Minister Matteo Renzi said he would resign after his government lost a constitutional referendum last Sunday, throwing the country, which has bad loan problems in its banking sector, into political turmoil.
Media: Deutsche Presse-Agentur (DPA)
Byline: Alvise Armellini
Date: 05 December 2016
Rome (dpa) – Italian President Sergio Mattarella thwarted Prime Minister Matteo Renzi’s plan to quickly resign on Monday by telling the government head to keep doing his job until parliament sorts out the nation’s budget for next year.
The move was seen as an attempt to reassure markets amid uncertainty about Italy’s political future. The budget law was approved by the lower house of parliament on November 28, but still needs Senate ratification, and local media said it could come by Friday.
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