Italian prime minister Matteo Renzi resigned as promised in the wake of an overwhelming defeat of a referendum he sponsored.
Today Sergio Mattarella, Italy’s president, appointed Paolo Gentiloni, the 4th Consecutive Technocrat as the new prime minister.
Paolo Gentiloni, Italy’s foreign minister, has been chosen to replace Matteo Renzi as prime minister amid signs of a quick solution to the political crisis that has convulsed the eurozone’s third-largest economy over the past week.
After three days of consultations with parliamentary leaders, Sergio Mattarella, Italy’s president, on Sunday summoned Mr Gentiloni to the presidential palace in central Rome and asked him to form a government. Mr Gentiloni accepted in a brief statement.
The urgency of installing a new government increased on Friday when the European Central Bank rejected a request from Monte dei Paschi di Siena, the country’s third-largest bank, for extra time to raise capital among private investors.
The ECB’s decision has increased the chances that the Italian government may have to use state funds to rescue one of its most prized financial institutions, which has been dogged by non-performing loans. The board of MPS was expected to meet on Sunday and make a statement.
Mr Renzi, whose government lasted nearly three years, wrote on his Facebook page on Sunday that he offered Mr Gentiloni “best wishes and all my support” in office. But he also made clear he would not give up on his own political ambitions.
“To the millions of Italians who want a future of ideas and hope for our country I can say that we will never tire of trying again and moving forward,” he said.
There have been widespread calls from all political parties to move to early elections, probably in the second quarter of 2017. Mr Mattarella made it clear that elections could be held only if the two separate electoral laws for the lower and upper houses of parliament were “harmonised”, calling it “indispensable” for a vote.
At the moment, lawmakers in the upper chamber are elected on a proportional basis, while in the lower chamber they would be elected in a system that gives bonus seats and a comfortable absolute majority to the winning party.
Renzi Not Vanquished Yet
Renzi’s ploy to resign wasn’t really an honest one. He wants his job back and will run again in the next election.
He had the gall in the wake of his much wider that expected 59-41% defeat to say 41% makes his Democratic Party the largest party in the country. Polls show otherwise.
The risk for the Democratic Party is the party splinters into pro-Renzi and anti-Renzi factions. Should that happen, it will be to the benefit of Beppe Grillo’s Five Star Movement (M5S).
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- Great Timing Award: Wolfgang Schäuble Says “Greece Must Reform or Leave Eurozone”
- ECB Rejects Monte dei Paschi Plea for More Time, Bail-In Likely
Mike “Mish” Shedlock
This is all deckchair arranging. The ship already hit the iceberg and is sinking. The ONLY way forward is to repudiate the Euro and restart the Lira. It’s not fixable otherwise, especially with the world’s economies in deflation. The EU was a Neo-liberal construct and that has doomed it.
Don’t underestimate the Euro/EU. They will stop at nothing to keep it together. You don’t know what a zealot is until you’ve studied them. Only a strong pro-Italy Italian leader stands a chance and where is such a person?
Unemployment means nothing to the EU. It’s a tool to help crush countries into Federation. Italy is screwed as it won’t be able to ditch the Euro or leave the EU.
Italians are crushed by the euro because italians are not able to compete with german efficiency for products inside europe so german products come to italy and italian exports to other eu countries have been dropping even in high value add categories and on top of that chinese cr*p pouring in thanks to China being in the WTO has destroyed italian low value add manufacturing completely and italians also currently wear clothes made in the sweatshops of vietnam and Sri Lanka.
Returning to a freely floating lira would mean the markets would crash the value of lira about 50% giving italian industry a boost with their products being competitive against german ones inside italy but also in the export markets of other EU countries, giving italian tourism a boost (many who would have gone for vacations in Italy, Greece and Spain are going to vacations in Turkey, Tunisia and Marocco instead because of Euro drove prices up) etc.
This would mean employment would instantly become better, many youths would be employed and be able to start a family helping Italys totally anemic birthrate which has been further dropping during Euro, Italian government which pays some benefits to italian citizens would have less benefits to pay up because people would be employed and those italian banks with massive non-performing loans would be having less non-performing loans when companies would have work again.
Although the value of debt would shoot up about 50% if counted in euros because the fall of the lira at least they could pay the interest provided Italys central bank would have competent people running it and guaranteeing the same interest rate level as euro has.
The currency has to be FREE FLOATING with markets deciding the value.
Currently italy is staying in euro to guard the value of euro based loans which will never be paid back thanks to euro destroying italian competitiveness.
In Lira some of those loans would be paid back and there would a boom in manufacturing and service industries with lots of employment for italians.
Current italian government is only looking after the italian elite which wants to protect the euro values of their investments and real estate…
Jensen: You have meddled with the primal forces of nature, Mr. Beale, and I won’t have it!! Is that clear?! You think you’ve merely stopped a business deal. That is not the case. The Arabs have taken billions of dollars out of this country, and now they must put it back! It is ebb and flow, tidal gravity! It is ecological balance!
You are an old man who thinks in terms of nations and peoples. There are no nations. There are no peoples. There are no Russians. There are no Arabs. There are no third worlds. There is no West. There is only one holistic system of systems, one vast and immane, interwoven, interacting, multivariate, multinational dominion of dollars. Petro-dollars, electro-dollars, multi-dollars, reichmarks, rins, rubles, pounds, and shekels.
It is the international system of currency which determines the totality of life on this planet. That is the natural order of things today. That is the atomic and subatomic and galactic structure of things today! And YOU have meddled with the primal forces of nature, and YOU WILL ATONE!
Am I getting through to you, Mr. Beale?
You get up on your little twenty-one inch screen and howl about America and democracy. There is no America. There is no democracy. There is only IBM and ITT and AT&T and DuPont, Dow, Union Carbide, and Exxon. Those are the nations of the world today.
What do you think the Russians talk about in their councils of state — Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments, just like we do.
We no longer live in a world of nations and ideologies, Mr. Beale. The world is a college of corporations, inexorably determined by the immutable bylaws of business. The world is a business, Mr. Beale. It has been since man crawled out of the slime. And our children will live, Mr. Beale, to see that perfect world in which there’s no war or famine, oppression or brutality — one vast and ecumenical holding company, for whom all men will work to serve a common profit, in which all men will hold a share of stock, all necessities provided, all anxieties tranquilized, all boredom amused.
And I have chosen you, Mr. Beale, to preach this evangel.
NETWORK, the movie