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ECB’s Draghi on raising inflation in Europe: ‘We will do exactly that.’

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Italy’s Mario Draghi, the president of the European Central Bank, joined Stanley Fischer, the vice chair of the Federal Reserve, in an hour-long program at the Brookings Institution earlier today.European_Union

Draghi addressed at length both the ECB’s steps to confront deflation and the need for EU countries to enact bolder economic reforms in his remarks and in his discussion with Fischer, the former president of Israel’s central bank and a former professor at the University of Chicago who once taught Draghi.

Deflation as Europe’s chief economic threat

DSC00853Draghi stressed that he understands the biggest risk to European Union’s economic recovery is deflation. He noted that the ECB is transitioning from a more passive approach to a much more active ‘QE-style’ approach to the bank’s balance sheet — in part by moving last month to purchase private-sector bonds and asset-backed securities. Even if Draghi’s efforts still fall short of the kind of quantitative easing (e.g., outright asset purchases) that the Federal Reserve introduced to US monetary policy five years ago, Draghi committed himself to lifting the eurozone’s inflation from ‘its excessively low level’:

We will do exactly that.

It’s not exactly ‘whatever it takes,’ but it’s a sign that Draghi realizes the dangers that deflation presents, with the eurozone inflation rate falling to just 0.3%, the lowest level since the height of the eurozone’s existential sovereign debt crisis:

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Draghi has been one of the leading voices for a more active ECB approach to boosting inflation to 2% within the next two years, though Germany’s powerful central bank, the Bundesbank, and its president Jens Weidmann (also a member of the ECB’s 24-person governing council), remains skeptical of full-throated quantitative easing.  Continue reading ECB’s Draghi on raising inflation in Europe: ‘We will do exactly that.’ →

European Union, Italy, Poland

Tusk, Mogherini appointed to top European offices. What next?

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The European Council appointed Polish prime minister Donald Tusk as Council president and nominated Italian foreign minister Federica Mogherini as its new high representative for foreign affairs and security policy.Italy Flag IconEuropean_UnionPoland_Flag_Icon

The appointments of both Mogherini and Tusk were widely expected in the days and hours leading up to today’s EU summit.

Tusk (pictured above, left, with his predecessor, Herman Van Rompuy), age 57, was first elected prime minister in 2007 and reelected in 2011 as the leader of the center-right Platforma Obywatelska (PO, Civic Platform), each time defeating the more conservative, nationalist Prawo i Sprawiedliwość (PiS, Law and Justice). Essentially a moderate liberal and European federalist, Tusk has governed Poland for seven of the 10 years during which it’s been a member of the European Union. His elevation to the Council presidency marks the first time that a central or eastern European has held a top EU office, and it reflects Poland’s growing clout as one of the engines of the European Union.

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Mogherini (pictured above, right, with her predecessor, Baroness Catherine Ashton), age 41, only recently became Italy’s foreign minister in February, when prime minister Matteo Renzi maneuvered his way into the premiership. Though some Baltic and eastern European leaders doubted her level of experience and questioned whether she might be too sympathetic to Russia, she’s received strong marks in her six months as Italy’s foreign minister, marking her as a rising star in the new generation of leaders in Renzi’s center-left Partito Democratico (PD, Democratic Party).

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RELATED: Who is Federica Mogherini?

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Together with Jean-Claude Juncker, the former Luxembourg prime minister, who was nominated by the Council in June as the president of the European Commission, the EU’s chief executive and regulatory body, Tusk and Mogherini will be responsible for setting EU policy through 2019.

The Council presidency was created by the Treaty of Lisbon, which came into effect only in 2009. Before Lisbon, the Council president was simply the leader of the country that held the six-month rotating Council presidency. Van Rompuy, a former Belgian prime minister, served as the inaugural Council president. Upon the Council’s decision today, Tusk will begin his first term of 2.5 years in December, with the option for reappointment to a second term of 2.5 years.

The high representative role existed prior to the Lisbon Treaty, but it was greatly expanded when Ashton, a former Labour member of the House of Lords, was appointed to the role in 2009. Technically, Mogherini will serve as Italy’s representative on the European Commission and, accordingly, her term will run for five years and is  subject to the approval of the European parliament. 

Given their different backgrounds, Tusk and Mogherini were viewed as a complementary team. Eastern and central Europeans are delighted to see Tusk, a relatively hawkish voice on Russia, elevated to the Council presidency. Meanwhile, Mogherini brings gender diversity to the Commission, and she will join Martin Schulz, a German social democrat, as the chief voice of the center-left at the top of the EU policymaking apparatus.

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RELATED: Forecasting the EU power summit, part 1
Europe’s next high representative

RELATED: Forecasting the EU power summit, part 2
Europe’s next council president

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But what does it mean for the next five years of European policy? Continue reading Tusk, Mogherini appointed to top European offices. What next? →

European Union

Forecasting the EU power summit, part 1: Europe’s next high representative

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Mogherini

With the European parliamentary elections finished on May 25, and the emergence of former Luxembourg prime minister Jean-Claude Juncker as the president of the European Council nearly a month later, the next two pieces of EU governance will be determined at a summit of all 28 leaders of the European Union on Saturday.European_Union

The EU leaders, who together comprise the membership of the European Council, will meet at a summit on August 30 that is expected to determine outgoing Council president Herman van Rompuy’s successor, an office created under the Treaty of Lisbon that went into effect in 2009. 

They are also expected to appoint a candidate to succeed Catherine Ashton as high representative for foreign affairs and security policy, as well as informally consider which European Commission will hold which portfolios, though those decisions are unlikely to be announced until later in the autumn. 

It’s easiest to think about the two offices sequentially — first high representative, then Council president. That’s because there are just two major candidates viewed as credible possibilities for the EU foreign policy role — Italian foreign minister Federica Mogherini and Polish foreign minister Radek Sikorski — with a third, dark-horse candidate in Kristalina Georgieva, an economist and Bulgaria’s current commissioner, responsible for humanitarian aid and international cooperation.

The choices for the European Council presidency will  follow from the choice of high representative, and from the decision to name Juncker, a center-right federalist from Western Europe, as Commission president. (More on the Council presidency will follow in part 2).

From the available public reports, Mogherini (pictured above) appears to be the slight favorite for the role. Continue reading Forecasting the EU power summit, part 1: Europe’s next high representative →

Italy

Despite Senate vote, Renzi’s reform push stalling in Italy

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If Rome wasn’t built in a day, it’s certainly proving that it won’t be reformed in a day, either. Italy Flag Icon

Nearing a half-year in office, the most ‘impressive’ accomplishment of Italy’s new prime minister Matteo Renzi is engineering the relatively anti-democratic putsch of his own party’s prime minister, Enrico Letta in February.

Renzi, the 39-year-old former mayor of Florence, gave Letta just 10 months to enact urgent reforms before he executed his takeover of the Italian government. Six months into his own premiership, Renzi has greater support than Letta ever had to shake up Italy’s ossified government. But Renzi nonetheless has surprisingly little to show for half a year in office, even as the country slipped this summer into, incredibly, a triple-dip recession. 

When he ushered himself into power, Renzi came to the office with a wish list of reforms, all of which he promised would be delivered before the summer: a new election law, labor market reforms, tax reform and changes to Italy’s sclerotic public administration. 

Renzi isn’t much closer to achieving any of those today than he was in the spring. He’s lucky to have won a key vote last week in the upper house of the Italian parliament, the Senato (Senate), to reduce that chamber’s powers, making it essentially an advisory body, giving Italy a unicameral parliamentary system in all but name. Renzi must still win a vote in the lower house, the Camera dei Deputati (Chamber of Deputies), where Renzi’s Partido Democratico (PD, Democratic Party) controls an absolute majority, as well as another final vote in the Senate before the reforms are put before voters in a referendum next year. Continue reading Despite Senate vote, Renzi’s reform push stalling in Italy →

Italy

As Italy assumes EU rotating presidency, Mogherini shines

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I spoke to the London bureau of Voice of Russia earlier today to share some thoughts about Federica Mogherini (pictured above with Russian president Vladimir Putin), Italy’s still-new foreign minister, and her role in shaping EU foreign policy:Italy Flag Icon

He says that her appointment did surprise some because of her youth and the fact that she has no real top-level ministerial experience. However, “Within Prime Minister Matteo Renzi’s Democratic Party, she’s established quite a reputation as a rising star, particularly with regard to foreign policy. Beyond Renzi’s efforts of shaking up Italian policy paralysis, it was making quite a statement to appoint a 41-year-old woman as the new foreign minister”…

I argued that Mogherini and Renzi, who has now eclipsed French president François Hollande as the leading figure of the European left, are aiming for a more assertive Italian foreign policy voice. Mogherini has held forth on African migration to the European Union, Iran’s nuclear program, and the ongoing troubles in the Middle East, problems that have a significant diplomatic role for Russia as well as Europe and the United States.

I noted that though Mogherini, who is in Ukraine and Russia this week for talks with officials, is slightly more hawkish with respect to EU sanctions against Russia than perhaps former prime minister Silvio Berlusconi or former German chancellor Gerhard Schröder, her top priority is maintaining a united EU foreign policy, especially nine days into Italy’s assumption of the EU six-month rotating presidency.

Italy has grown closer to Russia over the past two decades, and Putin and Berlusconi enjoyed a strong personal relationship that bolstered ties between the two countries. In many ways, that makes Mogherini, like German foreign minister Frank-Walter Steinmeier, is a great EU conduit to Russia:

“I think it’s better to say that she’s likely to take a unified line, depending on where other leaders in the EU stand. In many ways, I think Mogherini is a great conduit to help smooth EU talks with [Russian Foreign Minister] Lavrov and other Russian officials.”

Though Mogherini could be mentioned as a candidate to succeed Catherine Ashton as the EU high representative later this year, I noted that Mogherini’s performance, strong as it may be, will be one factor in a set of discussions among the 28 EU member-state leaders that will also consider which states get which portfolios within the European Commission and that will consider the new president of the European Council. But with one of the frontrunners, Poland’s hawkish foreign minister Radek Sikorski, in some trouble for impolitic comments about his country’s bilateral relationship with the United States, Mogherini could emerge as a more conciliatory and diplomatic choice.

Photo credit to RIA Novosti.

European Union

European Council proposes Juncker as Commission president

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Bowing to pressure from European parliamentary leaders, the European Council has proposed as its candidate for the presidency of the European Commission Jean-Claude Juncker, the former prime minister of Luxembourg and former head of the Eurogroup, the informal gathering of the eurozone finance ministers. European_Union

That makes it virtually certain that the European Parliament will elect Juncker (pictured above) as the next Commission president, likely with the full support of the two major pan-European parties in the Parliament, Juncker’s own center-right European People’s Party (EPP) and the center-left, social democratic Party of European Socialists (PES). It also likely means that the PES candidate for the Commission  presidency, Martin Schulz, will become the Commission vice president. 

It’s obviously a defeat for British prime minister David Cameron who, just last week, was still holding out hope that he could pull together a blocking minority to keep Juncker from receiving the Council’s endorsement. But by the time the Council gathered to vote, only Hungarian prime minister Viktor Orbán joined Cameron in opposing Juncker. Not only did Cameron fail to win over allies, he failed to keep both Dutch prime minister Mark Rutte and Swedish prime minister Frederik Reinfeldt, neither of whom are enthusiastic about the prospects of a Juncker candidacy.

Contacted by a reporter for the Moscow-based RIA Novosti earlier today, I had a chance to put together some quick thoughts on what the Juncker decision means. Here are my real-time responses, which will double as my real-time analysis on where things go from here.  

On how the choice reflects the European parliamentary elections on May 25:

The choice reflects the fact that Juncker was the candidate of the European People’s Party, the pan-European group of center-right, Christian democratic parties, and the EPP won the greatest number of seats in the European parliamentary elections on May 25. The EPP nominated Juncker as its candidate for the European Commission presidency prior to the May 25 parliamentary elections, just as several other European parliamentary parties nominated their own candidates. The candidates — the German term ‘Spitzenkandidaten‘ developed widespread use across Europe — campaigned throughout the spring, and they participated in a set of debates on the EU’s future.

Under the Lisbon treaty, the European Council is supposed to ‘propose’ a candidate for Commission president, which will be ‘elected’ by the European Parliament, with the Council ‘taking into account’ the results of the parliamentary election. No one knows exactly what that means, but Juncker and the other parliamentary leaders believe firmly that the Council must propose Juncker as its candidate. In so doing today, the Council has set an important precedent for future parliamentary elections, though national leaders will be loathe to admit it.

Proponents of the Spitzenkandidaten system argue that Juncker represents the will of the European electorate, because he’s the candidate of the party that won the most votes, but it’s not so simple as that. There’s no real indication that the majority of European voters were voting on the basis of this or that Commission presidential candidate. Voter turnout has dropped significantly since the first European elections in 1979, and voters often cast their ballots on the basis of national governments or other factors. To the extent there was a unifying theme to the elections, it was the rise of euroscepticism on both the far right and the far left, with the victories of groups like the United Kingdom Independence Party, France’s Front national (National Front) and Denmark’s Dansk Folkeparti (People’s Party). Whatever ‘mandate’ you take away from the European elections, it’s hard to argue there’s a groundswell of genuine democratic support for Juncker. It was only last October that Juncker’s own center-right Christian Social People’s Party suffered so many losses in Luxembourg’s national elections that he was forced out as prime minister after 18 years.

Continue reading European Council proposes Juncker as Commission president →

European Union

It won’t necessarily take much to block Juncker in Council vote

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David Cameron and Angela Merkel

One fact that’s becoming increasingly clear in the current tussle over electing a new president of the European Commission is that the eventual candidate must win a qualified majority on the European Council, as well as an absolute majority in the European Parliament. European_Union

Though the rules for qualified majority voting on the Council are greatly simplified under the Treaty of Lisbon, it’s worth noting that those rules don’t take effect until November 2014.

That means that the old rules, under the Treaty of Nice, will be in effect during the current fight this summer over whether former Luxembourg prime minister Jean-Claude Juncker, the candidate of the European People’s Party (EPP), can become the next Commission president.

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RELATED: Here come the Spitzenkandidaten! But does anybody care?

RELATED: The mother-of-all-battles over
European integration has begun

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With the current president of the Council, Herman Van Rompuy, currently taking the lead on the process, the Council will submit a formal proposal for Commission president during its next official summit on June 26 and 27.

That explains why the focus of the fight over Juncker has moved from the Parliament to a fight between German chancellor Angela Merkel and British prime minister David Cameron (pictured above, last week, left, with Swedish prime minister Frederik Reinfeldt and Dutch prime minister Mark Rutte).

Under the Lisbon rules, qualified majority voting means that a proposal under consideration by the Council must meet three requirements:

  • a majority of countries within the European Union (15 out of 28 countries);
  • a supermajority (74%) of countries according to a formula of voting weights; and
  • a supermajority of countries representing  at least 62% of the EU-wide population.

The trickiest hurdle is meeting the 74% hurdle. The system assigns weights, roughly corresponding to population, to each country, with a maximum of 29 for each of Germany, France, the United Kingdom and Italy, and a minimum of three for the smallest member, Malta. With a total of 352 weighted votes after Croatia’s July 2013 EU accession, that means Juncker must win at least 260 weighted votes. Conversely, it means that a minority consisting of 93 weighted votes can block Juncker.

Cameron is committed to opposing Juncker.

Hungarian prime minister Viktor Orbán, who belongs to the EPP, has also opposed Juncker in retribution for Luxembourg’s outspoken role on the Commission in the past five years attacking Orbán’s questionable respect for democratic norms and press freedom in Hungary.

Reinfeldt, the Swedish prime minister, has also voiced doubts about Juncker’s candidacy, even though he also belongs to the EPP. If Juncker fails to pass muster in the Council, Reinfeldt himself has been mentioned as a compromise candidate, given the likelihood that his center-right Moderata samlingspartiet (Moderate Party) is expected to lose national elections in September.

Rutte, the Dutch prime minister, has joined Reinfeldt in his hesitation over Juncker. Rutte, like Cameron and Reinfeldt, is generally a Merkel ally on European economic policy and the need for trimming national budgets, but he belongs to the Alliance of Liberals and Democrats in Europe (ALDE), the third-largest European parliamentary bloc.

If Sweden (10 weighted votes) and The Netherlands (13 votes) join Hungary (12 votes) and the United Kingdom (29 votes), Cameron will have 64 votes to block Juncker — and he’ll need just 29 more votes to do so.

Those votes could come from Italy, where prime minister Matteo Renzi has demanded a more flexible interpretation of EU budget rules and a greater emphasis on economic growth stimulation (instead of austerity) in exchange for backing Juncker. A deal seemed imminent earlier this week, though Renzi hasn’t yet declared either support or opposition for Juncker.

Right now, the momentum seems to be with Merkel and Juncker, and flowing away from Cameron. Either Rutte or Reinfeldt could back down from their criticisms. Furthermore, Renzi might be wary of alienating Merkel just four months into his premiership and days before Italy assumes the six-month rotating Council presidency. But Cameron, who has suggested Denmark’s social democratic prime minister Helle Thorning-Schmidt as an alternative Commission president, might yet persuade Renzi to join him for at least one shot at obtaining a more reformist Commission president than Juncker.

It’s worth noting that French president François Hollande, like Renzi, would like to see a greater emphasis on growth at the European level, and he hasn’t firmly indicated that he’ll support Juncker, either.

Continue reading It won’t necessarily take much to block Juncker in Council vote →

European Union, France, Germany, Italy, Spain, United Kingdom

A detailed look at the European parliamentary election results (part 1)

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We now have most of the results from across Europe in the 28-state elections to elect all 751 members of the European Parliament.European_Union

At the European level,  the center-right, Christian democratic European People’s Party (EPP) emerged with about 25 more seats than the center-left, social democratic Party of European Socialists (PES).

That immediately gives former the EPP’s candidate for the presidency of the European Commission, former Luxembourgish prime minister Jean-Claude Juncker, a boost in his efforts to actually become the Commission president. But it’s still far from automatic, despite Juncker’s aggressive posture at a press conference Sunday evening:

“I feel fully entitled to become the next president of the European Commission,” Juncker, a former Luxembourg prime minister, told supporters late yesterday in Brussels after the release of preliminary results. Premier for 18 years until he was voted out of office in December, Juncker also gained recognition in his dual role as head of the group of euro-area finance ministers during the debt crisis.

Juncker (pictured above) still must to convince the European Council to propose him as Commission president, and he’ll still need to win over enough right-wing or center-left allies to win a majority vote in the European Parliament.

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RELATED: Here come the Spitzenkandidaten! But does anybody care?

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That process, which could feature a major battle between the European Council and the European Parliament, will unfold in the days, weeks and possibly months ahead.

But what do the results mean across Europe in each country? Here’s a look at how the European elections are reverberating across the continent.  Continue reading A detailed look at the European parliamentary election results (part 1) →

Austria, Belgium, Czech Republic, Denmark, European Union, Finland, Flanders, France, Germany, Greece, Hungary, Ireland, Italy, The Netherlands, United Kingdom

A rogues’ gallery of the EU’s top 13 eurosceptic parties

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skepticismAs voters in 28 European countries prepare to head to the polls, beginning on May 22 and running through May 25, no one knows whether Europe’s center-left or center-right will win more seats, and no one knows who will ultimately become the next president of the European Commission.European_Union

But the one thing upon which almost everyone agrees is that Europe’s various eurosceptic parties are set for a huge victory — not enough seats to determine the outcomes of EU legislation and policymaker, perhaps, but enough to form a strong, if disunited, bloc of relatively anti-federalist voices. Voters, chiefly in the United Kingdom, France and Italy, are set to cast strong protest votes that could elect more than 100 eurosceptic MEPs.

In some countries, such as Spain, euroscepticism is still a limited force — the center-left opposition Partido Socialista Obrero Español (PSOE, Spanish Socialist Workers’ Party) is tied for the lead with the governing center-right Partido Popular (the PP, or the People’s Party) of prime minister Mariano Rajoy. But Spain is quickly becoming an outlier as eurosceptic parties are springing up in places where unionist sentiment once ran strong.

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RELATED: In Depth: European parliamentary elections
RELATED: The European parliamentary elections are really four contests

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Of course, not all eurosceptics are created equally. Some anti-Europe parties have been around for decades, while others weren’t even in existence at the time of the last elections in 2009. Some are virulently xenophobic, far-right or even neo-Nazi in their outlooks, while others are cognizably on the more mainstream conservative / leftist ideological spectrum. Some seek nothing short of their country’s withdrawal from the European Union altogether, while others seek greater controls on immigration. Some are even pro-Europe in the abstract, but oppose eurozone membership. That’s one of the reasons why eurosceptics have had so much trouble uniting across national lines — the mildest eurosceptic parties abhor the xenophobes, for example.

If everyone acknowledges that eurosceptic parties will do well when the votes are all counted on Sunday, no one knows whether that represents a peak of anti-Europe support, given the still tepid economy and high unemployment across the eurozone, or whether it’s part of a trend that will continue to grow in 2019 and 2024.

With 100 seats or so in the European Parliament, eurosceptics can’t cause very many problems. They can make noise, and they stage protests, but they won’t hold up the EU parliamentary agenda. With 200 or even 250 seats, though, they could cause real damage. There’s no rule that says that eurosceptics can’t one day win the largest block of EP seats, especially so long as most European voters ignore Europe-wide elections or treat them as an opportunity to protest unpopular national government.

For now, though, they’re all bound to cause plenty of trouble for their more mainstream rivals at the national level, and in at least five countries, they could wind up with the largest share of the vote. So it’s still worth paying attention to them.

Without further ado, here are the top 13 eurosceptic parties to keep an eye on as the results are announced on Sunday:

Continue reading A rogues’ gallery of the EU’s top 13 eurosceptic parties →

Italy

Who is Federica Mogherini?

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mogerhini

When Matteo Renzi, the 39-year-old former Florence mayor, pushed Enrico Letta out of power in February, I questioned the timing of his decision and noted that it was an arguably anti-democratic electoral coup against a prime minister of his own party that could easily backfire on Renzi.Italy Flag Icon

But among the most eyebrow-raising choices was Renzi’s decision not to reappoint the internationally acclaimed Emma Bonino as foreign minister, allegedly against the wishes of Italian president Giorgio Napolitano.

A longtime leader of the Radicali Italiani (Italian Radicals), a group of reform-minded, good-government economic and social liberals, Bonino had a long career in Italian and international politics as an inaugural (and subsequent) member of the European Parliament,  international trade minister under center-left prime minister Romano Prodi, and European commissioner for health and consumer protection in the late 1990s. A longtime  international activist for human rights, Bonino surfaced briefly as a potential Italian presidential contender in May 2013, though the electors  ultimately decided to reappoint Napolitano.

Instead, Renzi appointed Federica Mogherini, a previously little-known international affairs expert and legislator in Renzi’s Partido Democratico (PD, Democratic Party).

Of course, youth need not prevent an official from becoming foreign minister (it hasn’t stopped Austria’s 27-year old foreign minister Sebastian Kurz). Nonetheless, it was a risk to replace such a renowned official like Bonino with an untested foreign minister like Mogherini (pictured above). Even before Bonino, the foreign ministry is a role that’s been held by some of Italy’s most senior politicians — Gianfranco Fini and Franco Frattini on the right, and Massimo D’Alema and Lamberto Dini on the left.

Mogherini, in her first trip abroad, was received by US secretary of state John Kerry yesterday, and she appeared briefly at the Brookings Institution today to share thoughts about European relations with Russia, Ukraine, North Africa and the Middle East.

Mogherini is impressive, even to those of us who regret that Bonino’s time as foreign minister was truncated to just 10 months. At her discussion at Brookings, she was more forthright and authoritative than one might expect from such an untested foreign minister.   Continue reading Who is Federica Mogherini? →

France

Who is Manuel Valls? Meet France’s new prime minister

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valls

In choosing Manuel Valls, the popular interior minister, as France’s new prime minister, French president François Hollande is taking a risk that elevating the most popular minister in his government will attract support from among the wider French electorate without alienating the leftist core of the Parti socialiste (PS, Socialist Party).France Flag Icon

Pivoting off the poor Socialist showing in last weekend’s nationwide municipal elections, Hollande’s cabinet reshuffle is a sign that he understands he has largely lost the trust of the French electorate in less than two years. Other ministers, including finance minister Pierre Moscovici, could also lose their jobs in a reshuffle to be announced later this week.

Prime minister Jean-Marc Ayrault resigned today after just 22 months on the job. LIke Hollande, Ayrault has become increasingly unpopular as the government has pursued aggressive measures to stabilize France’s budget, including tax increases and adjustments and cuts to France’s pension system — all in the face of a sluggish economy, a 10.8% unemployment rate and a greater crisis in confidence over France’s role within the European Union and the world. 

In a short statement announcing Valls, Hollande pledged to continue pursing a payroll tax cut and additional pension and labor law reforms as part of a recent attempt to win support from the French business community, a series of reforms that Valls has enthusiastically promoted throughout his career. He also promised that Valls would lead a ‘combative government,’ which sounds like somewhat of an understatement in translation from a gouvernement de combat.

In light of Ayrault’s highly collaborative style, and Valls’s much more aggressive style, even the original French seems like an understatement.

But while the latest IFOP poll from mid-March gave Hollande a 23% approval rating (his highest, in fact, since last October) and Ayrault a 26% approval rating, Valls has an approval rating of 63%. That goes a long way in explaining why Hollande is replacing Ayrault with Valls today.

It’s not a choice without risks. Valls, a centrist with controversial views about the Roma and immigration, could divide the French left. If Hollande’s unpopularity continues, he could taint one of the few remaining popular figures within the Socialist Party. If Valls succeeds, he could supplant Hollande as the more attractive presidential candidate in 2017.

Continue reading Who is Manuel Valls? Meet France’s new prime minister →

Italy, Veneto

No, Venice isn’t about to break away from the rest of Italy

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Piazza San Marco

Though it was essentially nothing more than an online poll, the Venetian independence movement has now become an international headline, with first Italian media, then Russian media and now US publications asking whether Veneto will be the next region to succumb to separatist sentiment.Italy Flag Iconveneto

Although the online plebiscite is raising more publicity than its promoters could have possibly hoped, it’s still just an unofficial, Internet-based poll. So when you see headlines that scream that 89% of Venetians are voting for independence from mainland Italy, keep in mind that it’s more a stunt than an actual referendum.

Plebiscite 2013, a Venetist group, conducted the referendum between March 16 and 21, and it claims that 2.36 million Venetians voted in the online poll for full independence from Italy, fully 89.1% of the voters who participated. There are good reasons to doubt whether those numbers are accurate — Il Corriere del Veneto today reports that, following an analysis of the web traffic data, the real total is something more like 135,000, and among those voters, there are more votes from Chile than from Padua, one of the region’s largest cities. While you should take the Venetist movement increasingly seriously, the March online poll is not the most credible evidence. Continue reading No, Venice isn’t about to break away from the rest of Italy →

Italy

Did Renzi make a mistake in taking power too soon?

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renzi

I argue this morning in EurActiv that the mistakes of Italy’s new prime minister Matteo Renzi in the past two weeks alone mean that we should be very skeptical about the chances that he can unlock the puzzle of reforming Italy’s economy and regulatory structure — and especially on a timeline that expects to enact major reforms before voting for the European parliamentary elections:

But for a politician whose brand is based on breaking with Italy’s past, his rise to power represents a very familiar path.  The putsch to oust Letta, executed behind closed doors, is reminiscent of many government reboots of Italy’s past.  Renzi, moreover, hopes to hold power until 2018, giving him four years in office without seeking the mandate of a popular vote.  That’s more ‘politics as usual’ than rupture.  Over the weekend, a planned meeting between Renzi and Beppe Grillo, the leader of the protest Five-Star Movement devolved into a clownish shouting match.  Though the blame rests more with the mercurial Grillo than with Renzi, the Five-Star constituency includes the kind of voters that Renzi must win in order to truly transform Italy’s economy.

I also question whether Renzi’s choices for his new cabinet are entirely wise:

For someone who’s been plotting a move to Palazzo Chigi for two years, Renzi’s cabinet is far from inspiring.  In light of the male-dominated nature of Italian politics and business, it’s promising that Renzi’s 16-member cabinet contains an equal number of men and women.  While the idea was to select a cabinet of young, energetic ministers, the cabinet doesn’t have the feel of an all-star assembly.

Renzi’s finance and economy minister, Pier Carlo Padoan, since 2007 the deputy secretary general of the OECD, has a strong pedigree as an economist, advising Italy’s center-left governments in the late 1990s and early 2000s on the requisite reforms to bring Italy into shape to join the eurozone.  But he falls into the same line of technocratic experts as his immediate predecessors, Fabrizio Saccomanni, Vittorio Grilli and Monti.

Renzi ignominiously dumped Letta’s foreign minister Emma Bonino, a longtime champion of women’s rights abroad and good government at home for the 40-year-old Federica Mogherini, first elected to the Italian parliament in 2008 and who has never held a ministerial post.

Renzi ‘s cabinet also excludes Cécile Kyenge, Letta’s minister for integration.  Letta demonstrated significant courage in appointing Kyenge, Italy’s first black minister.  Though racist slurs against Kyenge often drew negative headlines, her appointment inaugurated an overdue conversation about racism in Italy, especially as it regards integration and immigration, Kyenge’s portfolio.  Dumping Kyenge hardly seems like bold leadership.

Though Angelino Alfano remains interior minister, Renzi stripped Alfano of his title as deputy prime minister, and he cut all but two other members of Alfano’s New Center-Right (NCD) from the cabinet.  Those decisions may haunt Renzi when things get tough in the Italian Senate, where the Democratic Party lacks a majority.

Italy

Renzi brings down Letta government, expected to become PM

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Just two months into his leadership of Italy’s main center-left party, the Partito Democratico (PD, Democratic Party), Florence mayor Matteo Renzi has found a way to balance his criticism of prime minister Enrico Letta’s government against the notion that he’s working against Letta, a former deputy leader of his own party.Italy Flag Icon

He’s decided that it will simply be easier to lead Italy’s government himself — and the past four saves have played out dramatically as Renzi engineered the collapse of Letta’s government.

Initially, Renzi’s gambit looks like it’s going to work.  The Democratic Party national leadership backed Renzi’s plan almost unanimously after a meeting earlier Thursday, where Renzi argued that the party must ‘uscire dalla palude‘ (‘get out of the swamp’) to effect change in Italy.

Letta will resign as prime minister tomorrow.

As a formal matter, Italian president Giorgio Napolitano will consult with the leaders of all of Italy’s political parties about forming a new government, but the outcome seems almost certain.  Renzi, at age 39, will become the youngest prime minister in Italian history, taking over essentially where Letta leaves off.

It’s an audacious and skilled move. It’s one part Giulio Andreotti (note Renzi’s mastery of internal PD politics).  It’s one part Silvio Berlusconi (note Renzi’s mastery of the kind of political theater it takes to wage a successful campaign against your own party’s government).  It’s also one part Michael Corelone — Renzi showed this week he has the ruthlessness to pull the trigger when it counts.  (Can you imagine what British policy might look like today if former foreign minister David Miliband had the same instincts five years ago?)

Renzi expects to form a government that includes the Democratic Party, the centrist Scelta Civica (SC, Civic Choice), a group of reform-minded moderates that supported former prime minister Mario Monti, and the Nuovo Centrodestra (NCD, the ‘New Center-Right’), a breakaway faction from former prime minister Silvio Berlusconi’s rechristened Forza Italia.  That’s the same coalition that Letta led, with the same strengths and shortcomings.

Renzi says he’ll seek a government through the end of the current parliamentary term, which ends in 2018.   Continue reading Renzi brings down Letta government, expected to become PM →

Italy

Renzi, Berlusconi team up for electoral law pact

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Italian politics just got a lot more complicated.Italy Flag Icon

Over the weekend, former prime minister Silvio Berlusconi, the leader of Italy’s largest center-right party, Forza Italia, and Matteo Renzi, the leader of Italy’s largest center-left party, the Partito Democratico (PD, Democratic Party), joined forces (pictured above) to introduce the blueprint for a new electoral law.

Notably, the deal didn’t include input from prime minister Enrico Letta, a moderate who leads a fragile ‘grand coalition’ government that includes not just his own Democratic Party, but centrists close to former technocratic prime minister Mario Monti and one of Italy’s two main center-right blocs, the Nuovo Centrodestra (NCD, the ‘New Center-Right’), led by deputy prime minister and interior minister Angelino Alfano.  The Alfano bloc split two months ago from Berlusconi’s newly rechristened Forza Italia, which pulled its support from the Letta government at the same time.

The deal is a political masterstroke by Renzi because it makes him appear to have stolen the initiative from Italy’s prime minister.  Letta formed a government in May 2013 with the two priority goals of passing a new election law and deeper economic reforms.  Despite a ruling in December 2013 that Italy’s current elections law is unconstitutional, Letta’s government has not yet put forward an alternative acceptable to the three main groups in the coalition.  So the Renzi-Berlusconi deal is now the only concrete proposal — it backs up the talk that Renzi, the 39-year-old Florence mayor, will be a man of action in Italian politics.  Renzi won the party’s leadership in a contest in November 2013 over token opposition.  Renzi is neither a minister in Letta’s cabinet nor a member of the Italian parliament, and he’s been more of a critic of the current government than a supporter of a prime minister who until recently was the deputy leader of Renzi’s own party.

By way of background (those familiar can skip the following three paragraphs):

Italy has gone through a few different electoral systems, but most of them have featured either closed-list or only partially open-list proportional representation.  Reforms in 1991 and 1993 transformed the previous system in what’s informally been called Italy’s first republic, which spanned the postwar period until the collapse of the dominant Democrazia Cristiana (DC, Christian Democracy) in a series of bribery and corruption scandals collectively known as Tangentopoli (‘Bribesville’).  But the current system dates to 2005, when Berlusconi ushered in a new law that everyone (including Roberto Calderoli, who introduced the 2005 legislation) now agrees is awful and which Italy’s Corte costituzionale has now invalidated.

The current law, which governed Italy’s elections in 2006, 2008 and 2013, provides for a national proportional representation system to determine the 630 members of the lower house, the Camera die Deputati (Chamber of Deputies).  The party (or coalition) that wins the greatest number of votes nationwide wins a ‘bonus’ that gives it control of 55% of the lower house’s seats, not unlike the Greek electoral system.  But the 315 members of the upper house, the Senato (Senate), are determined on a regional PR basis — the top party/coalition in each of Italy’s 20 regions wins 55% of the region’s seats.  That means, however, that one party/coalition can hold a majority in the lower house, but wield much less than a majority in the upper house.

That’s the exact situation in which Italy found itself after the February 2013 elections, when the Democratic Party and its allies in the centrosinistra (center-left) coalition narrowly edged out Berlusconi’s centrodestra (center-right) coalition.  Beppe Grillo’s protest Movimento 5 Stelle (M5S, the Five Star Movement) followed closely behind in third place.  It meant that while the Italian left controlled the Chamber of Deputies, it couldn’t muster a majority in the Senate.  After a three-month political crisis that ended with the inability to elect a new Italian president (Italy’s parliament ultimately decided to reelect the 88-year-old Giorgio Napolitano to an unprecedented second seven-year term), the Democratic Party’s leader Pier Luigi Bersani resigned, and Napolitano invited Letta to form Italy’s current government.

The Renzi-Berlusconi deal sketches out an electoral reform on roughly the following lines:

  • The Chamber of Deputies would become, by far, the predominant chamber of Italian lawmaking.  The Senate would hold fewer powers as a region-based chamber.  Italy’s national government would also consolidate more powers away from Italy’s regions.
  • Deputies would be elected, as they are now, on the basis of national, closed-list proportional representation, which concentrates power in the hands of party leaders and elites (as opposed to open-list, which would allow voters to choose the members that represent them in parliament).  An alternative might be something akin to the proportional aspect of the Spanish electoral system — in Italy, it would mean a proportional system divided into 118 constituencies, each of which elects four or five deputies.
  • If a party/coalition wins over 35% of the vote, it will still yield a ‘majority bonus’ of either 53% or 54% of the seats in the Chamber of Deputies.  If no party/coalition wins over 35%,  the top two parties/coalitions will hold a runoff to determine who wins the majority bonus.
  • Italy would introduce a threshold for parties in order to reduce the fragmentation of Italy’s politics — a party running outside a coalition would need to win 8% of the vote and a party running inside a coalition would need to win 4% or 5% of the vote running outside a coalition (though the thresholds would be much lower in a multi-district ‘semi-Spanish’ system).
  • The deal would not replicate the French system, which elects legislators to single-member districts in a two-round election, and which has been discussed often as an alternative for Italy.

The details are not so important at this stage, because they could change as the Renzi-Berlusconi deal begins the long process of turning into legislation.  But if Renzi can pull the majority of the Democratic Party along, and if Berlusconi’s Forza Italia supports the deal, the two groups could steamroll Italy’s smaller parties, even in the Senate.  If Alfano and his bloc joins, the deal would be unstoppable.  Renzi has already won a majority of the party’s executive committee (a promising first sign), and Alfano has indicated that he’s open to the reform (though less excited about closed lists).

But there are all sorts of fallout effects — politically, legally and electorally — to contemplate over the coming days and weeks. Continue reading Renzi, Berlusconi team up for electoral law pact →