Four new polls show comedian Beppe Grillo’s Five Star Movement (M5S) ahead of prime minister Matteo Renzi’s Democratic Party (PD) were an election held today.
The next election will be no later than May 23, 2018. Renzi promised to step down if he fails a constitutional reform referendum later this year.
The reform referendum will likely be held no later than this October.
Beppe Grillo – Comedian Founder of Five Star Movement
Renzi Rocked Yet Again
Please consider Renzi Rocked as Five Star Surges in Polls.
The populist Five Star Movement has emerged as Italy’s leading political party, overtaking Matteo Renzi’s ruling Democratic party (PD) in four separate opinion polls that have exposed the growing vulnerability of the country’s centre-left prime minister.
The primacy of the Five Star Movement, which is led by the sardonic comedian Beppe Grillo and has called for a referendum on ditching the euro, reflects a shift in public opinion against Mr Renzi that will heighten fears of a return to political instability and uncertainty in the single currency’s third largest economy.
“A government collapse is more than just a possibility, it is a scenario that we are looking at very closely,” said Federico Santi, an analyst at the Eurasia Group consultancy. “The trend has been clearly bad for the ruling party and favourable to the Five Star Movement, driven by issues — like migration, the banking troubles and corruption scandals — that are not going to go away. It’s hard to see what it could take for Renzi and the PD to make a comeback at this point.”
According to polls released on Wednesday by Ipsos, the Five Star Movement is supported by 30.6 per cent of Italians, compared with 29.8 per cent for the PD. Similar polls in January had Mr Renzi’s party leading the Five Star Movement by nearly six percentage points. In the 2014 European elections, shortly after Mr Renzi took office, the PD defeated the Five Star Movement by nearly 20 percentage points.
Three other surveys taken after the Brexit vote also showed the Five Star Movement ahead, with the next national elections due in early 2018.
One by Demos released on July 1 showed the party ahead by a margin of 32.3 per cent to 30.2 per cent over Mr Renzi’s PD. Others by Euromedia and EMG showed the Five Star Movement with narrower leads of 0.5 and 0.4 percentage points. Another poll showed the Democratic party hanging on to a narrow lead.
The polls look even darker for Mr Renzi if the likelihood of a run-off between the two largest parties — which is called for under Italy’s new electoral law if no party exceeds 40 per cent — is taken into account. In those scenarios, the Five Star Movement would defeat the PD by as much as ten percentage points, as right-wing voters would coalesce around the protest party.
Beneath the surface, there is increasing talk of what might happen should his efforts fail. Most likely, said Mr Santi, a technocratic government would have to take charge, rather than a quick move to fresh elections. But no clear candidate has yet emerged who would take the reins.
Credibility of the Italian Political Class at Stake.
Renzi asked voters to stick with him and promised an aggressive campaign in favor of the referendum.
His rationale is laughable: “The referendum is not crucial for the destiny of an individual, but for the future credibility of the Italian political class,” said Renzi.
Are voters really supposed to rally around the notion of saving the credibility of the ruling political class?
Wow! The statement is so ridiculous one has to wonder if Renzi secretly wants the referendum defeated.
40% the New Majority
The referendum would shrink the Italian senate and give a majority of parliament to any political party that could achieve 40% of the vote in national elections.
If no party achieved 40%, a runoff would take place and the winner would automatically receive a majority of parliament.
Curiously, M5S is against this reform although it may the best way for Grillo to get the vote he seeks on leaving the Euro.
Renzi Stung in Mayoral Elections
In recent mayoral elections Renzi’s party went down in defeat in in Rome, Turin, Naples and Trieste. Rome and Turin went to the Five Star Movement.
For mayoral details and details of the constitutional referendum, please see Stinging Defeat of Renzi in Italian Mayoral Elections; 40% the Proposed New Majority
Italian Banking System Near Collapse
Monte dei Paschi, the oldest bank in the world, and Italy’s third largest is so woefully undercapitalized that even the ECB recognizes that fact.
On July 4, I commented the ECB Triggers Another Bank Shares Selloff, Tells Monte dei Paschi to Shed More Assets.
German Chancellor Angela Merkel and the ECB are at odds with Renzi over how to fix €360 billion in nonperforming loans in the Italian banking system.
Merkel rebuffed Renzi’s request for state sponsored bank bailouts on four occasions.
On June 30, I asked Italy’s Zombie Banks on Death Bed, Bail-Ins Coming?
Merkel chastised Renzi, “We wrote the rules for the credit system, we cannot change them every two years.”
Under a bail-in scheme bondholders and depositors will take a huge hit. Voters are already angry over the bail-in of bondholder of much smaller Banca Etruria last December.
In Italy, individual investors own close to €200 billion in Italian bank bonds. Imagine the anger should they lose even a portion of their investments.
This is why Italy Threatens to Defy Merkel, Brussels Over bank Bailouts.
Italy on the Euro
What has the Euro done for Germany vs. Italy?
Voters Hold the Key
Yesterday I asked Can the EU Survive as a Prison? Who Has the Keys?
The short answer is voters hold the key, and they are already mad as hell. If bail-ins happen, it will be the end of the Renzi government for sure.
Renzi Slams Deutsche Bank
ZeroHedge has an excellent article out today on the state of Deutsche Bank through the eyes of Renzi.
Please consider A Furious Italian Prime Minister Slams Deutsche Bank As Europe’s Most Insolvent Bank
In a surprising admission of reality, none other than Italy’s prime minister Matteo Renzi, “went there” and slammed Deutsche Bank as the true “derivative problem” facing Europe.
As Reuters adds, speaking at a joint news conference with Swedish Prime Minister Stefan Lofven, Renzi said other European banks had much bigger problems than their Italian counterparts.
“If this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to one hundred,” Renzi said
So just like that the Mutually Assured Destruction doctrine is activated, because now that Deutsche Bank’s dirty laundry has been exposed for all to see, Renzi’s gambit is clear: if Merkel does not relent on bailing out Italian banks, the collapse of Italian banks will assure the failure of Deutsche Bank in kind.
Also see Diving Into Deutsche Bank’s “Passion to Perform” Balance Sheet.
This kind of insanity is precisely why the euro is doomed.
Get Out Now!
I repeat my warning from last December: Get Your Money Out of Italian Banks Now!
Mike “Mish” Shedlock
Grillo is the closest to Social Credit of any pol in the northern hemisphere, actually the world with his basic income/dividend policy. Unfortunately he’s still captured by socialist dogma in his taxation policies and in the way he would finance the BIG. (It must be a directly distributed financing not via taxation) Also, he doesn’t appear to understand the second and key Social Credit policy of a retail discount that will completely eliminate any chance of inflation and can actually integrate deflation into profit making economic systems if it is a large enough percentage of discount.
If he implemented such policies the Italian economy would sing like a grand opera. Then he’d probably have to deal with intentional sabotage by the financial PTB. The financial elite would move heaven and earth to make him out to be the world’s worst @sshole. History rhymes after all. But Grillo isn’t a homicidal maniac like Hitler so maybe sanity would finally bloom for the world to see.
chdwr I believe the Swiss were the first to actually propose and vote for social credit. It went down in flames by the way.
Yes it did. Nobody ever said the Swiss weren’t swayed by conservative thinking. Maybe when 40% of the current jobs are gone in 10-15 years they’ll be a little smarter and more realistic. Or when Europe is over run by pitch fork carrying masses due to hunger and frustration maybe the Swiss will think their secretive tax haven Banking system wasn’t such a good idea. That plus….there won’t be any being neutral in the next war with smart and devastating weaponry. You sow the wind, you reap the whirl wind.
1) His rationale is laughable: “The referendum is not crucial for the destiny of an individual, but for the future credibility of the Italian political class,” said Renzi.
My guess is this is how he, his friends, the EU leadership, and the US oligarchy actually talk when they mingle among themselves. This is a bit of honesty on his part and an example of the class warfare now in progress.
2) Re bail ins – Sorry Europe but all the deficit financing has to be paid for somehow. It may not seem fair but you got ‘free’ benefits of socialism for decades, only you didn’t get to push the cost on to the next generation.
I am pretty sure that Italy will be suing you soon and you will owe another socialist nation thousands of Euros and they will only communicate with you in Italian.
Soon you will have to limit your European vacations strictly to Switzerland.
“When it gets serious you have to provoke Russia and drink heavily.”
What’s really funny you ask? A 2 kiloton yielding backpack nuke.
Now THATS downright hilarious!
Hello snack bar!
“Curiously, M5S is against this reform although it may the best way for Grillo to get the vote he seeks on leaving the Euro.”
Consociationalism fits M5S better than pluralism. A pluralist system lacks many safeguards of the former, even if the politics of the country have evolved towards the formation of a bi-party system there are reasons enough not to enhance it. For example as opposed to handing a ‘leave’ to M5S it might hand Italy strong EU legislation via a technocrat.
Remember Aldo Moro.
If you owe a little, then YOU have a problem.
If you owe a lot, then THE BANK has a problem.
That is exactly the game Renzi is playing.
Almost. Renzi still has some small remnants of competence and social conscience. Not much, but a little. He wants a solution. Had he and his countrymen / countrywomen not been free riders living on easy debt, Italian banks would not be in that place
He’s in the wrong place for absolution. He’s in the Eurozone.
They will study the issue and create the appearance of a fix. It will probably be a new alphabet program from the ECB where more guarantees are promised using the magic of printed money at a later date – unlimited and utterly massive amounts in uncountable quantities; too much to even clearly describe and even lots more if needed – but only after all connected parties meet late this Fall or early next year to discuss the matter further. Sincere promises to deal with the problem conclusively will also be provided and repeated often. Merkel will shake on it. Even more negative rates to follow, possibly century notes with deeply negative rates, issued for the purpose of bank recapitalization; with the ECB allowed to buy 100% of the issue, but only from the market (ie from straw purchasers) so as not to be illegally monetizing EU government debt. At maturity in the next century, they will figure out how to hide the loss on negative rate maturities.
Problem averted.
As I mentioned above, bail ins are OK by me in the Eurozone. Somebody has to pay the bill. Governments won’t. The people got the benefit of borrowed money. Now they have to make the payments. They voted for the creeps who are now running the EU into the ground. At least we, in the USA, still get to push our bills on to the next generation, or their kids. I’ll be long gone on to my celestial reward before the final notice here arrives in the mail for my share in a couple dozen years. The benefits of being an old guy.
Italy has not had a stable government since Mussolini (who did not make the trains run on time).
Its about time they started calling irresponsible bankers to account for causing this situation. Deutsche Bank’s derivatives are absurd. So are most of the other derivatives that bankers have issued. Sub prime loans are equally absurd, as well as printing non free market interest rates, which pushes bankers to desperately roll the dice on this absurd stuff.
We need bankers who are good stewards of the deposits entrusted to them, not endless demands for bailouts. We need sound currency, not constant inflation.
Why do journalists/commentators (Mish included) use the term “government collapse” when what they mean is “regime collapse,” i.e., a mere change of those in control of the state?
A government collapses, after all, when it ceases to exist, e.g., the Soviet Union. This was a “superstate” collapse, of course, just like that that the European Union now stands to be, and that that the American Union should be as well.
Hey, I can dream, can’t I?
Yours truly,
From the former and soon-to-be nation-state of Georgia
5Star aims to maximize happiness and well-being through non-consumptive means—sharing work, consuming less, while devoting more time to art, music, family, culture and community.
…
Germans share the work. Italians play.
You left out “eating & drinking”.
The germans don’t actually work that much. less hours annually than almost every other European country. see https://stats.oecd.org/Index.aspx?DataSetCode=ANHRS
German prosperity is base largely on a beggar thy neighbour mercantilist policy.
I smell American money coming to the rescue if “necessary”… obunghole would kill to keep TTIP going, The rest of us would prefer to calmly watch the EU sink like the Titanic.
O/T (sorta)
I don’t know about Italy but, for all the problems we’ve been hearing about France, Paris is a very pleasant place to visit if not to live in. I’ve spent three days here on my first visit and the sidewalk cafes are full of people, including attractive ladies, until late hours at night. I haven’t seen hordes of refugees descending or striking truckers. I’d much rather spend a vacation here than in London from where I just came.
From what I understand, France has been pretty effective at keeping the “immigrants” segregated from the rest of the people. Recall not long back that these immigrant enclaves were rioting and burning cars. Just stay in the tourist areas and do not go on any urban adventures.
Take a ride on the “Peripherique” (the ring-road that encircles Paris) and you will see where they keep the Muslim immigrants warehoused. Row after row of dilapidated, graffiti-covered apartment blocks.
Holiday in London LOL, you visit London, partake in Paris, go wild in Greece, get shot in LA etc.
Washington DC is pretty safe and pleasant too, if you restrict yourself to to the Disneyland section. Where the Kleptocrats live, and tour guides speak of Constitutions, Limited Governments, Freedoms and other such quaint oddities. And museums have impressive looking dinosaur bones on display. And sell flags that “we” can wave, to show what a “great” “nation” “we” are.
Did you not take the Metro ?
The difference comes when you have to deal with the French state in some way, when you try to fit into the running of the country somehow. I partly grew up in France, Francophile members of my family ( now ex-francophile), and had no real problem with the country until I became more exposed to its style of authority…on many different occasions… in short do not trust what goes on there nor give any leverage over yourself, as the state is not rooted in principles you are likely to understand, or want to experience first hand…much better to enjoy the uncomplicated privilege of being a foreigner from my point of view.
Over the last few years our eyes have been diverted from economic problems that fester and brew in Italy. Many people have failed to notice the Euro-zone debt crisis has taken a heavy toll on Italy where consumption and investment are expected to remain weak. The country’s economy has shrunk by around 10% since 2007.
All in all, it might be fair to say Italy is a European debt bomb waiting to explode. This is not sustainable and the country is held together only because of the direct intervention of the ECB which made over 102 billion euros of Italian bond purchases in 2011-2012 alone. This has continued since then and the sum has gotten much larger. More on Italy’s growing debt problem in the article below.
http://brucewilds.blogspot.com/2016/06/italys-future-hampered-by-debt_22.html
Does it even matter if they change jockeys anymore? That horse is dead.
If Italian banks fail the Italian government cannot borrow from the banks to save the banks.
French Citizens Rise Up In Their Millions – Protests being ignored by many mainstream media channels!
http://www.neonnettle.com/features/523-french-citizens-rise-up-in-their-millions-to-protest-ruling-elite
Strange why do not the italy Og. want help about the Quakes hit now and 2 month ago and they was warn i 2002 and years Too. But why not do nothing about it, I have warn in catastrofic since 1976 up to NOw 2016 and up to 2030 Yes The Year 2030 but My gov in Norway say no to warn catastriofiv world wide Why is that You say, ask them !!
They kill the Children in 2002, if You remember the Children that With Teachers was sleeping at the School that night !! warn in but my gov. in Norway say No 14 days before it Happens like 40 other in theeeeee world