Italy In Chaos: Country To Vote Again After President Blocks Government; "Unclear What Happens Next"

In what may have been the worst possible outcome of this weekend's events in Italy, Rome finds itself on the verge of a Europe-sponsored constitutional crisis.

Recall that when we previewing the possible outcomes of Italy's government stalemate, in which president Mattarella had threatened to veto the choice of Paolo Savona as economy minister due to his anti-Euro/establishment sentiment, we said that the most likely - and market friendly - outcome, was for President Mattarella to give in to public pressure and the threat of a new election, averting a potential constitutional crisis. We also said that the second most likely outcome, and potentially far worse for markets, was that "if Mattarella and the coalition partners hold firm, we may be set for new elections, with M5S likely to repeat April’s success and Lega likely to increase its share of the votes, eating up Berlusconi’s party."

Moments ago that's precisely what happened, when Italy's premier designate, Giuseppe Conte, 53, told reporters after meeting the head of state Sunday evening that he had handed back his mandate for forming “the government of change" to president Mattarella. "I can assure you that I did my utmost to try to fulfill this task" he added.

Italy president Sergio Mattarella and PM designate Giuseppe Conte

As a result, and as League leader Salvini said, Italy is now set to vote again.

As we reported earlier, Mattarella, who is supposed to be impartial but appears to have been anything but in this case, and was tasked with naming the premier and ministers, earlier rejected the candidacy of economist Paolo Savona, 81, who has repeatedly urged the Italian government to plan for a euro-exit, and who has criticized what he says is German dominance over Europe.

In other words, Mattarella sided with Europe over Italy's own choice.

“We worked for weeks, day and night, to ensure the birth of a government which defends the interests of Italian citizens. But someone (under pressure from whom?) said no to us,” Salvini wrote in a Facebook post, indirectly attacking the president's veto of Savona.

“At this point, with the honesty, coherence and courage of always, you must now have a say,” Salvini added in a call for early elections.

Salvini's scathing attack on the president continued: "If a government has to start conditioned by threats from Europe, that government won’t be backed by the League." The League leader then said he’d seek a full mandate in the event of new elections.

For his part, Mattarella pretended that he wasn't the reason for today's dramatic failure, which as some have said, may now result in a constitutional crisis:

  • *ITALY'S MATTARELLA: NO ONE CAN SAY I WAS OBSTACLE TO NEW GOVT
  • *MATTARELLA: ONLY FIN MIN PROPOSAL WAS PROBLEMATIC
  • *ITALY'S MATTARELLA SAYS AGREED TO ALL MINISTERS EXCEPT FIN MIN
  • *ITALY'S MATTARELLA: WANTED MINISTER WHO WOULDN'T RISK EURO EXIT
  • *MATTARELLA: EURO MEMBERSHIP FUNDAMENTAL FOR ITALY'S FUTURE

What happens next? Nobody knows, and certainly not Italy's most popular politician, Five Star leader Di Maio who said it is "unclear what will happen in next months":

  • *FIVE STAR DI MAIO SAYS UNCLEAR WHAT WILL HAPPEN IN NEXT MONTHS

Meanwhile, Di Maio refrained from blaming Brussels for what just happened, saying he blames the rating agencies, and that he is "very upset" by Italy’s president decision.

There is still some hope for clarity and the avoidance of a constitutional crisis...

  • *ITALY'S MATTARELLA SAYS WILL TAKE A DECISION SOON ON NEXT STEP

... Which means the president will now wait for his marching orders straight from Brussels before deciding what to do next. Meanwhile, the Italian people can't be delighted that their own president has hijacked the political process to the benefit of Merkel and Jean-Claude Juncker.

There is one other possibility: as we laid out earlier, "a very unlikely scenario is that Parliament calls for Mattarella’s impeachment, as per Article 72 of the constitution." While an impeachment seems unlikely at this point, should the process merely begin, watch as the Euro is reacquainted with gravity and Draghi is dragged back to do "whatever it takes" to keep Europe together.
 

Comments

Skyline89 sidfalco Sun, 05/27/2018 - 18:14 Permalink

Mattarella did his job, which, as president of the republic, is to guarantee the constitution.

He's not under any pressure from Brussels. 

You don't even know who Mattarella is and you feel like you can post an article here. His father stood against the fascists and his brother was killed by the mafia.

Also after working nearly 20 years as a portfolio manager, I can safely say that the best choice from an economic point of view for Italy's future is to not give in to populism and the euro challenges.

A euro exit will destroy value as: a) Italy's currency will depreciate by over 50% and home and businesses' values will plummet, b) Italy will possibly default on their debt, c) we will be cut out of the common euro market with decrease trade and less jobs, d) our political issues won't be solved, as increasing poverty will fuel even lower level populism than the one Salvini represents.

Brexit lost the UK a killing in terms of jobs, money and relevance. The pound is down and home values have dropped. Jobs are moving back overseas. Open your eyes. That doesn't work.

Mattarella is doing the job he's been hired for, that is to defend the constitution of our nation (let me remind you that Salvini got 17%, not 83%) so that we don't repeat the mistakes that the UK made, which destroyed a huge deal of wealth. 

In reply to by sidfalco

luigilamour Skyline89 Sun, 05/27/2018 - 20:20 Permalink

No Mr. Skyline89:

1) from an economic point of view like it was far better for the greek people renege on the public debt (because the debt load of Greece is not the same thing of private debts that the greek people contract, I see a very different responsability for the two, don't you?) confront the transitorily grave consequences of exploding interest rates on the international markets for new greek debts but all of a sudden being freed from so many politicians to dole out something more from the greek savers (yes the greek savers that try to live of market profit offering their labour at the best employer reachable and spending their earnings at the best price for the best quality available) the same is for the Italians: No Mr. Skyline you are describing the best option for the crony capitalism of the rotting and always enlarging alliance of ever more indebted State/big corporation monopolies/big banks, they have to be saved at any cost ...notwithstanding they are not kept responsible with their equity of the loss they incur but so frequently putting in danger the works of this little not systemic but so profitable entrepeneurs...so for istance when you tour these big italian conglomerate that just bring the "books" there to get a "concordato preventivo"..voilà for an indefinite time they will not fail but the judicious entrepeneur that made all the works for them ..oh yes that will fail the banks will not wait an indefinite time with their not systemic costumer managing to find out a new year earning because the last is indefinitely unpayable under the "concordato preventivo"; you fail to understand people work to solve every of their problems, also the financial problems but when the rules are not the same and going to be not the same if you are not well connected it is better to break the system if that is required to have a say: Italy will have the same debt problem later anyway but in the meantime it would have been lost or not this time to begin solve these problems at the roots.

Just only one second no, a big no:

2) In August 2012, 17 for a minute I assisted in Sils Maria a very bad behaviour: I was there on my last working day for that year and on the private property I was, had I to use the private grass road with stationing a little tractor to load with the handsplitted wood I was working to and for that reasons people correctly understood to not enter from there but take the longer but public route; with the exception of a as large a group as rude and arrogant that directly entered the fresh grass to cut yet: incredibly (I correctly realized they were probably Italians...yes we are a little bit rude!) a quiet couple from Bergamo that made the acquaintance with the day before informed me almost sorry for me that our governing president Mario Monti was just passed hidden there...Oh my God the man that unelected unilaterally almost elevated three times the taxes over the already saved/already taxed houses of the italians and in the same time didn't cut a dime of the national spending, that keep an house in Silvaplana near Sils Maria (and how much undeclared money on swiss accounts???) but dealt officialy and unofficially with the then swiss president Widmer Schlumpf to steal the italian little saver of the very obvious right possibility to protect their saving in a private swiss account...hey please don't tell an Italian crony capitalism is the best option from an economic point of you...I wish you get what you have asked for..responsability is the best teacher!

 

In reply to by Skyline89

Faeriedust Skyline89 Sun, 05/27/2018 - 21:14 Permalink

What is your position on the claim that the Euro as currently structured acts as a "money pump" shifting wealth from the "southern"/Mediterranean countries to the export-oriented North (Germany, Belgium, the Netherlands)? How can Italy deal with its perennial budget problems without the option of periodic devaluation?  And are you happy with being turned into a holding area for the flood of immigrants that Germany first encouraged to come to Europe, and now doesn't want?  Finally, as a portfolio manager, how does your economic benefit translate into the experience of ordinary working Italians?  Is what is good for you good for the majority of citizens?

In reply to by Skyline89

Dincap Skyline89 Sun, 05/27/2018 - 22:24 Permalink

LOL

The article is well describing what is going in Italy and there is no need of knowing Mattarella's family and father and grandpa in order to observe and understand what he is doing as loyal servant of Germany and powerful interests against Italian Constitution and people. Italy is a parliamentary republic not a presidential one but since Germany and ruling class were dissatisfied with the new government they decided to change things and Constitution and put in charge the pathetic obedient Mattarella. Abolishing the vote in the colony should be the next step.

In reply to by Skyline89

moobra Skyline89 Sun, 05/27/2018 - 22:31 Permalink

So upholding the will of the people is not guaranteeing the constitution?

So his dad and brother were good guys. So what. Serial killers have nice relatives.

As a portfolio manager profiting from globalisation, job losses, rising immigration levels, overstressed infrastructure (which barely affects you on your salary), increasing crime, you would undoubtedly lose if the game changed.

So I guess if falling house prices are bad in the UK then infinite house prices must be good (for some) but not the majority.

After 30 years of integrating Brussels into the UK with no vote, you are amazed that in less than 2 years there are some problems with Brexit.

Looks like the wealth destruction is only yours.

Pity.

 

In reply to by Skyline89

JackieCogan Skyline89 Mon, 05/28/2018 - 03:05 Permalink

You should seriously be on medications if you just believe half of the bullshit you're saying. Or, you're just another one of those red warm chili liberaltard. In both case you should just keep your MF comments to Corriere or la Stampa. Even NY Times should do as they're always prone to publish this kinda shit.

In reply to by Skyline89

icedoc Skyline89 Sun, 05/27/2018 - 19:31 Permalink

There is sometimes the notion that if we are going to hang we wish it to be done by our own.

 

I think the reality is that as you say the economy will drop by 50 %, that will be what it takes to normalize the economy. Staying with the Euro will only make sure that the decisions are done by Brussels for the ECB's benefit only and not for the benefit of Italy.

In reply to by Skyline89

mkkby shortonoil Sun, 05/27/2018 - 18:54 Permalink

Let the people have election after election until they get the socialist free everything they want.  Since they are already beyond any sane debt limit, that should be interesting.  Let's watch while italy "goes greece" and becomes a third world shit hole.

Nobody forced them to borrow too much.  They can hang their corrupt politicians if they want, but sheeple are too stupid to understand what happened.  They'll blame the bankers, which is just as stupid as blaming the drug dealer.  You put the needle in your arm voluntarily, dumb ass.  No sympathy.

Here's an idea for you socialists who want *more*.  Get to work producing something of value.  A non starter, correct?

In reply to by shortonoil

HRH of Aquitaine 2.0 mkkby Sun, 05/27/2018 - 19:22 Permalink

Eventually the takers run out of stuff to take. The makers stop working. Why be a tax mule and labor for nothing, or worse, to see the profit of your labor squandered. I hate communism.

I am reading Asimov, the Foundation series. In the first book (which isn't the first book it was published later than the original three books in the series but is first in the timeline of the series) Seldon, the mathematician is thinking about his special psychohistory statistics paper and how people do not learn from history. The same mistakes, are repeated.

It is amazing that this next generation in the US has been raised to be so crippled and utterly contemptible. Too many participation trophies they didn't earn nor deserve.

In reply to by mkkby

mkkby HRH of Aquitaine 2.0 Sun, 05/27/2018 - 21:33 Permalink

Lose the victim mentality, bro.  There are no takers holding the sheeple down.  It's their own laziness.  People who work for a living and vote for bernie sanders are little takers hoping the big takers will drop some crumbs their way.

Your books are wrong.  The producers don't give up.  They fucking move where there are low taxes.  Or they spread some cash on politicians who vote them a break.

Don't blame the drug dealer for putting the needle in your arm.  It's fucking self inflicted.

In reply to by HRH of Aquitaine 2.0