Italy’s president, Sergio Mattarella, asked Renzi to stay on as prime minister. Renzi agreed to do so until a budget is in place, likely later this week.
The vast majority of the population wants an immediate election, but Mattarella wants another technocrat. Voter be damned, Italy’s 4th consecutive technocrat prime minister is coming up. I am available, and waiting a call.
The first mission of the new technocrat will be to pass legislation that will make it much harder for Beppe Grillo’s Five Star Movement (M5S) to get into power. Voters be damned again.
Exit Stage 3 Delayed
Please consider Renzi agrees to delay resignation until after budget vote.
At a meeting in the presidential palace in Rome, Mr Renzi expressed his intention to resign after suffering a bruising defeat in a constitutional reform referendum held on Sunday. But Sergio Mattarella, the Italian head of state, asked him to freeze the resignation until the budget is approved, according to a statement from Mr Mattarella’s office.
One Italian official said the budget could be approved within a week, after which Mr Mattarella would begin the formal talks on picking a new prime minister. The 2017 budget law has been passed in the lower chamber but not yet in the senate.
The two populist leaders with eyes on Mr Renzi’s job — Beppe Grillo, head of the Five Star Movement, and Matteo Salvini, leader of rightwing Lega Nord — have called for immediate elections, though Mr Mattarella is unlikely to go that route.
Instead of calling elections, Mr Mattarella is expected to choose a technocrat to take over as prime minister. Among the likely candidates are two senior figures in the country’s establishment: Pier Carlo Padoan, finance minister, and Pietro Grasso, president of the Italian senate.
Mr Renzi’s comprehensive defeat could also have consequences within his Democratic party that may complicate the transition process. There is increasing speculation that he may be forced to quit as leader of the centre-left party. Mauro Baragiola, a political analyst at Citi, said the party was at risk of splitting into pro- and anti-Renzi camps following the referendum.
Mission Number One
As a Defeated Renzi Falls on His Sword, the primary mission of the new technocrat is to screw Beppe Grillo. The financial times offers this color commentary blast of Grillo:
Mr Renzi’s successor will steer through parliament substantial revisions to a badly misguided electoral law that came into force in July. The changes will almost certainly remove clauses that award bonus seats to the party that wins parliamentary elections.
In this way they will block the anti-establishment Five Star Movement, which is within shouting distance of the Democratic party in opinion polls, from seizing control of the legislature. For anyone disturbed by the movement’s half-baked notions of withdrawing Italy from the eurozone, and bemused by the utter mess that it is making of governing Rome after its municipal election victory in June, it will be a relief that Mr Renzi’s defeat offers a way to keep the keys of national power safely from the Five Star Movement’s grasp.
Don’t Worry, Be Happy
With worries over Beppe Grillo about to be shoved to the back burner, Jeroen Dijsselbloem, president of the eurogroup, says he is confident Rome can deal with the poll result’s financial fallout.
Dijsselbloem says No Emergency Intervention Needed.
European financial markets have “so far reacted quite calmly” to Italian voters’ rejection of constitutional reforms and no emergency intervention is needed, the head of the group of eurozone finance ministers said as the euro and bank shares rebounded from morning lows.
Jeroen Dijsselbloem, president of the eurogroup, said he was confident Rome had “strong institutions” that could deal with the financial fallout from the referendum vote, and expressed confidence Italy’s struggling banks would weather the storm.
“If this is the market reaction, it doesn’t seem to require any emergency steps,” Mr Dijsselbloem said in response to a question about whether the European Central Bank should intervene ahead of a eurogroup meeting in Brussels.
Count the Lies
“Italy is a strong economy, is one of the largest economies in the eurozone, it’s a country with strong institutions,” said Dijsselbloem.
If you scored strong economy and strong institutions as lies, you scored it like I did. If you did not peg strong economy as a lie, you are in fantasyland. And of course, Italy is the third largest economy in the eurozone.
State Bailout Coming Up
The referendum makes it likely Italian banks will be able to raise required capital. Thus, Monte dei Paschi Readied for State Bailout.
While financial markets responded relatively calmly to the referendum result, people briefed on the situation said the political upheaval made it “more difficult” to secure a €1bn investment from Qatar on which Monte dei Paschi’s €5bn capital-raising plan hinges.
Senior bankers fear that a failure to shore up the bank, which was the worst loser of this summer’s European bank healthcheck, could damage already jittery investor confidence about Italy’s overall banking sector, which is hobbled by €360bn of bad loans and weak profitability.
JPMorgan Chase and Mediobanca, advisers to Monte dei Paschi, have been working with Pier Carlo Padoan, Italy’s finance minister, to persuade the Qatar Investment Authority to pump money into Italy’s third-largest lender. But hope is fading that they can secure a deal by this week’s deadline.
Without the cornerstone investment from Qatar, the other parts of the complex plan to fill the bank’s €5bn capital shortfall are likely to collapse.
“They are desperately seeking to accelerate a solution but it is being done too late. This problem should have been resolved months ago,” said one large investor in Italian banks. “If Monte Paschi’s deal fails, you are only going to see prices going down across the sector,” this person added.
Under that scenario bankers see an expected €13bn equity raising at UniCredit, Italy’s largest bank, being priced at a low valuation, and midsized lenders Carige, Banca Popolare di Vicenza and Veneto Banca potentially struggling to raise the at least €3.5bn in additional capital they need.
With €360 billion in nonperforming loans, much of which is worthless paper, it’s amusing to see everyone worried about ability of various banks to raise €1 or €5 billion here or there.
Monte dei Paschi has already burnt through €8bn raised in the past four years, it’s ridiculous to pretend that another €1 from Qatar will do anything but delay the problem a few months.
M5S, Northern League Coalition?
Even if new anti-M5S legislation is passed, the nannycrats are not out of the woods. Both the Northern League and M5S are anti-euro.
In the past Beppe Grillo has avoided coalitions, but politics makes strange bedfellows. The two parties are talking, thus the urgency of mission number one.
Mike “Mish” Shedlock
Mish – please don’t think for a minute that the Eurozone leaders and the wider EU are not behind this. Brussels is pulling the levers behind closed doors and the electorate are noise. The big banks are on side as are the media, FT a perfect example.
NOTHING will be allowed to get in the way of the project. Votes, voters, unemployment, bust banks – NOTHING.
What they call committed Europeans will be rewarded with assistance, bailouts etc.
Sceptics will be punished to show what happens if you doubt the project and its leaders.
It was planned that crises would help speed Federalisation. It is expected.
FT, impartial as usual – “For anyone disturbed by the movement’s half-baked notions of withdrawing Italy from the eurozone, and bemused by the utter mess that it is making of governing Rome after its municipal election victory in June, it will be a relief that Mr Renzi’s defeat offers a way to keep the keys of national power safely from the Five Star Movement’s grasp.”
Rome (governed by M5S) withdrew bid for the three-week extravaganza called Olympic games:
https://www.theguardian.com/world/2016/oct/11/italy-suspends-rome-2024-olympic-games-bid
Looks like the M5S is the most mature party anywhere.
Monte dei Paschi is a perfect example of what the Italian problem is. Of total assets of € 160 bn of which lending is € 104 bn, as much as € 45 bn is gross NPLs. Net NPLs is € 22,5 bn. Book equity is € 8,75 bn. So on a value adjusted basis the equity is in negative territory.
Monte dei Paschi is kept alive by Target 2 funding coming from Bundesbank. Total deposits are € 130 bn.
So how much does it take to repair the bank? And the next one. And the one after that?
It will probably end up in a bail-out in order not to destabilise Italy.
It’s the NPLs that are the problem and the cause? The EURO doesn’t fit Italy.
Bailout/in all you want. Won’t it happen again until Italy can compete or lending criteria are massively tightened leading to a credit crunch?
How will Italy compete?
Lower wages?
What if the industrial capital needed is predominantly German/French?
FDI? Probably. Steal it from UK via incentives.
Italy should ditch the Euro to start a recovery with a competitive x-rate vs Germany else it is Greece MK2 delayed a while longer.
I also think the EU is working in an insidious and nefarious way to undermine Brexit and water it down. They are doing so via links into Parliament and the media.
Their tentacles are everywhere and they work just like the Jesuits. Not to be trusted in any matter pertaining to freedom of the individual or true Democracy.
If you want to know there was a plan, study Lord David Owen – YouTube speeches & writings. He was connected at the top table and there was openness about the plan and that Federalisation would be helped via crises crushing people to come together. The crises are predictable and welcome in quarters wanting to force Federalization at any cost.
David Owen was a well know Europhile and not some extremist idiot.
The Eurocrats cannot lose as they do not suffer the consequence of their theories.
Their eyes are fixed on the goal at any cost.
They have full protection – pensions, salaries etc.
No Empire was forged without suffering. We are witnessing this Empire formation intended to occur without bloodshed. This time the cost is in high youth unemployment and the trouncing of Democracy when it doesn’t line-up with the goals of the project.
MPS logo looks like they are giving the finger.
https://www.theguardian.com/business/live/2016/dec/06/italy-monte-dei-paschi-rescue-markets-relaxed-business-live#img-1
Italy actually has quite a strong economy. Unfortunately for the eurocrats,a huge part of that economy is simply out of their reach as it is a gigantic parallel / cash based / underground / black market the kind you would expect in a third world country, not a western one. This is due to the unusually high level of corruption at all levels of government and tax rules that range from inane to outright insane.
It is becoming more and more obvious that the situation throughout most of the West is “The Government” versus “The People”.
And the psychopaths running “The Government” (and their Oligarch overlords) will just not stop. They will have to be forced to.
Worth a read. I don’t believe anything will change but some truth in this.
http://blogs.spectator.co.uk/2016/12/eurosceptic-union-forming-across-europe/
The key to solve all financial problems: “Extend and Pretend”. It only works when you own the central bank.
European financial markets have “so far reacted quite calmly” to Italian voters’ rejection of constitutional reforms and no emergency intervention is needed, the head of the group of eurozone finance ministers.
“If this is the market reaction, it doesn’t seem to require any emergency steps,” Mr Dijsselbloem said.
……
Might read
……
WE have “so far reacted quite calmly” to Italian voters’ rejection of constitutional reforms and no emergency intervention is needed, the head of the group of eurozone finance ministers.
“If this is OUR reaction, it doesn’t seem to require any emergency steps,” Mr Dijsselbloem said
……
And take it from there….
Junker has said the those voting for “No” in Italy are irresponsible.
Meanwhile Barnier is putting pressure on the UK for the negotiations and some in the BDI in Germany are concerned with the future of the single currency while CEBR considers the chance of Italy still being in the single currency 5 years from now to be < 30%.
Personally, I think nothing will change and they will stumble along until the old voters are dead and the youngsters who know no different just give up thinking about it and consider the condition they find themselves under the norm.
“Personally, I think nothing will change and they will stumble along until the old voters are dead and the youngsters who know no different just give up thinking about it and consider the condition they find themselves under the norm.”
I agree. The tyrants in Brussels will just keep things rolling along. And the young European sheeple will just go with the flow, because they don’t know better.
You may well be right.
On the other hand the purposeful fragmentation and re-alineation at national level might just not get resolved to an acceptable outcome.
EU has to later deal with what it creates, and people learn. So far EU has only had to deal with local blowback in host nations. No one has attacked Brussels or Strasbourg, there have been no EU orientated or related political assassinations. We aren’t likely to hear about until happens, no one is going to advertise, but likely to be vicious and purposefully unusable for EU propaganda out of sheer extreme.
“Voters be damned again.”
Same ole same ole on the human feed lot.
So,,,EU Armageddon is back on hold? Again? Wolf, wolf. Who coulda knowed? Or, put another way, the Central Banks have this all on lock down. Keep running elections until the result fits the agenda. Command and Control has it all handled.
Goldman Sachs 2016.
De-mock-racy marches on.
,,,or, the Euro and the Dollar are private currencies. Their value will be controlled by their owners/creators, hence the value of everything that is denominated in them.
“hence the value of everything that is denominated in them.”
Yes, even gold.
It’s as if TPTB think that only the CIA can instigate popular revolts — which may actually be true, I don’t know.
What would happen in the USA if the results of a general election were discarded by the elite?
Comet ping pong intervention.
Zioglobalists are tenacious beasts but their hubris prevents them from distinguishing ebb from flow. Their future holds waves of defaults and many heads on pikes.
I really don’t see that for the EU. The populations are too compliant. No one is up in arms over installed technocrat leaders, no one has enough anger to make anything change.
It’s easy to divide and conquer when you have 28 members, all different, and all have their own divisions internally too.
It is not the US and the people in charge are too far away from the population to feel threatened. They are all theorists and don’t care so long as they achieve their aims. If that is at the cost of over-riding democracy and throwing millions on the unemployment heap they really don’t care.
Well, they are the CORE of the problem and need to be wiped out. Why concern yourself with peripheral ephemera except as space filler. I am just fighting back with their proven methodology of if you repeat something often enough, people believe you. With the difference that what I am saying is true, and what they are saying are self-serving lies. You sound like one of their trolls. Shalom.
Just a realist.
One thing I do think – their techniques could bring about the one thing they fear the most – war internal to Europe – when some area of the continent does become so pissed off a demigogue or group of disaffected rise up.
Ballot boxes are safety valves. Ignore them often enough and the pressure is released some other way.
Do you ever say anything different? At least Atoosa throws in some Franz Liebkind comedic edge to it. You just make the Zioglobalists seem like they’d be doing you a favor. Maybe provide you a neo-nazi welfare program, for skinheads who keep accidentally shaving their balls when they are supposed to be shaving their heads. Sheesh! Mix it up a bit. You’re like the ones they make fun of for selling you those white sheets at full retail.
Speaking of which, where has our resident anti-Semite (((Trader Joe))) toddled off to? I actually kind of miss him, like a crazy uncle.
And please don’t come at me with that tired antisemitic BS. The Zioglobalists care about the average decent Jew about as much as Hillary cares about her snowflakes. It’s called cypher.
Bankers want to be bailed out.