Ferdinando Giugliano

About twelve months ago, as I was travelling across the Northeast of Italy during the electoral campaign, I went hunting for evidence of mounting euroscepticism across voters. Overall, my search was rather unsuccessful. Italy’s long love-story with the euro and the EU more generally was certainly under strain, but its end did not look in sight. By and large, the people I spoke to continued to consider Brussels a source of economic stability and peace.

 Read more

Ferdinando Giugliano

(OLIVIER MORIN/AFP/Getty Images)

Whenever any centre-left leader comes to power in Europe, there are always questions over who he or she will be compared to. Take François Hollande: only days after his election to the Elysée, commentators were already wondering whether he might be France’s Gerhard Schröder. The hope was that he could reform France’s labour market from the left, just as the former chancellor did in Germany in the early 2000s.

Matteo Renzi, who is set to become Italy’s youngest ever prime minister, is bound to draw such comparisons. When Time magazine chose to feature the then 34-year old mayor of Florence on its front page in February 2009, the US weekly asked whether he might be Italy’s Barack Obama. In an interview to the Italian daily Il Foglio, Mr Renzi compared himself to Tony Blair, saying he wanted to transform the Italian left just as Britain’s three-times prime minister did with the Labour party. The media-savvy Mr Blair certainly remembered Mr Renzi’s aspirations when he called on Europe’s leaders to “get fully behind” Italy’s new leader. Read more

Ferdinando Giugliano

Berlusconi at a rally (Getty)

Will he or won’t he? Since a court in Milan on Monday sentenced Silvio Berlusconi to seven years in prison on charges of paying for sex with an underage prostitute and abuse of office, Rome-watchers have wondered whether this ruling will have consequences for the Italian government led by Enrico Letta. Mr Berlusconi’s People of Liberty is one of the three parties backing the cabinet, alongside the centre-left Democrats and the centrist formation, Civic Choice.

Mr Letta and Mr Berlusconi met on Tuesday to discuss the road ahead for the coalition. Top of the agenda was the government’s economic policy and, in particular, how to spare Italians of a rise in VAT, which is planned for July 1st but which Mr Berlusconi wanted to avoid at all cost. It is hard to imagine, however, that in their three-hour long meeting, Mr Letta and his predecessor did not discuss the consequences of the ruling in Milan.

 Read more

Ferdinando Giugliano

Fabrizio Saccomanni

It takes a little more than 15 minutes to cover the mile-long distance that separates the Bank of Italy from the ministry of the economy and finance in central Rome. But the upper echelons of the two institutions dominating the commanding heights of Italy’s economy have traditionally been closely linked by a revolving door. Read more

Ferdinando Giugliano

Beppe Grillo on the campaign trail

Two months ago Beppe Grillo came out as the big winner of Italy’s general elections. His Five Star Movement, which was created only in 2009, came within a whisker of becoming Italy’s single largest political force. His vote tally in the Lower House was an extraordinary 8.7m, more than Silvio Berlusconi’s People of Liberty party and only a few hundred thousand votes less than the centre-left Democratic Party. Read more

Ferdinando Giugliano

An elderly man plays his accordion at the old town market in Warsaw, Poland, on June 24, 2012 (CHRISTOF STACHE/AFP/GettyImages)

(Photo by Christof Stache/AFP/Getty)

The former Italian prime minister Giuliano Amato once compared the powers of Italy’s president to an accordion. Just as the box-shaped musical instrument can expand and contract, the same is true for the influence of Italy’s head of state: what the president can or cannot do largely depends on the strength of the political parties.

On Thursday, Italy’s 949 MPs and 58 representatives from the 20 regions will convene to elect the successor to President Giorgio Napolitano. Amato himself is a candidate, alongside former prime minister Romano Prodi, former European commissioner Emma Bonino, and others.

The political stalemate following February’s inconclusive election means that the new president will have to be picked on the basis of a last-minute deal between the centre-left, (the largest alliance in Parliament) and at least one of the other three significant forces – the centre-right coalition of the People of Liberty and the Northern League, Beppe Grillo’s Five Star Movement and Mario Monti’s Civic Choice. There are no clear favourites for the job. Yet, this election will matter a great deal for Italy and for those who are interested in a solution to its political crisis.

For decades, the President’s job was seen as largely ceremonial. True, the President is the head of the judiciary and of the armed forces. But he doesn’t have anything like the kind of executive powers held by the French or American presidents (though he can veto any law if he believes it is against the constitution). Read more

Ferdinando Giugliano

The Italian dog that did not bark is one of the great untold market stories of the past month. The yield on Rome’s 10-year bonds is around 4.3 per cent, a level not seen since the end of January.

Chart: Italy’s 10-year bond yield (black line) over the past five years; blue line shows the yield on the German 10-year bund

chart courtesy of Reuters

(Chart courtesy Reuters)

The spread with the Bund, which has obsessed Italians since the market panic at the end of 2011, has narrowed to just above 300 basis points. It almost looks as if February’s inconclusive election and the accompanying political uncertainty do not matter. This is puzzling, so here are a few tentative explanations:

1) Mario Draghi’s magic. The pledge by the president of the European Central Bank last summer to do “whatever it takes” to save the euro is the single most important explanation for the relative quiet on Italy’s bond market. The Outright Monetary Transactions scheme, whereby the ECB will purchase unlimited quantities of debt of countries in difficulty, has so far proven a remarkably resilient firewall. Read more

Ferdinando Giugliano

Situation vacant? Mario Monti (Getty)

There were two big job vacancies in Rome last month. The Catholic Church began looking for a new pope after the shock resignation of Benedict XVI. Meanwhile, Italians went about the business of picking a new head of government who would end Mario Monti’s technocratic interlude.

The Vatican is not exactly known for its speedy decision-making. Yet it only took the conclave of cardinals a couple of days to elect Jorge Mario Bergoglio as the new head of the church. Pope Francis – as he is now – is already making headlines with his new message centred on the need for a humbler and more austere church.

On the other side of the Tiber, Italian politicians are still struggling to choose a new prime minister. Today and tomorrow, President Giorgio Napolitano is meeting party leaders and other institutional figures to talk about what to do next. But Italy-watchers do not expect white smoke to come out of the presidential palace any time soon.

Last month’s inconclusive elections have produced a three-way deadlock in the Senate between Pier Luigi Bersani’s centre-left coalition, Silvio Berlusconi’s centre-right alliance, and Beppe Grillo’s Five Star Movement. The only solution to the impasse is a government that is backed by at least two of these forces. But this trilemma has no easy solution. Read more

Ferdinando Giugliano

When Cardinal Jorge Mario Bergoglio decided he would be called Francis in his new life as Pope, he knew people would understand that his choice was charged with symbolism.

As some of the cardinals present at the conclave have confirmed, the new pontiff’s choice is in honour of St Francis of Assisi, who lived and preached in Italy between the end of the 12th and beginning of the 13th century. Francis was the son of a wealthy merchant who abandoned his well-off lifestyle to live in poverty. The monastic order he set up, the “Lesser Friars” (who became known as Franciscans after his death), has absolute poverty as a rule. This applies both individually and to the monastic communities.

St Francis is one of the most venerated figures in the Catholic world thanks to his mysticism and rectitude. Yet no pope had ever dared to pick his name. This is in sharp contrast to the number of times Gregory (16), Leo (13) and Pius (12) have been chosen. Read more

Ferdinando Giugliano

(Getty Images)

(Getty Images)

I have just spent a few days traveling across Veneto, Italy’s industrial heartland in the north east of the peninsula. One of the tasks I had set myself for this trip was to understand whether Italy’s economic crisis is fuelling euroscepticism.

Italy has traditionally been among the continent’s most europhilic countries. To the astonishment of outside observers – particularly those from the Anglo-Saxon world – Italians have seemed relatively at ease with the idea of handing more and more powers over to Brussels.

One of the reasons behind this attitude is their deep lack of trust in their own political class. The euro is seen as a bridge to modernity and progress, rather than a drag on national sovereignty.

After the wave of austerity which has recently hit Italy, and which Brussels was at least partially responsible for, I expected this attitude to have become somewhat less positive. Veneto was an excellent testing ground for its resilience. This wealthy region is governed by Luca Zaia, from the Northern League, the most eurosceptic among Italy’s mainstream parties. Veneto has a strong export-oriented manufacturing sector, which can no longer rely on competitive devaluations as it did in the 1980s and 1990s, before Italy entered the euro.

This point was made to me by Roberto Brazzale, a food entrepreneur from the province of the city of Vicenza, who has off-shored much of his production of parmesan cheese and mozzarella to the Czech Republic. “We must exit the euro,” Mr Brazzale said. “And do it before our industrial base is completely wiped out”. Read more