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Italy

What kind of Italian prime minister would Angelino Alfano make?

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Due to electoral law considerations, Italy hasn’t seen any new election polls in 12 days, but when the polling blackout began, one thing seemed certain — former prime minister Silvio Berlusconi had cobbled together a strong centrodestra (center-right) coalition that had narrowed the once insurmountable lead of the centrosinistra (center-left) to within single digits.Italy Flag Icon

It still seems unlikely that Berlusconi could pull off a comeback that would return the centrodestra to power, but if he actually does, he has agreed not to return as prime minister in the next government.

In a bid to bring the autonomist Lega Nord (Northern League) into his coalition, Berlusconi pledged to the Lega Nord‘s leaders in January to put forward former justice minister Angelino Alfano as a candidate for prime minister instead — that now looks like a wise move, given that the coalition has come within striking distance of the centrosinistra only because of the relative strength of the Lega Nord‘s supporters in northern Italy.

In particular, the centrodestra remains essentially tied to win the Italian senatorial elections in the region of Lombardy, Italy’s wealthiest and most-populous, on the strength of the Lega Nord.  Although Lombardy leans right in most years, Berlusconi’s unpopularity has put the region in play; in simultaneous regional elections, the Lega Nord‘s national leader Roberto Maroni is running a spirited campaign to become regional president.

Notwithstanding his pledge, Berlusconi, as the leader of the Popolo della Libertà (PdL, People of Freedom), has led a characteristically spirited anti-austerity and populist campaign.  Unlike the PdL and the main center-left party, the Partito Democratico (PD, Democratic Party), the Lega Nord never backed the technocratic government of prime minister Mario Monti in November 2011.

In a world where everyone has expected that Pier Luigi Bersani will lead the next Italian government, what would it mean if Alfano were suddenly in line to become Italy’s next prime minister?

First and foremost, you should expect that even if Berlusconi isn’t technically heading Italy’s government, he won’t be too far away from the thick of things.  He’s said that he would serve in government as Alfano’s finance minister (of all posts, you’d think Berlusconi wielding power over Italy’s finances would terrify investors and bondholders, to say nothing of German chancellor Angela Merkel).

So there’s a chance that Alfano would serve as the Dmitri Medvedev to Berlusconi’s Putin — that’s something you might expect in Russia, but it’s not quite best practices for a thriving democracy or for Europe’s fourth-largest economy.

Alfano currently serves as party secretary of the PdL and, when Berlusconi stepped down as prime minister in November 2011, he indicated he would leave frontline politics and quickly anointed Alfano — over older figures like former finance minister Giulio Tremonti or the more staunchly conservative Rome mayor Gianni Alemanno — as his preferred successor.

Berlusconi being Berlusconi, of course, Italy was subject to an on-again, off-again Hamlet act from Il cavaliere, who gave contradictory indications about a return to politics before confirming in December 2012 that he would lead the PdL into the next general election.

So what of Alfano himself? Continue reading What kind of Italian prime minister would Angelino Alfano make? →

Italy

History shows Italy’s likely center-left coalition will likely be short-lived and tenuous

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In the last days of Italy’s election campaign, it’s become somewhat conventional wisdom that although the broad centrosinistra (center-left) coalition headed by prime ministerial candidate Pier Luigi Bersani is still on target to win control of Italy’s lower house of parliament, the Camera dei Deputati (House of Deputies), it’s now a toss-up as to whether Bersani’s coalition will win enough of the 315 seats up for election to the upper house, the Senato (Senate), to form a stable government.Italy Flag Icon

The reason is based on some odd quirks of Italian electoral and constitutional law — the key point is that while elections to both the Camera dei Deputati and the Senato are conducted according to proportional representation, seats are awarded differently between the two.  The party or coalition that wins the largest proportion of the vote nationally will be guaranteed at least 54% of the seats in the Camera dei Deputati, but seats are awarded to the Senato only on a regional basis, so that the largest vote-winner in each of Italy’s 20 regions is guaranteed a majority of the region’s seats.  Given that Lombardy, Campania and Sicily, three of Italy’s four largest regions, are essentially tossups, the centrodestra could win those three regions and deny Bersani a senatorial majority.

For Bersani to control the lower house, but not the upper house, of Italy’s parliament is certainly somewhat of a nightmare for a campaign that led by double digits when the campaign began.

Thus the hand-wringing that Bersani will be forced to assemble a governing coalition that includes not only his electoral partner, the socialist Sinistra Ecologia Libertà (SEL, Left Ecology Freedom), the party of the two-term regional president of Puglia, Nichi Vendola (pictured above, left, with Bersani, right), but also turn to other partners — practically, this means some sort of alliance, in the upper house at least, with the centrist coalition led by prime minister Mario Monti, Con Monti per l’Italia (with Monti for Italy).

If the senatorial balance were, however, incredibly close (say, one to three seats), Bersani might also turn to a tiny number of senators likely to be elected from the predominantly communist Rivoluzione Civile (Civil Revolution) coalition, though it remains to be seen whether they would back Bersani — Vendola would certainly find more common cause with them than with Monti and his allies.

Monti and Vendola have mutually ruled out serving together in the same coalition — although Bersani has already committed to many of the reforms that Monti began, Vendola has been much more critical of the Monti government’s efforts, whcih have included tax increases and tax and labor reform.

It doesn’t help that Vendola, who is openly gay and supports same-sex marriage in Italy, is at contretemps with the social conservative bent of Monti’s coalition.  Although Monti has expressly opposed same-sex marriage and adopt by same-sex couples, the coalition includes the Unione di Centro (UdC, Union of the Centre), comprised of former Christian Democrats and led by Pier Ferdinando Casini, who has very close ties to the Vatican, and Futuro e Libertà per l’Italia (FLI, Future and Freedom), a party formed by Gianfranco Fini, a moderate who once served as Silvio Berlusconi’s foreign minister.

There are no easy answers for Bersani, and on Monday, Wolfgang Münchau at The Financial Times predicted a re-run of the prior leftist government of former prime minister Romano Prodi, who came to office in April 2006 as the moderate head of a wide-ranging leftist coalition that included relatively moderate former Christian Democrats, more progressive social democrats and die-hard communists (including Fausto Bertinotti, who became the president of the Camera dei Deputati from 2006 to 2008).

That government fell in early 2008 over a vote of no confidence in the Senato, when senator-for-life and former Christian Democratic prime minister Giulio Andreotti scuttled an attempt to pass equal civil rights for same-sex partners.

So Münchau is right to predict that the chances of a full five-year — or even one-year — government are fairly slim in the event of an unwieldy coalition that would include not only Vendola and Bersani (difficult enough), but also Casini, Fini and Monti.

That will certainly cause even more hand-wringing and not just in Milan and Rome, but in Berlin, Brussels, London and Washington, too — without a stable government to assure investors, a new Italian financial crisis could once again endanger the future viability of the single currency.  That’s assuming that Italy, and the other troubled economies of the eurozone, finds a path out from the wilderness of increasing unemployment and low or declining GDP growth.  The reality is that the next government, whether led by Monti, Berlusconi or Bersani, will face a lot of incredibly difficult and painful choices for Italy’s future.

But the troubling precedents go beyond the most recent Prodi government — the Italian left has been long fragmented and disorganized since the end of the ‘first republic’ and the breakup of the former Partito Comunista Italiano (PCI, Italian Communist Party), which goes a long way in explaining how dysfunctional leftist governments have been in Italy.  Continue reading History shows Italy’s likely center-left coalition will likely be short-lived and tenuous →

Italy

Monte dei Paschi scandal gives shares of blame to Italian left, right and center

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Monte dei Paschi

Founded in 1472, it’s the oldest bank in the world, but the Bank of Monte dei Paschi di Siena has proven that it can still surprise the world, for better or worse.Italy Flag Icon

The news last month that Monte dei Paschi lost €730 million from dodgy financial products between 2007 and 2009 and, even worse, that the bank hid those losses were hidden from regulators, caught everyone off guard, including not only Italy’s politicians just weeks before its general election, but even Mario Draghi.  Currently the head of the European Central Bank, Draghi served as the head of Italy’s central bank at the time Monte dei Paschi incurred the losses, an embarrassing oversight for the man whose ‘do-whatever-it-takes’ mantra has kept the eurozone’s sovereign debt crisis at bay since summer 2012.

Monte dei Paschi is Italy’s third-largest bank, which posted revenue of over €4 billion in 2010 before posting losses of €4.7 billion in 2011 and, as of last September, €1.7 billion in losses for 2012, a figure that’s sure to rise.

After its listing on the Italian stock exchange in 1999, it began an aggressive phase of expansion, acquiring several local banks as well as Banco Antonveneta from the Spanish bank, Banco Santander — the hidden derivatives that Monte dei Paschi entered into in order to finance those expansions are at the heart of the current scandal.

The crisis has helped no one in the Italian election — there’s enough blowback from the scandal to implicate not only Draghi’s bank regulators, but to have hurt leaders of Italy’s left, right and center at a time when disillusion among the Italian political elite is running as high as ever. Continue reading Monte dei Paschi scandal gives shares of blame to Italian left, right and center →

Italy

How the Italian election, Bersani’s to lose, became a Berlusconi-Monti dogfight

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There are now less than two weeks to go before Italians select a new prime minister, and if you watched the dueling soundbites, you would be forgiven if you thought the two main contenders were current prime minister Mario Monti and former prime minister Silvio Berlusconi.Italy Flag Icon

But while Berlusconi and Monti have taken up much of the headlines, the centrosinistra (center-left) coalition headed by Pier Luigi Bersani, the leader of Italy’s center-left Partito Democratico (PD, Democratic Party), still seems more likely than not to win the Feb. 24 and 25 parliamentary elections, guaranteeing a majority in the 630-member Camera dei Deputati (House of Deputies), the lower house of the  Parlamento Italiano (Italian Parliament) and a plurality of the seats among the 315 elected members of its upper house, the Senato (Senate).

As of last Friday — the last day under Italian law that new polls can be published in advance of the election — the broad centrosinistra coalition still held a single-digit, but steady, lead over the centrodestra coalition dominated by Berlusconi’s Popolo della Libertà (PdL, People of Freedom).  After consolidating the center-right, especially by gaining the support of the autonomist Lega Nord (Northern League), Berlusconi’s coalition has pulled to within a modest deficit with the centrosinistra, despite the fact that polls show his PdL with less than 20% support and the PD with consistently over 30%.

Meanwhile, the centrosinistra coalition has lost some support to both the centrist coalition headed by Monti, the outgoing technocratic prime minister, and the anti-austerity protest Movimento 5 Stelle (M5S, the Five Star Movement) of comedian Beppe Grillo was also gaining steam going into the final two weeks of the campaign.

So if the centrosinistra lead has been whittled down a bit, the race to govern Italy still seems like Bersani’s fight to lose.  It’s a much more fragile lead than it was when the campaign started, but in Italy, you’d expect the race to tighten, especially with Berlusconi’s full-court press — even in his weakened political state, Berlusconi remains one of Italy’s richest men, and he commands a significant amount of media control.

Since the start of the campaign, even with Bersani and his center-left allies campaigning hard, sparks have flown strongest not between Bersani and Berlusconi, but between Berlusconi and Monti.

Monti, in shifting from an above-the-fray technocrat to an off-with-the-gloves politician, has attacked Berlusconi as the ‘pied piper’ of Italian politics, mocked his ‘family values’ by referencing Berlusconi’s tawdry sex scandal-ridden past, and said that a victory for Berlusconi would be a ‘disaster’ for Italy.  Earlier this week, he attacked Berlusconi’s promise to abolish — and refund to taxpayers — an unpopular housing tax as a ruse to buy votes with money the Italian government doesn’t have.

Berlusconi, for his part, launched his campaign in December 2012 by accusing Monti of dragging Italy back into recession with ‘German-centric’ policies and, despite an odd offer before Christmas to step down in favor of a united Monti-led coalition, has hammered away at Monti’s efforts to appease European interests from Brussels to Berlin, efforts that Berlusconi claims have come at the cost of improving everyday life in Italy.

In the midst of the back-and-forth between il cavaliere and il professore, where exactly does that leave the centrosinistra? And how did Berlusconi and Monti, whose parties have arguably less support than either of Bersani’s PD or Grillo’s Five Star Movement, come to dominate the campaign?

Continue reading How the Italian election, Bersani’s to lose, became a Berlusconi-Monti dogfight →

Italy, Lombardia

Lombardy looks to post-Formigoni era in toss-up regional elections

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Inside Vittorio Emanuel II

Although Italy will hold national elections on February 24 and 25, three regions will hold elections as well — Lombardy, Lazio and Molise.

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None of those will be more important than those in Lombardy (or Lombardia in Italian), the most populous region of Italy and, as home to Milan, Italy’s financial and fashion capital, also its wealthiest region.

Since the fall of the so-called ‘first republic’ with the implosion of Italy’s Christian Democratic party in the early 1990s, the centrodestra (the center-right) has dominated regional politics in Lombardy and, since 1995, Roberto Formigoni has served as Lombardy’s regional president, consistently winning outsized victories against the centrosinistra (the center-left) in 2000, 2005 and most recently, 2010.

Formigoni (pictured below), however, is not running for reelection — he announced the resignation of the regional legislature in October 2012 after his colleague, Domenico Zambetti, was arrested for purchasing votes from the ‘Ndrangheta — the local organized crime operation of Calabria — during the 2010 elections.

As such, ending corruption in the region’s government has taken center-stage in one of Europe’s wealthiest regions.

formigoni

Realistically, that means that the centrosinistra has its first real shot at winning regional power in Lombardy, though the centrodestra‘s strength is such that, despite its scandal-plagued woes, it remains very much capable of winning yet another term in power.

It would be nearly the equivalent of the Democrats in the United States taking control of the government of the state of Texas  — a political earthquake, even more of a surprise for the left than in the regional elections in Sicily in October 2012, when Rosario Crocetta became not only the island region’s first leftist president, but also its first openly gay president.

Voters will choose the regional president in a direct vote — the winner and the runner-up, as leader of the opposition, are guaranteed a seat in the 80-member Consiglio Regionale della Lombardia (Regional Council of Lombardy). The remaining 78 members of the Regional Council are selected pursuant to a proportional representation system, tied both to the presidential vote and to a separate party-list vote.

Polls show both the direct presidential vote and the vote for the Regional Council are incredibly tight.

Roberto Maroni, who became the national leader of the Lega Nord (LN, Northern League) in July 2012 after the resignation of longtime leader Umberto Bossi, is running as the candidate of the centrodestra — the Lega Nord‘s local branch in Lombardy is the Lega Lombardia (LL, Lombardy League), and it has been the longtime ally in Lombardy of the conservative Popolo della Libertà (PdL, People of Freedom) of Silvio Berlusconi.

Maroni (pictured below) has pledged to step down as the leader of the Lega Nord after the regional elections in February, regardless of whether he becomes the next regional president, apparently ending what’s been a long and fairly successful career in national politics.  Most recently, in Berlusconi’s previous government from 2006 to 2008, Maroni served as minister of the interior.

maroni

A victory for Maroni would not only showcase the strength of the centrodestra‘s hold on Lombardy, but would be a huge boost for the Lega Nord, which has advocated more autonomy for the relatively wealthier northeast and center-north of Italy — and, at times, even its complete secession from Italy.

The candidate of the centrosinistra, Umberto Ambrosoli, is the son of Giorgio Ambrosoli, an attorney murdered in 1979 as a result of his investigation into the irregularities of a the Mafia-connected banker, Michele Sindona.

Polls show each candidate winning between 35% and 40% of the vote, often trading leads. Continue reading Lombardy looks to post-Formigoni era in toss-up regional elections →

Italy

Italian prime minister Mario Monti has a ‘Goldilocks’ problem

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One of the enduring questions of the Italian election has been whether outgoing prime minister Mario Monti will run or not.Italy Flag Icon

Given the popularity of his reforms with the European Union leadership generally and with international investors, his return as prime minister after the February elections is by far their top preference.  Any indication that Italy will make a U-turn on its recent reforms could send Italian bond rates skyrocketing back to the 7%-and-climbing levels of November 2011.

Presumably, too, Monti would very much like to return for a longer term as prime minister to see through further reforms, further budget cuts, and be remembered as the ‘grown-up’ prime minister that put Italy on a long-term path for future growth.

But it’s an important question not just for Italy, but for all of Europe, and the U.S. economy as well.

Legally, of course, Monti cannot run for office in his own right because he’s a senator for life’ and thus, is unable run for a seat in Italy’s lower parliamentary house, the Camera dei Deputati (House of Deputies) — but that’s not really an answer as to whether he’s ‘running’ or not.

Over the weekend, Monti sort-of emerged as a candidate for the elections — he said he is ‘willing’ to lead a coalition of small centrist parties, each of which would vote to install Monti as prime minister for a second Monti-led government.  He had harsh words for Silvio Berlusconi, who has returned, despite his massive unpopularity, to lead the conservative Popolo della Libertà (PdL, People of Freedom) by asserting over the weekend that Berlusconi has demonstrated a ‘certain volatility in judgment’ — an incredibly muted criticism, perhaps, but a criticism nonetheless.  He continued his aggressive tone today with respect to Pier Luigi Bersani, who leads a center-left coalition that features the  Partito Democratico (PD, Democratic Party), by urging Bersani to silence the extremists within his own alliance.

It’s an incredibly difficult tightrope walk for Monti, given that the polls show his coalition is set to finish no better than fourth, so the only way he can return as prime minister is through the election of a hung parliament.

Monti must at least provide a pro forma argument for supporting the ‘pro-Monti’ coalition, or he would risk minimizing the number of votes that will go to the ‘Monti coalition’ — without at least some floor of campaign activity from the incumbent prime minister himself, votes will inevitably slip away from the center to the two main center-right and center-left blocs, leading to what polls show would be a clear win for Bersani, not a hung parliament.

If Monti campaigns too hard, however, he risks diminishing his above-the-fray ‘technocratic’ mien.  He’s already done that now, to some degree, by directly engaging his political rivals.  But more fundamentally, if Monti campaigns too hard and voters are seen to have directly rejected Monti, he will have diminished not only his own political capital, but the cause of political reform that’s been his government’s chief aim.  His political rivals will feel even less pressure to continue Italy’s reformist path.  Continue reading Italian prime minister Mario Monti has a ‘Goldilocks’ problem →

Japan

Twelve considerations upon the DPJ wipeout in Japan’s legislative elections

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Japan

Well, that was quite a blowout.  Just a little more than three years after winning power for the first time in Japan, the Democratic Party of Japan (DPJ, or 民主党, Minshutō) was reduced to just 57 seats in a stunning rebuke in Sunday’s Japanese parliamentary elections.

Japan

Shinzō Abe (安倍 晋三), former prime minister from 2006 to 2007, will return as prime minister of Japan, and the  Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō), which controlled the House of Representatives, the lower house of Japan’s parliament, the Diet, for 54 years until the DPJ’s win in 2009, has seen its best election result since the early 1990s, with 294 seats.  Among the 300 seats determined in direct local constituency votes, the LDP won fully 237 to just 27 for the DPJ.  An additional 180 seats were determined by a proportional representation block-voting system, and the LDP won that vote as well:

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In contrast, the DPJ has fallen from 230 seats to 57 seats — by the far the worst result since it was created nearly two decades ago.  Its previous worst result was after the 2005 elections, when the popular reformist LDP prime minister Junichiro Koizumi (小泉 純一郎) won an overwhelming victory in his quest for a mandate to reorganize and privatize the bloated Japanese post office (a large public-sector behemoth that served as Japan’s largest employer and largest savings bank).

Outgoing prime minister Yoshihiko Noda (野田 佳彦) has already resigned as the DPJ leader, and a new leader is expected to be selected before the new government appears set to take office on December 26.

The result leaves Abe with the largest LDP majority in over two decades — together with its ally, the Buddhist, conservative New Kōmeitō (公明党, Shin Kōmeitō), led by Natsuo Yamaguchi (山口 那津男), which increased its number of seats by 10 to 31, Abe will command over two-thirds of the House of Representatives, thereby allowing him to push through legislation, notwithstanding the veto of the Diet’s upper chamber, the House of Councillors.

It’s a sea change for Japan’s government, and we’ll all be watching the consequences of Sunday’s election for weeks, months and probably years to come.  Just a full working day after the election, events in Japan’s politics are moving at breakneck speed.

For now, however, here are 12 of the top takeaway points from Sunday’s election: Continue reading Twelve considerations upon the DPJ wipeout in Japan’s legislative elections →

Japan

Can Shinzō Abe boost Japan’s economy?

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Over at Slate, Matthew Yglesias made the argument last week that the likely victory of former prime minister Shinzō Abe (安倍 晋三) and the return of the Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō) to government after a three-year hiatus means that Japan might finally embark on a path of more expansionary monetary policy — namely, more quantitative easing and a higher inflation target. Japan

With Japan apparently headed back into a recession — its fifth in 15 years — that strategy could be the surest way to boost the Japanese economy, but it’s a little naive to believe Abe can command enough political support, even with a landslide victory in Sunday’s election, to dictate monetary policy to the Bank of Japan.

Earlier in the campaign, Abe pledged to force the Bank of Japan to purchase construction bonds directly from the Japanese government (although, as Yglesias notes, Abe has already backed down from that pledge during the campaign).  Abe needs the BOJ to buy those bonds in order to finance additional infrastructure spending, with the LDP calling for up to ¥200 trillion ($2.4 trillion) in public works over the next decade.  Public spending is an old LDP favorite, but that staggering amount of spending could well pull Japan’s economy out of recession and deflation.

Abe has also pledged to appoint a new bank governor — the term of the current Bank of Japan governor Masaaki Shirakawa (白川 方明) ends in April 2013 after five years heading the BOJ — who agrees to set an annual inflation target of 2% or even 3%.

Abe’s push for expansionary fiscal and monetary policy comes as a bit of a 180-degree turn, given that the third and final government of the Democratic Party of Japan (DPJ, or 民主党, Minshutō) under prime minister Yoshihiko Noda (野田 佳彦) recently expended its last gasp of governing willpower to double Japan’s consumption tax from 5% to 10%, which is scheduled to begin in 2014.

It seems much likelier that Abe could implement a new round of fiscal expansion than strong-arm the Bank of Japan, which has an extraordinary amount of central bank independence — derived in part from the memory of hyperinflation that resulted after World War II when politicians controlled monetary policy decisions.

Noda (pictured above, right, with Abe) has attacked Abe’s platform as a dangerous intrusion on central bank independence and he has attacked the LDP plan for additional debt-financed spending as the same old LDP  ‘baramaki’ (pork barrel) politics, especially given Japan’s debt-to-GDP ratio is already, by far, the world’s largest, at around 230%.  Greece, by the way, has only a 160% ratio.

Japan has traditionally been able to carry such a high ratio because much of that debt is held by its citizens, who collective have one of the top savings rates in the industrialized world, but with $13.64 trillion in debt already on its public books, it’s not clear whether Japan could sustain public spending that would boost its debt-to-GDP ratio to nearly 300%.

As Yglesias notes, the Bank of Japan has been criticized for nearly two decades for its policy to keep Japan’s inflation target at zero:

Back in 1999, Ben Bernanke condemned the self-induced paralysis of Japanese monetary policy made by flailing officials who claimed it was beyond their power to fix this. He called for “Rooseveltian resolve” on the part of Japan’s leaders to shake the bank out of its torpor.  Paul Krugman, too, spent the late ’90s urging Japan to aim for more inflation, arguing that mucking around with the banking system was inadequate and weird delusions of respectability were holding policymakers back.

As Yglesias also notes, Europeans and Americans promptly forgot that advice when the 2008 financial crisis exploded budget deficits:

Suddenly, criticizing the Bank of Japan went out of style. America became Japan and simultaneously forgot what America used to think about Japan.

But perhaps the lesson that Yglesias is forgetting — and the lesson that the 2008 crisis taught Europeans and Americans — is that politics matters, and that politics can intrude on what might otherwise be a clear policy path, whether it’s ‘fiscal cliff’ negotiations in the United States or the ‘kick-the-can’ politics of eurozone bailouts.

Yglesias is also forgetting that Japan has politics, too. Continue reading Can Shinzō Abe boost Japan’s economy? →

Japan

Hashimoto’s once-rising Japan Restoration Party falling short as third force in Japanese politics

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ishiharahashimoto

Osaka mayor Tōru Hashimoto (橋下徹) is probably the most charismatic politician that Japan has seen since Junichiro Koizumi (小泉 純一郎), the wavy-haired reformist prime minister from 2001 to 2006. Japan

Shintaro Ishihara (石原慎太郎) has spent the past 13 years as governor of Tokyo and is one of Japan’s most outspokenly nationalist right-wing politicians.

So it was odd, to say the least, to see Hashimoto (pictured above, right) and Ishihara (pictured above, left) merge their two new parties, with Ishihara folding his more stridently right-wing Sunrise Party (太陽の党, Taiyō no Tō) into the Osaka-based, free-market liberal Japan Restoration Party (日本維新の会, Nippon Ishin no Kai).  Ishihara became the new leader of the merged Japan Restoration Party, with Hashimoto taking on the deputy leadership.

But given the now-schizophrenic nature of the party’s platform, it seems as if the party — once expected to become a major third party force in elections for Japan’s lower house of the Diet, the House of Representatives — may have turned out to be less than the sum of its parts.

After the Japanese turned out the long-ruling (since 1955!) Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō) and are now disillusioned with the opposition Democratic Party of Japan (DPJ, or 民主党, Minshutō), it seemed as if there were an opening for a new politician to ride the same wave to power that the DPJ rode in 2009 — especially for a young politician with Koizumi-level charisma.

But the party seems to be falling short — whereas, even in November, the party was polling in the mid-teens (ahead or even with the DPJ, and the LDP polling between 20% and 25%), it’s now fallen well below 10%, to just 4% in some polls.  Notably, most Japanese polls include a wide undecided vote (around 40% to 50%), so it’s important to take those trends with an even bigger grain of salt than we would take polls in the United States.

What that means is instead of fashioning a new opposition, Japan will instead opt for a doubling down on LDP policies under Shinzō Abe (安倍 晋三), who served as prime minister from 2006 to 2007.

If the Japan Restoration Party comes up short on Sunday, it could well frustrate Hashimoto’s career before it has even had a chance to peak.  Continue reading Hashimoto’s once-rising Japan Restoration Party falling short as third force in Japanese politics →

Japan

Power, destruction, and Hello Kitty: Article 9, the Self-Defense Force and Japan’s election campaign

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Among the more famous — and unique — provisions of the world’s constitutional jurisprudence is the Japanese constitution’s pacifist Article 9, which prohibits any act of war by the state.

The English translation of the article reads as follows:

Aspiring sincerely to an international peace based on justice and order, the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes.  In order to accomplish the aim of the preceding paragraph, land, sea, and air forces, as well as other war potential, will never be maintained. The right of belligerency of the state will not be recognized.**

Traditionally, Article 9 has limited Japan’s military capability since World War II to a merely defensive capacity, with the country largely dependent on the United States for its external security.

But with tensions already high and rising with the People’s Republic of China over three of the tiny Senkaku Islands (Diaoyu in Chinese) since the Japanese government formally purchased the islands in September, and with the relatively more militant Shinzō Abe (安倍 晋三), leader of the Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō), increasingly set to win Japan’s snap elections on December 16 for the lower house of Japan’s parliament, the Diet, Article 9 may be set for reinterpretation.

Abe comes naturally to his more hawkish views on Japan and its military power.  As prime minister from 2006 to 2007, he tried to push a stronger interpretation of Article 9 and pursued a more aggressive foreign policy.  Moreover, as prime minister and most recently after winning the leadership of the LDP, he visited the Yasukuni Shrine in Tokyo, which honors Japan’s war dead, including several war criminals, a move that has consistently provoked China and South Korea. Abe’s grandfather Nobusuke Kishi (岸 信介) served as Japan’s prime minister from 1957 to 1960 and counts among his major accomplishments the signing of the mutual cooperation and security treaty between Japan and the United States.

Although Japan’s election campaign has also featured nuclear energy policy, the current government’s recent increase in the country’s consumption tax and economic policy for pulling Japan out of more than two decades of economic slump, the Senkaku showdown with China has highlighted Abe’s stance to revise the government’s interpretation of Article 9, at a minimum, to allow for collective self-defense.  Such a relatively more aggressive interpretation would allow Japan to join allies, such as the United States, in military actions throughout the world or possibly even join collective security alliances such as the North Atlantic Treaty Organization (Japan is already a major ‘non-NATO ally’).  Although all of Japan’s postwar administrations have interpreted Article 9 to prohibit such a wide interpretation, Abe and his LDP allies would prefer the capability to deploy Japanese forces alongside, for example, U.S. forces in Afghanistan.

In a sense, it’s ridiculous to say that Japan doesn’t have a military.  Its Self-Defense Force was created as an arm of the Japanese defense department in 1954, and it’s consistently grown ever since.  Although it’s technically not an army, Japan’s active forces (around 250,000) are a bit larger than either of Germany’s or the United Kingdom’s active forces.  True, under Japan’s complicated national defense policy, the Self-Defense Force is limited to exclusively defense-oriented policy, and Japan has refrained from developing nuclear weapons and traditionally worked in random to develop security arrangements with the United States.

But Japan itself has been stretching its interpretation of Article 9 for years — from 2004 to 2006, notably, Japan sent forces to Iraq to assist the United States in its occupation of Iraq, and in the past decade, Japan has become increasingly at ease with sending Self-Defense Force troops abroad to assist in humanitarian and peacekeeping arrangements, typically under the aegis of the United Nations.

The LDP’s return to government — it essentially controlled Japan from 1955 to 2009 — could not only result in a more aggressive interpretation of Article 9 to allow collective self-defense, but the re-christening of the Self-Defense Force as the more militaristic National Defense Force, and a full-fledged revision of Article 9 to allow Japan to have a full military like any other country, especially as the memory of Japan’s imperial army during World War II fades from memory and Japan feels increasingly vulnerable from a strengthening Chinese presence in East Asia. Continue reading Power, destruction, and Hello Kitty: Article 9, the Self-Defense Force and Japan’s election campaign →

Italy

Monti resigns as prime minister in light of Berlusconi’s political return

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It’s been an incredibly fast-moving weekend for Italian politics — shortly after Silvio Berlusconi announced he would return to the leadership of his floundering Popolo della Libertà (PdL, People of Freedom) on Saturday, prime minister Mario Monti announced that he would resign as prime minister upon the completion of Italy’s 2013 budget, meaning that the next Italian election could come sooner than April 2013 as previously planned.

Monti’s resignation is not the incredible bombshell that it seems — it will still take some time to pass the 2013 budget, and the coalition that supports Monti, comprised of the PdL and the center-left Partito Democratico (PD, Democratic Party), seem likely to provide support for that budget.  Earlier today, after the Italian stock market dropped and Italian bond yields crept upwards to around 4.8%, Monti reassured global markets and Italians alike that he would continue to govern through the next election.  Monti was appointed prime minister in November 2011 after Berlusconi’s government found itself in the throes of a crisis of confidence over Italian fiscal policy with bond yields of over 7%, not to mention the corruption and sex scandal that had enveloped Berlusconi in his final years in office.

Monti has spent much of 2012 passing budget cuts, tax increases and market reforms through Italy’s parliament — Monti remains well-respected in Italy, although his austerity measures in particular have become increasingly unpopular.  As such, the upcoming Italian election was always going to determine the outcome of Monti’s reforms, and it will fall to the next government to consolidate and continue Monti’s reforms.  Indeed, Italy had already started turning toward election season, and although Monti is not running in his own right, he has indicated he could return to lead a second Monti government in the event, not unlikely, of a hung Italian parliament.

The PD, together with a handful of smaller leftist allies, selected just eight days ago the broad center-left’s candidate for prime minister, the PD’s current leader, Pier Luigi Bersani, in a race that saw much of Italy cheering on the youthful, energetic mayor of Florence, Matteo Renzi.  Although Bersani has emphasized the importance of stimulating economic growth and creating more jobs, he’s largely indicated he would continue Monti’s broad path of fiscal readjustment.

Earlier in November, a handful of business leaders formed a new coalition, Verso la Terza Repubblica (VTR, Toward the Third Republic), a centrist group that will run in the 2013 election for the express purpose of returning Monti to government.  Its leaders include Ferrari CEO, former Fiat CEO and former president of Confindustria (Italy’s employer’s federation), Luca Cordero di Montezemolo.  A handful of smaller parties are also contesting the election in their own right, ranging from autonomist parties in Italy’s north and Italy’s south, the remnants of Italy’s old Christian Democrats, and parties ranging from fervently communist to nearly neofascist.

So, at most, Monti’s imminent resignation will accelerate the Italian election to February.

In one sense, that’s good news for Berlusconi’s opponents — the less time that Berlusconi has, with his ample amount of money and media power, to attack Monti’s reforms and his leftist opponents, the less likely it is that Berlusconi can turn around polls that show the PdL in third place, behind the PD and behind blogger Beppe Grillo’s anti-austerity Movimento 5 Stelle (M5S, the Five Star Movement).

On the other hand, the PdL was set to contest regional elections on February 10 and 11 in Lombardia (in northern Italy and home to Italy’s financial and fashion capital, Milan) and in Lazio (in central Italy and the region surrounding Italy’s capital, Rome), and losses in those elections could have been even more embarrassing in advance of a later spring vote.  In Lombardia, Roberto Formigoni, who has served as regional president since 1995, announced the dissolution of the regional legislature after one of his PdL allies was arrested on the charge that he bought votes from the southern organized crime organization ‘Ndrangheta in the 2010 regional elections.  In Lazio, the PdL’s Renata Polverini resigned as regional president after just three years in office after being implicated in a public expenses scandal.

Italy

Five reasons Berlusconi returned to run in the upcoming Italian election

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After leading a symbolic ‘walk-out’ among his center-right Popolo della Libertà (PdL, People of Freedom) from the Italian senate on Thursday in opposition to the austerity measures and other reforms of caretaker prime minister Mario Monti, Il Cavaliere himself, Silvio Berlusconi (pictured above), today announced that he will lead the PdL as its candidate for prime minister in the upcoming Italian general election against a broad center-left alliance anchored by the Partito Democratico (PD, Democratic Party).

So much for a ‘third republic’ in Italian politics — with the selection of the Italian left’s old-guard’s candidate, Pier Luigi Bersani, in the center-left’s broad primary earlier this month against Florence mayor Matteo Renzi (the latter remains Italy’s most popular politician), Italy remains, for now, stuck in the same-old politics as before.

Indeed, a Berlusconi-Bersani face-off would not have raised eyebrows a decade ago.

This time around, though, Berlusconi will face none of the political luck or goodwill that’s marked most of his career — he left office in November 2011 with Italian 10-year bond rates at an unsustainable 7% amid a growing financial crisis that threatened not only Italy, but the entire eurozone.  In addition, Berlusconi has little to show for his stint in office in the way of policy accomplishments, was convicted (subject to appeal) for tax evasion earlier this autumn, and he’s been shamed by accusations of sex with underage women at the now-famous and much derided ‘bunga bunga’ parties and using his influence for the benefit of at least one of those women, a Moroccan immigrant.

So his return to office in many ways would be met with not just disdain, but outright hostility, from outside investors and much of the European political establishment, including the leaders of the European Union, French president François Hollande and German chancellor Angela Merkel.

Berlusconi’s return has been met with chilly responses across the Italian political spectrum.  Monti, who is not contesting the election but has indicated he would be available to lead a second government in the event of a hung parliament, cautioned against populism and warned that Italy must avoid returning to a position whereby Italy’s finances threatened trigger the eurozone’s wider implosion.  Beppe Grillo, a blogger and social critic, as well as the leader of the populist and anti-austerity Movimento 5 Stelle (M5S, the Five Star Movement), savaged what he called Berlusconi’s ‘exhumation.’

Berlusconi’s one-time ally, Gianfranco Fini, who served as deputy prime minister, foreign minister and a former president of Italy’s lower house, the Chamber of Deputies (Camera die Deputati), and who is running under the newly-formed Futuro e Libertà per l’Italia (FLI, Future and Freedom), also sounded alarm, noting that the PdL decision exposes Italy to additional risks.

Given the long odds — the PdL stands far behind the center-left coalition in every poll conducted for next year’s election (and sometimes behind the Five Star Movement, too) — why would the 76-year-old Berlusconi make a bid for a fourth term as Italy’s prime minister?

Here are five reasons why he could be making the race.

Continue reading Five reasons Berlusconi returned to run in the upcoming Italian election →

Italy

Bersani routs Renzi in ‘centrosinistra’ primary to lead Italian left next spring

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Florence’s brash, young mayor Matteo Renzi and his campaign to lead the Italian left threatened to remake Italian politics at a time of upheaval and uncertainty greater than at any point in the past two decades.

But the rank-and-file of the Italian left chose the more familiar path on Sunday, elevating instead the familiar, older and more staid, even boring, president of Italy’s largest center-left party, the Partito Democratico (PD, Democratic Party), Pier Luigi Bersani (pictured above, enjoying a post-election beer).

The 61-year-old Bersani easily defeated the 37-year-old Renzi with around 61.1% of the vote (with just 38.8% for Renzi) — a victory so complete for Bersani that Renzi was winning only in Tuscany, the central Italian region that’s home to Florence, and even there, only with about 55% of the vote.

For many reasons, I argued last week that Bersani’s victory was very likely: his control of the PD party machinery, Italian cultural values that respect longevity (i.e. can you think of anyone in the past 50 years that could be described as ‘Italy’s JFK’?), close ties to Italy’s largest union, the Confederazione Generale Italiana del Lavoro (CGIL, General Confederation of Labour) and support from the candidate who placed third in the first round of the primary election, Nichi Vendola.  Vendola is the openly-gay, two-term regional president of Puglia, a more leftist candidate who is the leader and founder of the Sinistra Ecologia Libertà (SEL, Left Ecology Freedom), which will join with a handful of other small leftist parties in supporting Bersani as a candidate for prime minister in Italy’s general election, scheduled to be held on or before April 2013.  Vendola memorably said, on the same day as his endorsement, that Bersani’s words were ‘profumare di sinistra‘ — perfumed with leftism.

Current technocratic prime minister Mario Monti is not running in the upcoming election.  Monti has shepherded labor reforms, budget cuts and tax increases through the Italian parliament since the PD joined with the main center-right party, the center-right Popolo della Libertà (PdL, People of Freedom) in November 2011 to appoint Monti in the midst of a public finance crisis that resulted in Berlusconi’s resignation.

So what happens next?

Continue reading Bersani routs Renzi in ‘centrosinistra’ primary to lead Italian left next spring →

Italy

Bersani leads as Italian ‘centrosinistra’ primary heads to Sunday runoff

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After last weekend’s first round of the primaries to choose the Italian center-left (‘centrosinistra‘) candidate for prime minister in advance of expected national elections in April, the current leader of Italy’s largest center-left party, the Partito Democratico (PD, Democratic Party), Pier Luigi Bersani looks like a favorite — even if just slightly — to win the runoff this Sunday.

Bersani (pictured above) won 44.9% of last weekend’s primary vote of around 3 million Italian voters, while the youthful mayor of Florence, Matteo Renzi, placed a close second with 35.5%.  The two faced off in a television debate earlier Wednesday, although the two candidate disagree more on tactics and broad themes than individual policies.

The regional president of Puglia — Italy’s southeastern corner — Nichy Vendola, who is openly gay and the most leftist of the three candidates, as well as the founder and leader of the more radical Sinistra Ecologia Libertà (SEL, Left Ecology Freedom), placed third with 15.6% — the SEL and a handful of other small parties have agreed to unite behind the winner of the centrosinistra primary as the prime ministerial candidate of the broad Italian left.

So with the centrosinistra primary set to end with the December 2 runoff between Bersani and Renzi, it appears that Bersani will win, despite the momentum behind Renzi’s candidacy and his promise to bring a new generation of leadership to Italy.  Vendola, earlier today, endorsed Bersani after indicating earlier that Bersani’s words were more ‘profumare di sinistra‘ — perfumed with leftism — than Renzi’s.

The battle between Renzi and Bersani is less ideological than generational — at 61, Bersani personifies the boring and staid leadership of the past 20 years of the Italian left.  At age 37, however, Renzi is something quite new in Italian politics.  His campaign’s theme is essentially that Italy is in need of a new generation of leadership — namely, Renzi’s, on the basis that a Renzi premiership would open a new and more productive era in Italian governance.  He’s not only called for an end to the era of former prime minister Silvio Berlusconi, but for a clean sweep of the Italian left as well.  Renzi’s even picked a fight with Sergio Marchionne, the CEO of Italian carmaker Fiat.

Both Renzi and Bersani have pledged to continue the era of budget discipline enacted by Italy’s current ‘technocratic’ prime minister Mario Monti, who took office in December 2011.

Monti has consistently refused to run for prime minister in his own right in the upcoming elections.  Monti, however, has indicated that he would be available to serve as technocratic prime minister again in the event of a hung parliament, and business leaders overwhelmingly favor a second Monti government to see through the budget cuts, labor reforms and tax increases that have brought Italy back from the brink of financial crisis.

Both candidates, too, have pledged to pursue more growth-oriented policies, even though it remains unclear exactly what either candidate could actually accomplish in an era of austerity throughout much of Europe.

That doesn’t mean there aren’t ideological differences between the two.

Bersani, with greater ties to Italy’s largest union, the Confederazione Generale Italiana del Lavoro (CGIL, General Confederation of Labour), comes from a stronger social democratic tradition than Renzi, who has styled himself as a modernizer not unlike former UK prime minister Tony Blair.  Bersani, the son of a mechanic, served as regional president of the leftist region of Emilia-Romagna in central Italy in the 1990s and as minister of economic development under former prime minister Romano Prodi from 2006 to 2008, where he tried to liberalize the Italian labor market.

Renzi, however, has refused to consider a potential governing coalition with the Unione di Centro (UdC, Union of the Centre), a small centrist group led by Pier Ferdinando Casini.  The UdC essentially represents the remnants of the long-dominant Italian Christian Democrats and, while Casini and the UdC would likely find overlapping interests on economic policy, the UdC, with its ties to the Vatican, remains socially conservative (e.g., it opposes same-sex marriage).  Bersani, although he is seen as slightly more leftist than Renzi, has nonetheless remained open to a coalition with Casini’s centrists.

Ultimately, it’s hard for me to believe that Renzi will actually win on December 2.  The ‘primary’ itself seems skewed in Bersani’s favor — he’s already the leader of the PD, has the support of much of the ‘old guard’ of the Italian left (such as former prime minister and foreign minister Massimo D’Alema), and accordingly, he has access to the left’s strongest party machinery, not to mention the benefit of his CGIL ties.  He now apparently has Vendola’s support from the SEL as well.

Furthermore, in a country that shows perhaps more respect for its elders than anywhere else in Europe, it seems unlikely that Italy will anoint as a potential prime minister someone so incredibly young.  The contest is especially meaningful because the PD looks set to win the upcoming elections (although the contest remains exceptionally fluid and unpredictable, even by the sometime operatic standards of Italian politics).

Continue reading Bersani leads as Italian ‘centrosinistra’ primary heads to Sunday runoff →

Japan

Japan heads to snap elections on December 16

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Sooner than expected, Japan is headed to the polls: prime minister Yoshihiko Noda (pictured above) announced today that he will dissolve Japan’s lower house of parliament, the Diet, on Friday, clearing the way for snap elections on December 16.

It seems very likely that the Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō), which controlled the Diet from 1955 to 2009, will return to power, and former Japanese prime minister Shinzō Abe (安倍 晋三), who served exactly one year as prime minister from 2006 to 2007, seems likely to return for a rare second stint leading Japan’s government following his selection as the LDP’s leader in late September.

Noda said the dissolution will be contingent on the LDP’s support for a package of measures to issue deficit-covering bonds this week, but the LDP seemed likely to support that package in any event.

The election will affect at least a half-dozen key policy issues, including relations with China, Japan’s pacifist constitution, a controversial sales tax increase set to go into effect in 2014, the Trans-Pacific Partnership agreement with other Asian countries and the United States, the future role of nuclear energy and fiscal policy in a country that’s seen low GDP growth since the 1980s.

Noda’s announcement was so striking because he needed to call an election only before August 2013, but currently, a record-high 64% of Japanese voters disapprove of his government, with just 18% approving.

Since the Democratic Party of Japan (DPJ, or 民主党, Minshutō) took control of Japan’s parliament after the 2009 elections, things haven’t gone so well for them — the party has gone through three different prime ministers in three years. Continue reading Japan heads to snap elections on December 16 →